Get a home, not a house

Buying a dream home can be an arduous journey. Bindu Gopal Rao offers a checklist
to help you choose the right abode, the smart way.

Your home is, arguably, the biggest investment in your financial portfolio. Naturally, it is best to make an informed decision when you buy one and ensure that you avoid the common pitfalls. There are numerous aspects to be kept in mind while investing in your dream home. Read on to know more...

Documents of importance

First and foremost, make sure the builder has all the appropriate legal permissions, documented and recorded. There should be legal titles for common areas like
terraces and lawns. Check every document and not just the property title.

“Documents that need to be scrutinised prior to purchase of the home includes
title of property, encumbrance certificate, revenue records including patta, chitta, adangal, area statements detailing the carpet area, built-up area and amenity
areas. Also, check the planning and building permits, soil and water test reports, structural stability certificate, draft of the agreement for sale and construction agreement and completion certificate,” says T Chitty Babu, CEO, Akshaya Pvt. Ltd.

Always take a second opinion on the builder’s agreement. The draft copy of the this agreement is the one of the key documents that any home buyer needs to study. Ensure that the agreement isn’t one-sided. Usually, the fine print on the ownership of the clubhouse, internal roads, terraces and open spaces as well as formation of the society is always a bit vague.

Make sure that the builder possesses the latest paid tax receipts and keep a copy for yourself. This will protect you against any arrear claims from the authorities at a later date. Deepak Mittal, director, Pushpanjali Realms & Infratech Pvt. Ltd. adds, “Always check the occupation certificate, which is issued by the local municipal body after the builder has provided basic amenities like electricity and water, besides having constructed according to the granted permissions.” It is important to check with the developer on the survey number and details relating to the type of land on which your building is constructed.

Start from the root

Make sure you understand the basics. The difference between super-built-up and carpet area is called loading.

“One needs to be very clear about the actual carpet area as one always pays only for a super-built-up area whose percentage of space varies for every project or even city. For example, if you buy a space of 1300 sq ft, you might end up with only 1120 sq ft of actual living space. If a bedroom is less than 14ft x 12ft, it is advisable to buy an apartment with two rooms as it is more functional than a three-bedroom home with severe space constraints. If you wish to redesign the house, you might want to pay attention to the structural integrity first,” says Sanjeev Sinha, Principal Designer, Renaissance Designs.

Not many customers are aware that the purchase price of the property is not the only cost to be borne. “Hidden costs such as brokerage, stamp duty, legal fees,
inspection fees, mortgage fees should also be taken into account. Ensure that you’ve budgeted for these too, lest they spring up as unpleasant surprises in the future. Do remember, banks give loan only for the actual cost of the flat, not the overhead expenses ,” advises Raja Mukherjee, head – marketing and sales, Concorde Group.
When investing in a house, do look at your financial limits.

Never exceed beyond your grasp. “One may spend several years wishing they had paid a bit extra for a better home. If someone can’t find a home that suits them, they should consider a cheaper area. People look at the top-end of their affordable monthly payment, and they don’t really think about what happens if their income goes down or they have to change jobs,” warns Gaurav Yadav, director & founder at Uday Homz.

Do not avoid due diligence, vis-à-vis legal and technical aspects. “Please
engage a local lawyer to certify the title of the seller and a local architect to certify on the approvals. It is not advisable to buy a flat, which is not covered under the commencement certificate,” says Dhiraj Jain, partner, SNG & Partners, Advocates & Solicitors.

Vaastu is an important consideration for many and while your home may not be 100 per cent compliant, you can get the basics right. It is advisable to choose a house, which has two sides open with a lift for better cross-ventilation and sunlight. Khushdeep Bansal, founder, MahaVastu Corporation Limited, advises, “Look for a powerful entrance location. The location of rooms in different directions decides the outcome of your efforts. Also, analyse the presence of five elements (panch tattvas) – water, air, fire, earth and space.”

Intense research

The best thing to do would be to do a thorough study of the background of the builder through their website for information on projects completed and range of projects coming up. “Ratings are an indicator of the efficiency of a builder. ISO standards, CRISIL Ratings and even customer testimonials can help you make your decision. If it is a relatively new  builder, check specifications carefully,” says Sanjay Agarwal, GM, sales and marketing, Salarpuria Sattva Group.

“Thorough research may be a very time-consuming process, but the final outcome is a house that actually meets all the requirements and criteria. It would help the buyer if he consulted a real estate professional who will not only help him make a purchase with the least amount of problems, but also ensure that the buyer gets the right price and additional services like negotiation,” says Sahil Kapoor, executive director, RE/MAX, India.

Choosing the right builder with decent  repute is of paramount importance.
Concurs M Murali, MD, Shriram Properties, “Go to a developer with proven record of performance. Choosing a branded developer may help avoid various hassles.” Suresh Hari, secretary, CREDAI, Bengaluru, adds, “Sometimes, the buyer falls for attractive offers, including some tall deliverables due to ignorance. Unverified claims can lead to a disaster. The industry has players who operate in the unregulated space. Such players need to be verified thoroughly.”

Snehal Mantri, director, marketing & HR, Mantri Developers Pvt. Ltd. explains, “Prospective buyers get lured by the base rate and do not take into consideration the finer details of costing like service tax, VAT, floor rise, premium location charges, car parking cost and so on. They should read the price list very carefully and look out for progress-based payment, instead of monthly or bi-monthly payments, which are not linked to progress of construction.”

Weighing options

Anil Rego, CEO & founder, Right Horizons opines, “Owning a house would be a better option rather than renting one, although it isn’t cheap. Many home buyers do not analyse what would be the impact of EMI on their monthly cash flows. In case of higher EMIs, the net savings (post consideration of tax benefit) could be even negative or negligible, which leaves a family vulnerable to financial shocks in case of uncertainty.”

Some of the important aspects to keep in mind while planning to buy a house
include sorting out the budgetary constraints, finalising the property based on affordability, preferences and location. “One should consult an experienced buyer before finalising on any property. Also, take help of a reputed agent and lawyer while closing in on the deal. Ensure proper property inspection to avoid loss of value later. With this checklist, a buyer can gain a winning edge in property dealings,” maintains Aman Singh Gehlot, director, Ambience Group.

“The seller may make statements that only entice buyers. An example could be that the property would rent for a certain amount. If the statement is important, then check it out. Get an independent opinion to see if the statement is reasonable,” cautions Vinay Jain, CMD, AVJ Group.

Every aspiring home buyer has the privilege of negotiating the cost with their developer. However, before such negotiations, it is imperative to evaluate your actual purchasing power and demonstrate it. Says Pradeep Misra, CMD, REPL, “Get a pre-approved mortgage. Not only will this prove that you’re serious about buying a house, but it will also give you an idea of your upper limit.”

“Make sure you consider the entire current income and expenditure when you sit down to negotiate. There are two essentials for success at the negotiation table – down-payment and pre-qualification for a home loan.

These two factors combine to give the developer sufficient reason to take the buyer seriously, and offer a better deal. Without these, one could be construed as just another ‘window shopper’,” says Deo Shankar Tripathi, president & COO, DHFL. To save oneself from getting into pitfalls, always keep three P’s of property purchase in mind – position, price and potential.