Buying a home in 8 steps

Buying a home in 8 steps

What are all the hoops you need to go through before purchasing a home? Sudeep Anandapuram & Debashish Hota acquaint you a little with the process

Buying a home in 8 steps

Property buying is widely considered one of the safest investment options available today in India. India being a developing economy, real estate will only increase in value terms as the country prospers. People indulge in home buying for a variety of reasons. The most common reason will be to own a home of their own that they can move into along with family, or they could be buying it for investment purposes; while others purchase it so that they can earn from it etc. Whatever the reasons, home buying is a reality in every individual’s life at some stage or another.

However, the downside is that it is not such an easy decision to make, considering it is a highly competitive sector that is also plagued by corruption and other anomalies. Take for instance Mr Sharma who moved into Bengaluru from Kolkata after divesting all his property there to begin his life in a new city. He did his own research through some friends and references, shortlisted and finally brought a property at JP Nagar near Sarakki lake. Much to his horror, after moving in, he gets a notice from the civic administration that his property encroaches a stormwater drain. While he did all due diligence in checking the validity of the builder and the quality of the building, he had overlooked the legal sanction of the property itself.

This is just one of the many examples of the challenges faced by home buyers who are not aware of the several loopholes in this segment. Listed below is a comprehensive checklist to factor in, prior to purchasing a property that is new or old and can help you avoid traumatic situations:`

Buying an apartment or a house is, from the investment perspective, the biggest decision people usually take (well, some lucky few make a business out of buying property, but we are not talking about them here). Given that a decent house sets you back by somewhere in the range of a crore, we would urge that you look up all possible property portals, consult most of your friends and visit multiple locations when you are in the frame of mind for buying. Make sure not to miss out small details like distance from schools, markets etc. which can later make life difficult .

Now that you have spent about six months (maybe more) exploring options, narrow down your list to two to three options. You will, of course, reach this shortlist after considering factors like budget, distance from workplace and educational institutions, ‘reputation’ of builder etc. One very important check to be performed is the encroachment check, i.e. if the property is encroaching any stormwater drain or rajakaluves. In case it is within 50 metres of one, avoid the property!

Now that you have checked for encroachment, factored in your budget and distances, you will have decided to pay for that one property. The builder expects you to pay a booking amount so as to ‘block’ the apartment for you. One thing you need to be very careful about — suppose there are issues with the apartment complex later (permissions, legal disputes etc.), you would want to get a confirmation from the builder that he will return the booking amount. A safe thing to do is to take it in writing – you can either ask the builder to sign on this memorandum of understanding (MOU) or send it to him over email and ask him to reply. If the builder refuses to even reply to the email, beware.

Technical evaluation
So, your flat is now booked, and you run to the bank for a loan. That’s all there is. Right? Wrong. While you should run to banks (and shop around for a loan at the lowest possible interest rate), you should also check if the builder is doing things right or if he is flouting any construction norms! Get a civil engineer to visit the property and check if the plans are in line with the approvals. This step is the Occupancy Certificate (OC) eligibility check. If the apartment block cannot get an OC, you are better off abandoning ship immediately. While checking for OC, do get an opinion on the construction quality as well.

Legal verification
With property, a technical verification alone is not insufficient. What you also need to do is check if the paperwork (ownership documents, history of the documents etc.) Once you have paid the booking amount, you can ask the builder to give you documents related to the property. Get these documents verified by a competent lawyer or law firm and ascertain that everything is legally in order.

You might think that if bank also gets documents verified by lawyers, so why you should do this too? Here is the answer – the bank has a different risk profile than you do. If your building is bulldozed tomorrow, the bank will still recover the loan from you. Taking a home loan from a reputed public sector bank is not a guarantee that the property is fine. So, you would need a lawyer who represents your interests.

Sale agreement
Once you get a clear ‘go ahead’ on the technical evaluation and legal verification, you can execute the sale agreement. The sale agreement is effectively an expression of interest – that the buyer agrees to buy and the seller agrees to sell the said property. This is the basis for the sale deed that is executed during registration. This is usually drafted by the builder, but there is every chance that it is one-sided. You should consult a lawyer when drafting the sale agreement.

This is the process of executing and registering the sale deed. The sale deed has to be registered at the sub-registrar’s office; your physical presence will be necessary for this. Usually, the builder will facilitate registration.

Moving in
After all that hard work (and money spent), you are finally ready to move in. Or, are you really? Moving in can be a very tedious process, with a lot of planning on transportation of furniture, electronic goods etc. that are needed. But even before you collect the keys, you need to make sure that the fittings, the electric sockets, the plumbing are exactly the way the builder promised.

Does the flat have a seepage issue? Is the drainage alright? Minor things yes – but you are better off avoiding this after you move in. So, hire a professional home inspector who will do the job for you. You can share the home inspector report with the builder and get him to rectify
whatever is not done correctly.

(Sandeep is co-founder & CEO, Debashish is co-founder & COO, Zippserv)