Home sweet home!
Should I buy, should I not? Where will I get all the money from? How did my dad manage to buy one? What if I wait and the price goes up? Like it or not, these are some of the many questions that raid our mind every time we see one of those property ads in a newspaper.
Let’s be honest, buying a first home can be a bit, okay more than bit, distressing. Every time you zip past those nice homes, you are overwhelmed with a deep sigh. Wish I was prudent earlier you would say and drive on. Home buying after all is like a dance between you, the developer and yours and their expectations and because there are too many players involved the probability of going out of sync is big.
Having said that, this is indeed a good time to buy a house if you are planning to live in it; but not for an investment. Unless and until you have deep pockets, there is little headroom for appreciation. So, if you are a first-time buyer then take the plunge but with some prudence.
Here are 10 Tips for you:
- Don’t waste time thinking: Procrastinating is bad for property buying. It is true that the EMI percentage of your salary decreases as your pay goes up, so the outflows will be less painful as you go on. But think, your working shelf life is more now, which means any hike during this time or a part time job will be an added advantage. And importantly, there is a considerable difference in property prices even if it’s just 6 months!
- Go for the affordable: Don’t over-stretch your budget. Look for a property for which you can arrange the down payment, typically 15 per cent of the cost of the property. Figure out an EMI you can afford. It shouldn’t exceed 40 per cent of your take-home pay. Settle for the lower of the two property price figures arrived at by the down payment and EMI approaches. Remember to factor in costs such as stamp duty and brokerage.
- Take advantage as an early bird: Many builders offer better prices for early birds. It is a good idea to invest in an upcoming project as of course the builder might be keen to get some initial buyers at attractive offers.
- Check for builder’s reliability: Having said the above point, while investing in a prelaunch property, it is important to check the builder’s reliability. There are many people around you who got struck with their money gone and paying high Pre-EMI interest for delayed projects.
- Stay away from middle men: They are smart to push sales for their benefit. Even if the property has some minuses, there can cover it up smartly by exaggerating the pluses. So it is good to do the research your own. Speak to the owner directly, talk to the neighbours and hear their opinion about the project and the location concerns like availability of water, waste management etc.
- Go to the bank first: It is a good idea to consult a banker first to know your loan eligibility in advance. It helps in zeroing down a property within your loan eligibility and thereby helps avoiding the frantic run later when you like a property and money is a problem. Banks will also have a list of approved projects in different locations.
- Avoid multiple loans: Many people depend on personal loans to raise money for down payment. But this will only going to increase your financial burden later when you start repayment. If you are in short of money for down payment, try out other options like borrowing from family, selling gold, disposing other properties ( if having ) etc.
- Narrow down your search: Options are vast today. If you are planning to visit a builder expo and collect as many brochures to compare, I will tell that it’s a pure waste of time. Narrow down your searches based on proximity to office, office of your partner, kids’ school, etc. Now you have narrowed your search to few key locations. Again shortlist options based on price range. Now you are left with a quite few numbers, which will make your search easy
- Don’t run behind offers: Book today and a car free…book now and get a tablet….Builders may lure with many options. But go for only sensible options. You already have 2 cars then getting a car free is not going to be a good offer for you. If they are offering free parking, grab the opportunity!
- Consult a lawyer before you pay advance: Ensure that the documents are free of any encumbrances and legal entanglements including permits before you pay advance. Many buyers end up falling in traps without checking property documents with the help of an expert.