Dreaming a Home Let’s make it a reality…
15 key checks before you get your dreams into reality
Buying a builder flat- no more a hassle
Buying a house will always make u stop at one big word BUDGET. But all you need to work on is your expenses of your earnings.
Keeping in mind of the budget will help you be more focus for the funds & in making a right decision with a right move.
If you have a firm idea of the type of house you want to buy it is easier to make the savings & other purchases.
Knowing the cost that is involved in buying a house is also a significant factor.
Among them are registration fees, stamp duty, processing fees.
External factors are also plays a vital role in your decision. Whether the savings you already have are ready to be a helping hand at the time of your purchase of your house.
All these are crucial aspects to keep in mind once you are fully prepared to buy a house.
2. Location & Surroundings:
A primary part of selecting a house also lies underneath a location & surroundings you are moving in.
Purchasing for self or for investment, it is equally a major part. Considering the few bullet points such as
- The city nearby (the existing place/ the society is near to a rural area or connect to urban area )
- The school
- Commutation to your workplace.
- Safety during days & at nights.
- Proximity to friends & family.
- Hospitals /leisure areas/conveyance.
The part we are living makes a prominent remark on our lifestyle. Carefully choosing the place which is adjacent to the locality creates a positive approach to buy a house.
The primary & secondary education of the children. The distance to your workplace (The less time to travel a boon to you & family).Also when we are far away from the family all we have is the friends & relative to spend the time with.so make sure you have made a right decision.
Safety-when living in the society all you need to ensure that there is proper security, personnel, alarms, fire fighters etc.
The basic requirements like hospital & conveyance facility, connectivity to Metro all sum up in to a great deal.
3. Builder’s Reputation:
A must fact to know before buying a house is to have a brief of; how the builder is performing. Though one can get the relative figure from the blogs, news, reports, relative who have purchased the property etc. talking to the customer who bought the units in any of his projects & also local broker. But it is also advisable to one to always go for a proper research work.
A reputed builder usually is a member of (CREDAI) Real Estate Developers Association of India. There are many self-regulatory bodies that have strict norms for the builder in any deviation may lead to company being blacklisted.
This not only helps oneself to understand but to take a wise decision.
It is also a safer to buy from experienced builder with a good track record.
An ISO 9001:2008 audited & certified builder is expected to be more professional in their approach.
Also get hold of if the company’s balances are too much & unable to pay the previous debts.
A fair picture of the builder & its company should always be a ready reference to the buyer.
4. Carpet Area:
Term is defined as the area which is enclosed within the walls & does not include the thickness of the inner walls.
In a lay man term the area where you can lay your carpet. Carpet area excludes the wall thickness utility area, shaft area.
Broadly to understand the three terms of this segment i.e.
- Carpet Area
- Built up Area
- Super built up Area
A flat typically consisting of bedrooms, living room, hall, kitchen, balcony utility area, bathrooms, shafts are termed into BUILT UP AREA.
The total area covered by an apartment including playground swimming pool, parking, club house etc. is SUPER BUILT AREA.
5. Legal & Technical Checks:
We all plan to buy our dream home. While the cost of the property and the means to fund it are important, it is equally critical that you don’t end up becoming the victim of a fraud. Hence, it is essential to know which documents need to be checked when you buy a property.
A core legal document-Sale Deed. Proof of sale as well as the transfer of ownership from the seller to you. A sale deed should be registered.
Approval plan of your building
A property owner must obtain an approval plan either from the jurisdictional commissioner or any other officer authorized by the commissioner. To obtain a building approval plan, one has to submit the following documents. These include:
City/panchayat survey sketch
Latest tax receipts
Earlier sanctioned plans
Drawings of the property
As a large part of the land in India is still farmland. This is why revenue authorities issue a conversion certificate, stating the change in land use from agricultural to housing. A no-objection certificate should be obtained from the tehsildar’s office for this conversion.
Take a detailed look at all the receipts to ensure that taxes have been paid until the date of sale. Ask for the latest original receipts in order to establish the credentials of the owner. If your seller does not have the tax receipts, you can contact the municipal body by using survey number of the property in order to confirm the ownership. Other regular bills such as water and electricity bills should also be checked.
A completion certificate by municipal authorities states that a building is in compliance with the rules and is built according to approved plans.
To ensure that the building is meeting all the required norms, an inspection will be performed by the authorities when the developer applies for this certificate. In a nutshell, the certificate certifies that the project is ready for occupancy.
Technical evaluation is also mandate before checking out a property.
Banks providing home loan also performs certain steps for evaluation:
1) Technical Evaluation team would come and check.
2) If it is a property is under construction:
a) Verify the Location of the property.
b) Verify the size of the plot.
c) Verify the stage of construction.
d) Quality of construction.
e) Progress of construction.
* Banker would take the photo of the property to document the status of the construction.
3) In case if the property is ready to move in or is being resale property.
a) Verify the ownership of the property.
b) Verify the maintenance of the property.
c) Verify the age of property.
d) Quality of construction.
e) Verify the Location of the property.
f) Banker would take the photo of the property to document the status of the property.
Quick tips for legal and technical verification
No lender will ask you for legal and technical verification fees separately, because the cost of these processes is included in the processing fee.
Read the home loan agreement carefully to know more about these valuation charges.
Experts of their respective fields conduct these verifications. You will be able to be sure if the property is legally and technically sound.
The sole purpose of all this exercise is to ensure that the property has a clear title, is technically sound and meets the valuation standards of the bank.
6. Financing Banks/home loans provider:
Money from the bank to another party with the agreement that the money will be repaid is considered into financing banks.
Nearly all banks loan are made at the interest i.e. the borrowers pay a certain percentage of the principal amount to the lender.
Now days all the banks are providing home loans for making your dream of buying a home easy.
One must understand the roots of home loan to avail such facilities. Moreover it is equally important to know before applying for the loan that the builder/ property are approved with the banks you are opting for the home loan.
Eligibility-Determining your total eligibility, which will mainly depend on your repaying capacity. Your repayment capacity is based on your monthly disposable/surplus income.
The bank has to make sure that you’re able to repay the loan on time. The higher the monthly disposable income, the higher will be the loan amount you will be eligible for. Bank assures that about 50% of your monthly/surplus income is available for repayment. The tenure and interest rate will also determine the loan amount.
Amount to be borrowed: Generally provides 80-90% of the property value to the applier & 10% of the amount need to pay by the buyer. One should try to arrange the maximum of down payment amount and less of home loan so that the interest cost is kept at minimal.
Co-applicant-Also helps in getting the loan at easier way since the duos can help in getting the required amount of loan if a single member cannot meet the required eligibility for loan. Immediate member can be your co applicant.
Document for loan approval: Banks usually provides a checklist of the document required for home loan. Bank will ask you to submit your identity and residence proofs, latest salary slip (authenticated by the employer and self-attested by you) and Form 16 or income-tax return (for businessmen/self-employed) and the last 6 months bank statements/balance sheet, as applicable.
Disbursement of loan: The bank will give you a sanction letter stating the loan amount, tenure and the interest rate, among other terms of the home loan. When the loan is actually handed over to you, it amounts to disbursement of the loan. Once the bank is through conducting technical, legal and valuation exercises.
Interest rate options– Home loan rates can be either fixed or flexible. In the former, the interest rate is fixed for the loan’s entire tenor, while in the latter; the rate does not remain fixed.
The rate of interest varies from banks to banks. Various banks follow different types of segments to allure the customer.
EMI-which includes both principal and interest. Repayment by way of EMI starts from the month following the month in which you take the full disbursement.
One can also avail tax benefit on home loans.
Such points can act as a ready reference for the buyer.
7. Payment Plans:
A plan for paying any outstanding debts is termed under payment plans. Within a payment plan the borrower agrees to pay back a certain amount of money as per agreed norms & condition.
How to choose the right payment plan in real estate.
In order to simplify the burden of the home buyer, developer has opened up many attractive payment plans.
In other words it is a strategically effort made by the builder at the time of the market slowdown & opens up with a new statement to lure the buyers.
Analysis of the different kind of payment plan available in the market.
- Down Payment Plan
This scheme will demand buyer to remit 10 % of the total amount of the apartment as a down payment during the time of the booking.80-85% of the remaining amount shall be paid within 30 days after the date of booking. The remaining amount of 5-10 % shall be paid at the time of the possession, including the registration charges, stamp duty and additional charges. The benefit of DDP is that the buyer has mostly chances to settle the transaction 10-12% lower than the estimated cost of the property.The major drawback of such plan is if in any case, if the construction is delay, the buyer will have to wait patiently even after the full payment.
- Construction Linked Plan
Also termed as CLP.This plan demands to pay 10-12% of the total amount from the purchaser at the time of booking. The rest of the amount will be paid in the installments linked to different stages of construction.
The benefit is that the buyers are comparatively getting more time in accruing the money for their home. The plan is beneficiary for the buyer as they can avoid the worry over any delay in possession. However buyer is bound to pay more interest in CLP when taking in account of the interest part.
One can choose the plan as per his/her convenience.
- Flexi Payment Plan
Is beneficial for mid stage construction properties. In this plan buyers need to pay 10% of booking amount followed by 30-40 % within the next month. The next 50-40 % will be remitted in the similar way of construction linked payment plan, followed by the last 10 % during the time of possession.
This plan gives ample freedom for buyers as they don’t need to suffer more on the stress of allocating money. The shortcoming of this plan is that buyers are not likely to get any discounts as compared to DPP plan.
- Subvention Plan
This plan is relatively a new payment plan where buyer will be financed by bank. Prior to paying 15 to 20 percent as the booking amount, buyers will apply for a home loan. The buyers don’t need to pay the EMI’s till a fixed period of time. In this plan the builder will pay the interest of the loan (not the principle amount).
There are several benefits for this plan:
The plan is ideal for those who live in rental apartments as they have enough time for accruing money.
Basically, the buyer will own the property without paying any EMI’s to a fixed period of time.
Banks will release bank loans at reasonable rates. Since associated with a bank, customers can also feel secured.
Builders will fasten the project to escape from more payments as interest to bank which also benefits the buyers. Banks also benefit as they get a pool of clients within a single project as their customers However, the disadvantage is that if the builder breaks the payment of interest, the credit score of Credit Information Bureau India Limited (CIBIL) of home buyers will affect.
Vaastu Shastra or can be named as “science of architecture”. In present, construction of a site, designing is made keeping in mind with the right amount of energy is preserved in home to usher in peace, prosperity & success for all the human beings residing in the house.
Vaastu is not only restricted to layout, construction but also suggest you for the colors & internal settings. This is now very much accessible with the help of the builder. (Ranging from different parameters).
Few tips on this can help you live a better life with your loved ones.
- Entrance of the house
- Kitchen Location
- No overhead beams
- The bedding arrangement
- Colors of right energy
A small but appropriate entrance can really bring good vibes & energy in the house depending on the sunrise & sunset. Also if you cannot meet up the right direction of the entrance all you have to
Do is placing a window/open space in right direction to allow positive energy to enter for better results.
Kitchen plays a vital role. Avoid planning your kitchen in front of the main entrance. Kitchen can ideally be in the southeast corner & the cook facing the east.
It is every time suggested by our elders to avoid overhead beams; exposed ceiling beams can cause depression, arguments etc.
Placing the bed at the southwest corner provides a peaceful sleep. So place your bed to the south, east, or west corner avoiding to the north.
Colors have always added a spark to the life .Choose colors which makes you feel comfortable.
Usually blue, yellows, green, white are recommended by vaastu experts.
9. Society Amenities:
Building up a society also goes hand in hand with amenities a builder is providing to the residential.
Features like location, park, pool side way view; highway view enhances the real estate infrastructure.
An average buyer always looks for open spaces for fresh feel along with just a house or a unit to live in.
For kids can use play areas, elders can go for walk in the skirts of the society.
Also where the youngsters can enjoy swimming pool, gymnasium in their leisure time.
A developer can number of amenities in the society
Few are listed down:
- Kids play area
- Swimming Pool
- Club house
- Parking Availability
As cities are getting more dense & congested, it is mandate by Developer to provide all the basic amenities not only to the buyer but also to make a distinguish mark in the growing market.
10. Terms & Conditions of Builder Buyer Agreement:
A legal contract between buyer & Builder is very significant role to be played.
The builder buyer agreement is a document which contains all the terms & condition which is implied by both the builder & buyer.
At the time of processing of buying & negotiating, a buyer should be aware of all the clauses which are meant to protect his/her rights and also clauses which safeguard the developer.
A right agreement is beneficial for both the builder & buyer before signing the documents.
Some important points can be viewed below:
- The time frame of the project completion.
- The payment plans & terms.
- Interests, penalty, default charges for the buyer
- Approvals obtained by the developer to undertake the development.
- Approved layout & plans of the project
- The land is free from all the loans/mortgages on which the developer is constructing.
- Clauses on refund of payment in case the development fails or not completed.
There are many more clauses in the buyer seller agreement. Make sure to read all the between lines. A buyer holds all the rights to have a copy of all the agreements against the property consisting of all the legal documents, sanctions obtained.
Also it is advisable to take legal opinion if the buyer is unable to understand the agreement
11. Construction Technology:
Buying a property is correlated to the construction a developer is acquiring.
It is essential to know the material the builder is applying at the time of the construction to avoid any future damages to the building. Ensuring what the developer is committing to the buyer at the time of purchase. Visiting the site is more helpful to understand the quality of construction.
A real estate stakeholder is increasingly emphasizing on the new technology techniques.
Mivan technology (Mivan Shuttering) is the fast paced construction technique which offers strength & durability to the building.
All real estate stakeholders are increasingly emphasizing on the use of new and innovative construction techniques.
So one can know what is the technique & technologies the developer is implementing for the construction.
12. Approvals from respective Development Authority:
While deciding to buy a property a basic check can also be done by the buyer to check ownership / status of land.
Certain clearance is required to take for the construction of any building that includes:
Land Clearance– land is sometimes converted into Non – Agricultural land which can further be used for constructing building for residential or commercial purpose. In such cases a developer needs to get approval from concerned authority to convert agricultural land to non-agricultural (NA) purpose.
Zonal Clearance– Builder is required to take zoning approval from the local body / authority. The revenue department provides the ownership certificate for building permit under the provisions of Local Body Acts.
Building Approval– Building plans are a graphical representation of what a building will look like after construction. Building plan ensures that building complies with building laws. Once the building plan is approved, the builder should commence construction work within two years and there should be no deviation from the sanctioned plan.
Layout approval– The builder has to get approval of layout plan from concerned authorities before starting construction of residential building.
Completion Certificate– The completion certificate is issued after the inspection process. Issuing of Completion Certificate will ensure that the builder has constructed the building as per approved plan.
Occupancy Certificate– Lastly, an occupancy Certificate is required from local body/ authority before occupation of a building or part of a building for any purpose. The local body forwards the proposals to the various other concerned authorities in the city as NOC before granting Completion-cum-Occupancy Certificate.
For any building to get constructed, the builder will need to have a set of approvals as well as sanctions from all the authorities concerned. Any building that comes up without these approvals will invite penalty in the form of fines and even prosecution.
12. Rera Registration of Builder & Real Estate Agent:
What is RERA Certificate Registration? Is a certification license issued by the Real Estate Regulatory Authority to the builders & Agent. It is mandatory for the entire commercial & residential real estate project where the project is above 500sq.mt.
The Registration assures to address on the issues like quality of construction, delays & other changes.
Advantages of RERA Certification.
Transparency in projects
Standardization in the project quality
Accountability of Builder, Agents & Broker
Increases confidence among consumers
Timely delivery of project
Consumer Forums for grievances
A real estate agent will be given a registration number by the authority which will be valid for 5 years. Every promoter & agent selling property in different states has to get there projects registered to that state, failing in so will be liable to charges.
A possession letter is a document issued by the developer in the favor of the buyer stating the date of the possession of the property issued after the developer gets the completion certificate from designated authority. Possession of the apartment usually happens after the month, making the final payments. (Although the possession does not always imply ownership)
The possession letter does not make the buyer the legal owner of the property.
14. Additional Costs:
A decision of buying a house is one of the most important one as it not only involve money but has many emotions attached. At first go the house seems to be affordable to your pocket but after you realizes that there are many hidden costs involved.
There are some other costs such as Registration cost, stamp duty, service tax, property tax etc. that go unaccounted in the calculations & finally gets added in the costs which is reflected in the final payment schedule. The costs vary from builder to builder & facilities that your house is equipped with.
Additional hidden costs are as:
Parking space– The Large residential buildings usually charges additional charges to the buyer under the head of the parking space allotment. This type of costs adds near about 2 to 5 lakhs depending on the type of property.
Registration Cost– Is based on the actual worth of the property. About 5% to 7% of the cost of the property forms the stamp duty. Apart from these you will also bear the miscellaneous expenses like lawyer fees & notary who gets your work done.
Deposit of Maintenance-Many builder takes the maintenance deposit that may range for a period of 1 to 10 years. This is again an add-on to your expense sheet.
Preferential Location Charges (PLC)-These charges are clamped by the builder for the choice of your floor which you want to purchase. The developer generally charges you for providing you the preferential location.
Cost of Interiors-This head also adds substantial amount to the expense sheet. Approximately 1% -1.5% may be dedicated to this slot.
Loss of Tax rebate, interest & Rental-The delay in the project add worries to you. They not only add additional expenses in the form of extra interest but lead to price escalations. Till the time the property is not handed over to you also lose on the tax rebate that is applicable on home loans.
15. Your Real Estate Agent:
A real estate agent is a person whose business is to arrange all the selling & renting of the houses, land, offices, or buildings for their owners.
A real estate agent find properties, negotiate the deal & handle paperwork. They also help seller ready the home for sale determine the sales prices, & work on the best deal.
Finding the property
Market the property
Providing the important information
Making the best deal