In the 1970s, the typical home buyer was someone in their late 50s, who invested in a house post retirement. However, today economic growth across the country, easy availability of finance coupled with high disposable income has made many young Indians consider investing in real estate at an early age.
Recent studies have indicated that the average age of home buyers in India is now between 35 and 38 years. They are also a greater number of people in their late 20’s looking for homes for themselves.
While the profile and age of the first time homeowner is changing, what is not changing is the hesitancy and anxiety that comes with making much a major financial decision. Investing in your first home needs a lot of caution and due diligence. We bring you the following first time homebuyer tips, which will guide you as you finalize one of the most crucial investments to be made.
Before you invest in an apartment, determine your budget by taking stock of your current financial obligations such as personal loans, life insurance or any other commitments to get an essence of your true monthly income. This will allow you to define your true financial status and the budget for your home.
Once you have your true income, it is prudent to get your credit score checked to determine your eligibility and the amount of the home loan that you qualify for. If a home loan applicant has a good credit score, s/he is considered creditworthy and this betters the chances of the loan being approved at a lower interest rate.
Among other helpful tips for buying a home for the first time, is to hire a financial advisor who will guide you as you make this crucial investment. While a financial planner may cost a bit, a good financial planner will save your money in the long run.
Some buyers look for a home for their family, while others look for capital appreciation through a long term investment. Some buyers look to move closer to their workplace or school while some buyers look for lifestyle amenities. While investing, the goal set should be clear in the mind of the buyer, ensuring that an informed choice is made.
Location is another key factor to consider before making an investment. An essential tip for a first time home buyer is to check features like connectivity to hospitals, business areas, proximity to educational institutions, and malls in mind.
For buyers looking to invest in apartments in Bangalore, Devanahalli has emerged as a top choice of residential destination. From commercial establishments, upcoming infrastructure projects with top in class under-construction residential projects in Bangalore, Devanahalli is one of the most promising locations in the city.
Ozone Urbana is the largest and the first integrated township in the Devanahalli neighborhood of Bangalore. Spread over 158 acres, this picturesque township is located right next to the BIAL flyover on NH7 and offers a fabulous living environment. Complete with a social infrastructure such as a CBSE school (NPS), a 250 bed state-of-the-art BR Life hospital, a Star hotel, offices, restaurants, a 1 million sq ft retail village and homes for the senior living community, Ozone Urbana is undeniably Bangalore’s largest integrated township.
For more details about the project click here: http://bit.ly/2ou2Du4.
It is also important to be aware of future planned infrastructure developments in the area that could have a positive or damaging effect on the future value of the property. For instance a planned metro station in the locality will help boost property prices in the future.
A preapproved home loan means that the bank has carried out their due diligence checks on the buyer’s credit report and made a virtual confirmation of the loan and loan amount. It is advisable to begin the house-hunting process after the pre-approval as this step is pivotal to determining your budget.
You can either hire the services of a home broker or scour various realty portals for listings of apartments for sale. A helpful first time homebuyer tip is to visit Facebook groups such as ‘Flats without brokers’ to look for homes. Also spread the word among your friends and family as you never know where a lead on a home might come from.
Another essential first time homebuyer tip is to do a property visit or site tour and check out as many houses as possible instead of simply relying on online photographs.
If you are not able to find a house within your budget, you can consider investing in plotted developments and build a house with your specifications.
Once you have shortlisted your properties, the next step is to check the credibility of the builder. This essentially means checking on the developer’s past projects, quality of construction, and number of future projects that are being undertaken. It is also an added advantage if the developer is affiliated with a governing body such as the CREDAI.
One must also check all the sanctions, plans and approvals to ensure that the builder has completed regulatory obligations before investing in a property. Any deficiency on this front can not only cause hassles for the owner but can also lead to serious legal consequences.
Even if the home you plan to purchase appears to be flawless, inspect the property for the quality, safety and functioning of the fixtures and plumbing of your potential new home. Enquire about availability of water 24*7, power back-up, parking availability etc.
If you are someone who follows Vaastu, this is a good time to hire a Vaastu or Feng Shui expert for examining and offering advice on the house.
If your home passes all of the above considerations, then it’s time to go ahead and make your offer to the seller.
Do not hesitate to negotiate better rates with the seller. If you are investing in an under construction apartment, the builders often offer promotional discounts during festive seasons or if their sales are slow. Also enquire about special pre-launch and launch prices.
During the purchase of a flat ensure that there is no uncertainty about the carpet area and super built up area. When you are investing, it is important to ensure that you are paying for the carpet area but not for the super built up area. The super built up area sometimes has a loading of nearly 30-40%.
Researching before opting for a home loan will not only give you great market insight but it will guide you to selecting an option that is most suited to your need. When shortlisting banks for your home loan, it is also advisable to check the prepayment penalty and foreclosure charges.
Today, banks also offer home loan insurance as a bundled product along with your home loan. This home loan insurance protects the family of the investor from any loan liabilities in case of their unfortunate demise within the home loan term.
A common predicament for the first time home investor is choosing between a fixed rate of interest and a floating rate of interest. Opting for fixed rate interest where the interest remains constant during the entire loan tenure guarantees peace of mind. However, an investor may opt to take a risk by going for floating interest rates, where interest rate fluctuates.
For a new property it is also advisable for a home buyer to understand the various payment plans offered by developers. Some of the popular plans offered by builders include a construction-linked payment plan and 20:80 subvention plan.
First time home buyers must be aware of the tax benefits that they can claim from their home loan.
Ensure that you have finances kept aside for a down payment on your dream home. It is at this stage that many buyers opt for a personal loan.
It is essential to have a healthy savings account that can be utilized for additional incidentals such as stamp duty, registration, car parking, club house charges and other miscellaneous charges by the builder. An important piece of advice from financial experts is to set aside a few months EMI’s as a reserve fund to be used in unforeseen circumstances.
First time home buyers often fail to take into consideration the maintenance charges that will be applicable on the property in the future, as it could amount to a substantial sum. Keeping this in mind helps plan your finances better.
Once you have made the down payment, ensure that you get an allotment letter. This is a document by the builder to the buyer when a property is booked and contacts facts and figures of the property such as flat number, area, payment options and other charges applied for maintenance, added amenities etc.
Making regular site visits to your property when it is under construction is important so that you can check on the status of construction, quality of materials etc.
If you want to make minor non-structural changes such as layout of kitchen, tiling, plumbing fixtures, then you can get this done during the construction stage.
This is also a good time to hire an interior designer to help you design and get the maximum usage of your home in terms of storage and optimum space usage.
The sale deed is one of the most important legal documents confirming the purchase of the house. In essence, the purchase of property is not legally complete until a sale deed is signed between the buyer and the seller. This sale deed can be signed only after both the parties are satisfied with the terms and conditions of the agreement.
There are a number of important legal documents without which the sale of a property is not considered complete. Some of these legal documents include share certificates, sale agreements, society documents, sanction plans, encumbrance certificates, etc.
The newly passed Real Estate Regulatory Authority (RERA) bill makes a provision for penalizing developers in case of delays in the project delivery.
Parking spaces are common spaces which belong to the apartment complex association. The allotment of the same is at their discretion and is mostly done on a first come – first serve basis. Hence it is prudent to book your parking spot at the earliest.
One of the final steps that will complete the purchasing process is the possession.
Possession is the physical transfer of the property, but is not sufficient to establish legal transfer of ownership.
To close the sale you need to get the property registered in your name with the local authority.
At the time of registration, you will also have to pay a stamp duty, which is a government tax levied on property transactions.
When the construction is complete, the developer receives an Occupancy Certificate (O.C) by the local regulatory body that confirms the handover of the property to the buyers.
The Residents’ Welfare Associations (RWAs) are formed within three months from the date of receiving an Occupancy Certificate. They function as a body of authority that can demand a timely possession of the property.
It is important to elect a governing body to look after the general cleaning, security, electricity charges for the common areas, property tax and other running costs of an apartment complex.
As new owners, this step is the only remaining one: Where you finally settle into your new homes, throw a few housewarming parties, complete your new home rituals and enjoy your new home to the fullest.
The Ozone Group is one of India’s fastest growing property developers with a range of properties across Bangalore, Chennai, Goa and Mumbai.
The Group is a professionally managed organisation and is well supported by more than 300 people comprising design, architecture, finance, engineering, legal, commercial, strategy, PR and corporate communication, sales & marketing and CRM & facility management departments. To know more about the Ozone Group click here: https://www.ozonegroup.com/overview.php