Enormity of decision
Buying a house is a huge decision and you might need to run around a lot searching for the perfect house. Normally, a person might see at least 30-50 houses before they decide on a suitable one for them. This is not because they are fussy but because they realize the enormity of this purchase and the huge impact it would have on their lives not just how but also in the years to come.
My House Buying Journal
I have a notebook wherein I have details of all the houses I have viewed. I have divided the book into two – one for new properties and the other for resale properties.
For each house that I view, I list down all the following details:
Building Name and Location:
Number of floors in the building:
The floor of the chosen flat or the floors available (in case of new properties):
New / Resale:
New, then is it from builder /investor?
Name, location and contact no. of the investor of the concerned house agent:
Square feet – Built up
– carpet area
Rate quoted by investor/ owner/ builder:
Rate that can be expected (according to house agent) (if it differs from above rate):
Other amenities at the building like children play area, swimming pool, gymnasium, etc.:
Expected maintenance rate per sq. ft:
Other expected charges -Stamp Duty
– Registration charges
– Parking charges
– Club house charges
– Advanced Maintenance fee
– Society charges
– Transfer fees (in case of resale)
When will you receive possession in case of a new property?
Lastly – did you like it?
– did you not like anything about it?
– Will you be interested? Why?
– What price would you fix for it to be able to buy it?
Maintaining the house buying journal
You always must carry around your house buying journal when you go searching for houses. It may be a laborious time-consuming process but still go ahead and maintain this journal. In a few weeks or months, when you must make a decision, you can easily flip through these pages to get whatever information you need.
The markets are down, and it is the perfect time to buy a house but are you ready to buy a house?
A serious decision
A house is a long-term asset and it is a serious decision you have to take as till you get over your long-term commitment (i.e. home loan), you cannot sell the house or move out.
Selling a house may seem simpler than buying one but I have heard sellers state that they find it even more troublesome and expensive as there are lots of things like agent fees, transfer fees (The transfer fees to be paid to the Building association is borne 50-50 by the buyer and seller in Mumbai city), packing and moving expenses, etc.
Consider these points and then decide whether you should really buy the house:
- i) Would you be living in the new house for a minimum 3year period?
- ii) Do you have a steady employment and a good credit score required for the down payment?
iii) Do you have the down payment, around 10-20% of your house value?
- iv) Is this the right time to buy your house? You must decide this by seeing the prices at the chosen area.
- v) Would the house and location be suitable even if you get married, have children, etc.?
Once you have seriously considered these points, you can conclude as to whether you should really buy a house.
Whenever you look at a new house, you need to have a checklist to see whether it would be suitable for you. A sample checklist of the points based on which you should analyse your house are listed below:
- i) Proximity to the bus-stop / railway station/ airport.
If you will be using the public transportation to your office every day, then this point is more important. If you will be taking constant business trips, then proximity to the airport may also be something to consider. Even if you are not going to be using the public transport system, you should consider these points as it is these areas that appreciate a lot.
- ii) Proximity to schools and colleges.
Even if you don’t hear any babies’ gurgling sounds now, you may be thinking and longing for that very soon. So, do make sure that your house is near a school. If a college is also in the vicinity, then it is all the better. However, by the time your child enters college, he / she might be able to manage the public transportation alone.
iii) Proximity to Grocery shops, market, etc.
All the necessities like grocery, fruits, vegetables, medicines, etc. should be available at a walking distance from your house.
- iv) Proximity to hospitals
Emergencies can occur at any point of time. So, you should be close to a hospital. This is essential.
- v) A background check of the builder
Check out the background of the builder-
- a) How many years is he in this business?
- b) How many projects has he completed?
- c) Which are the projects and where are they?
Next, visit as many of these projects as you can. If they are residential, meet the secretary of the Building Association and inquire about the credibility of the builder:
- i) How is the quality of construction?
Do they have any leaks/ cracks in the walls? A building should not have any leaks/ cracks for at least 10- 15 years if it has been made carefully with quality raw material. After that period, most buildings do develop problems!
- ii) Did the builder hand over the possession on time, as he had promised?
iii) Did the builder hand over the legal documents, collected funds, etc. to the society/Association without creating any troubles?
- iv) Anything else you need to clarify.
‘Caveat Emptor’-’ Let the buyer be aware’ is a popular business maxim that says it is the buyer who must be alert and aware. This is true in real estate deals too.