Aspects to consider while buying your first home / buying a new house

A new house spells new beginnings. This would be one of your biggest financial decisions till now and it would have an impact for a long time to come. Therefore, it is important to consider this decision carefully before embarking on purchasing the new house.

1] Right Location

The first and most important factor to consider while buying a home is the location. The condition and price of any home can be changed, but you cannot change its location. Location creates desirability, desirability creates demand, and demand raises real estate prices.

Major factors that help one choose a location are geographical connectivity based on the infrastructural facilities, commutability, modes of transportation, etc. Basic facilities like markets , hospitals, banks, supermarket / departmental stores in the immediate vicinity, distance from Schools , colleges, religious places, recreational areas [gardens / multiplexes & malls etc] define the ease of living.

The above factors not only affect your decision to buy a property but also play a vital role in setting a certain benchmark to the resale values.

2] Right Realtor [Property Consultant]

A good realtor is your ally and your best resource, they have excellent local area knowledge and save a lot of your time that would otherwise be spent on running from pillar to post searching for your choice of an apartment.

Lets look at specific advantages that an experienced realtor can bring to the table :

Creating a preference pool: They’ll dive through online databases and other physical locations to pool a data of prospective homes, along with their current market information and neighborhood advantages.
Neighborhood familiarity:A knowledgeable realtor can offer invaluable advice and help you find a community that is in line with your needs and lifestyle including schools, conveyance stores, cafes and restaurants.
Offers & Negotiations: Based on their vast knowledge of the current markets and their relationship with developers, realtors will be able to help you draw up a competitive offer at the best possible price.
Legal nuances and paperwork: Realtors have invaluable experience with legal documentation and they know what to look for and actually what it means. They can clarify all the clauses, contingencies and jargon-filled fine print as well as find hidden fees and conditions that you may have overlooked.
Resolve any disputes with the builder: There’s no way to sugarcoat it – disputes and disagreements will likely arise between homebuyer and builder. It is in your best interest to have a realtor resolve any problems that come up.
Ensure the project is on schedule and within the defined budget: Inexperienced new buyers are often taken advantage of because they don’t fully understand the process. With the help of a realtor.

3] Right Developer

It is very important to associate with a reputed developer because, as a buyer, you are entrusting your hard earned savings as an investment in the project of your choice. A bunch of common protocols one should follow are listed below:

Compare previous project deliveries :Always remember that dealing with an established developer with great credentials is the first and a solid defense against falling prey to fraudulent practices of real estate agents and unscrupulous operators.

Find answer to questions like

> how long the developer has been in business,

> have past projects have been delivered according to committed timelines,

> have the facilities and amenities provided in line with what was promised,

> have there been delays and if so, then what was the period of delay and reason

> what are the ongoing projects and their similar statuses?

Ensure that the project meets the legal requirements: RERA has regulated the industry in a multi fold manner. RERA becomes that one platform where a buyer can check all the details related to the project like the land details, approved plans, authorized permissions, committed amenities and possession timelines.
Collect some information about the financial health of the developer: This is generally very difficult unless it’s a listed developer who will have all his financials in the annual reports. However, for an unlisted developer the only way is to have market information , this is where a realtor is an excellent source of information.

4] Right Financials

To determine how much you can spend on a home, take a close look at your budget. Review your bank statements and spending habits for the last couple of months. A loan consultant like Loan Junction can help you arrive at a loan eligibility even before making a bank application. They can help you select the right product and the right bank with best interest rates by comparing across the industry. First-time homebuyers often face difficulty in funding their dream home or securing a loan. First time home buyers get additional tax benefit for purchase of residential properties of value up to Rs 50 lakh.

The government has also initiated some excellent schemes encouraging and enabling the younger eligible generation to purchase their homes. With a special focus on the lower income group (LIG) and middle income group (MIG), the Government introduced Pradhan Mantri Awas Yojna [PMAY] in 2015.

5] Right Negotiations

Once the property choice is clear and the finances are sorted comes the trickiest part of the deal – NEGOTIATING! Negotiation is not just about the price; other factors on factors like staggered schedule of payment, or any other value-added service .

Elements to consider prior to your deal closure

Market awareness: It is important to have knowledge about the price trends of the desired location. A realtor comes handy with comparisons and will also give a fair idea as to what can be the negotiation band and a closure price.
Place the offer: A serious buyer is likely to get a better deal out of the developers. Place your offer and more importantly show them the money, because developers also face a serious issue of window shoppers . An attractive and ready down-payment will always give the buyer an upper hand in deal closures.
Practical approach: Developers are definitely more than willing to negotiate. However, there is a line drawn to their affordability. So, offer a number that doesn’t pinch you as a buyer and the developer both or you are likely to lose the deal.

Geared up with this knowledge, you can now take an informed decision while choosing your dream home.

About the Author: Vaibhav Kanabar is Managing Director at Derivados Consulting Pvt Ltd. In the short span of his entrepreneurial journey, Vaibhav has garnered immense credibility within the structured deals space, giving off best solutions to real estate companies on projects in Mumbai. His sharp business acumen has led him to assess unique opportunities and create niche business models in real estate financing space through debt and equity advisory. His entrepreneurial enthusiasm also resulted in a brand called ‘Loan Junction’ for managing retail lending and another brand called ‘White Fences’, Home Advisors managing real estate sales & Marketing mandates. He can be reached at Vaibhav.Kanabar@derivados. co.in

Tags: Financial Planning

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One Comment

Dilip Raichura says:

Good Article. Good information. Real insight of subject. Please keep on writing n informing. Thank.

Reply

November 24, 2018 at 8:43 pm

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