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10 things to consider before buying your home.

10 things to consider before buying your home.

Photo courtesy Asad from Pixabay.

A home is where a person wishes to stay with their loved ones and is one of the biggest investments in their life. Many people often go overboard in their investments so as to be able to exhibit their status to society. They do all the things possible to make the house as presentable as possible. Since it involves an investment of a large amount of money, people should be all the more careful so as not to regret their decision later on. The homework has to be done and here are a few things that a person should take into consideration while purchasing a house-

1)  How much can you afford?

The price and the location where you will buy a house depend on how much you can pay for the property. You may have other loans too and wish to have a home of your own. There is a down payment to be made before you can even think of applying for a loan. The savings have to be checked and if your spouse is working, then it is all the better for your finances. Understanding the needs of the family will be needed to take a better decision. An effort should be made to purchase the house within budget and not go overboard in taking a big loan amount for which you will have to sacrifice a few decades of your life struggling with your finances.

Check your credit score. If the credit score is good you will be able to get a home loan at a better rate. A good credit score can be maintained by always clearing dues on time.

2) Location-

The location of the house is very important and the price of the house too depends on the location; which will always be higher where there are better amenities. The place where you and your spouse work and the commuting distance have to be taken into consideration. If you take a house in the suburbs the price would be much cheaper but commuting to your workplace in the city may take two hours of travel one way. The school where you plan to enroll your children should be of good reputation and they should not have to travel a long distance. In the same way, good medical facilities should be nearby for your old parents and the place of worship; a temple or a church is desirable to be nearby so that they don’t have to walk a long distance. If you don’t have a car the transportation system in the area should be good so as to reach anywhere you wish to travel without waiting for a long time.

3) Real Estate Forecast-

Due to the reforms and the excessive price of the last decade the real estate market was in the doldrums for almost five years in major cities in India. The outlook for property now is much brighter with the home sales happening at a much faster pace, resulting in quick clearing of the inventory. The upswing in the cycle is expected to last for a few years more.

Before buying a house look for the forecast of the real estate in the city. There are real estate experts on television shows who give their views and if the prices are expected to rise it becomes safe to book your home at the earliest. The rising and falling interest rates too have their effect on the housing market. You can purchase property in places where there would be increased spending on infrastructure.

4) Search for the best home loans-

The home loan that you are eligible for depends on your income, age, existing loans, and repayment capacity. Compare the home loan rates of a few lending companies as the loan amount would be in a couple of lakhs to be repaid over a period of years. The loan eligibility criteria vary with the banks, and the NBFCs have less demanding eligibility criteria, but their rates may be higher than the banks.

You can select the fixed rate loan or the floating rate loan according to your calculations. A fixed-rate loan is a loan where the rate of interest remains constant throughout the tenure of the loan while in a floating-rate loan the interest changes depending on economic factors.

5) Find a good real estate agent-

A real estate agent can make a good difference in the process of buying a house. They can set a price to the home the moment they walk in through the door and due to their experience can make out whether a house for sale is underpriced or overpriced.

Sometimes the people don’t want to advertise on the website about the sale as they would not want their friends or neighbors to know, or due to other personal reasons like a financial problem or a divorce. In this case, the real estate agent would be the only person knowing about such a good property. There is lots of paperwork to be handled and the agent would be of great help in such cases. There are repairs that need to be carried out and you may have a heated argument with the seller but the agent would be able to iron out the differences smoothly. It is a good idea to check two to three real estate agents, or you can ask for suggestions from people you know about a good agent who can carry out the job well.

6) Find your dream home-

A real estate agent would be able to show you a few houses according to your needs. But in case you wish to search online you can visit the properties yourself and keep a note of each house, the area, and the price, as you will be visiting many homes and it may be difficult to remember the details of all the properties visited.

There are a number of things you can check in the visited properties if it is a resale flat. The electrical system should be functioning properly, the geysers should be operational, the toilet flush is to be functional, and the showers are operating, besides checking the doors and windows if they operate satisfactorily. If you have a car, check if there is a parking space available. Besides the property should be located near a school, restaurant, and shopping center and have a good public transportation system nearby.

Negotiate the price with the seller and the price should be in the range of properties in the neighborhood.

7) Home Inspection-

Getting the home inspector to inspect the house you are planning to buy is a good idea as they can find out if any structural damage is there in the property. They are well trained and experienced in this field and their survey will help you find out if any problem exists which can save you a lot of money. The home inspector will submit a report on the findings which is available to both the buyer and the seller and you can ask the seller to get the things repaired before closing the deal.

8) Additional Costs-

Besides the cost of the house, you have to pay the stamp duty and the registration charges to the government which can add up to a substantial amount. Take these costs into account. Other than this there are the charges for the help you take from various professionals which could be the real estate agent, home inspector, and lawyer. If the house has not been painted for a while you will have to get it painted in order to give it a nice finish.

9) Check all the documents-

If you are purchasing a property for the first time you would not have much knowledge about the documents. Documentation checking is important and more so if it is a mortgaged property. There are many documents that need to be checked and since you may not be aware of the legal consequences you can take the help of a lawyer. The property title may have to be checked and besides this, the MOU and sale deed will have to be prepared. A lawyer who has been active in this field would be able to provide a much better value. If there is any problem with the title, the lawyer will be able to tell beforehand, which would save you a lot of stress rather than paying all the money and later running around in court.

10) Close the sale

The documentation part has been taken care of and you can now take possession of the house after completing the necessary paperwork at the registrar’s office and making the final payment. You are now ready to move to your new house or put it up for rent if you wish. Perhaps this would have been the biggest investment in your life till now and you can be free of stress. You can take out property insurance where there are a number of policies having various levels of protection and you can select according to your needs.

When all these steps to buy a home are followed properly with due diligence, you will be saved from a lot of stress later on.

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