Buying a house is probably one of the biggest decisions that one makes in their life. People invest their hard earned money and life’s savings into buying a property and they want to be take utmost precaution before buying it so that they do not regret their decision later.
Thus, we have compiled this list of things to consider before buying a house in India, to help you make an informed decision. To make things simple, in this article we will consider only the event where you are looking to buy a house (apartment or flat) in a residential project that is being built by a developer.
Internal Factors are the ones that are related to the particular property that you are considering. For instance if you are looking at a particular residential project to buy an apartment, then the internal factors are the ones pertaining to that particular project.
External Factors are the ones that are not a part of the property but a part of the market in general or dependent on your financial plans. These factors may remain the same regardless of whichever property you choose.
Property Buying Guide In India
Things to consider before buying a house in India (Internal Factors)
RERA or ‘Real Estate Regulatory Authority’ Each state has an authority in place to regulate the real estate projects. You need to ensure whether that particular project is registered with RERA. Also, if a project is RERA registered, it doesn’t mean that there are no issues with it. It is only the proof that the developer has registered the project with the authority and if there are any issues faced by the buyers, they need to approach RERA.
2Reputation Of The Developer
One of the main things to consider before buying a house in India is the reputation of the builder or the developer who is going to construct this property. This thing is more important if you are buying an under-construction property as you need to be sure that the developer will deliver you a good quality product in the stipulated time. You need to look at the past performance of the builder and his track record whether he has finished his previous projects on time.
3Customer Service Quality
Buying a house is not a transaction that is completed within a couple of days. Once you book a property with any developer, you are tied up with him till the project is ready and even after the handover, Thus you need to take into account the kind of service quality that the developer is providing to during the sale and even after handover.
4Ratio of Constructed Space v/s Open Space
While considering any project, you need to check how much open spaces are there within the project. If there are too many buildings or too tall buildings and there are less open spaces, it causes issues like over crowding in the amenities or parking and traffic issues. Thus, it is essential to see whether the open spaces provided within the project are sufficient to sustain the number of residents that will be eventually using the premises.
The above image is a sample project layout where you can see that the ratio of open space to constructed space is good enough to cater to the needs of all the residents.
5Number Of Units Per Floor
Have you considered how many units or flats are there on one floor? How does it matter to you? Well, it matters because if there are too many flats on one floor, there are concerns like privacy and usage of lifts, etc. Nowadays, you see projects where there are even 16 flats on one floor. If there are no common walls or the flats are not too close to each other, then it’s fine otherwise you will have to compromise on privacy.
6Number Of Units In The Project
Before buying a house or a flat, you also need to consider how many units will be there in the entire project once it is ready. Some people prefer to stay in a small society with few flats that gives them a sense of privacy while others prefer to stay in large townships where they can be a part of a large community.
7Efficiency Of The Layout
Have you checked how efficient the flat layout is? Efficiency of the layout means that you get the maximum usable area for the price that you pay for a particular property. For instance, take two flats ‘A & B’. Flat A has an area of 700 sqft but the room sizes are spacious and flat B has an area of 850 sqft but the room sizes are smaller. This happens because a lot of area is wasted in the passages and terraces within the flat. You end up paying more for a flat that has lesser usable area.
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In the sample floor plan above, you can see that although the total carpet area of the flat is less (708 sqft), the living room and the bedroom sizes are pretty decent.
8Specifications Of The Unit
Specifications means the type and quality of the materials that the builder is using to finish the flat. You need to check the quality and the brand of tiles, doors, windows, electrical and plumbing fittings, etc that the builder is going to provide you with the flat. The builder may have shown the best quality fittings in the sample flat but they may be different than the ones that are actually being provided to keep the construction costs low.
It is difficult to justify the price that you are paying for a flat solely based on these specifications, but you can at least get an idea of what you are getting for the price that you pay.
9Architectural Pros & Cons
Ask the developer to provide you with the architectural drawings of the flat and get it checked from an architect or an interior designer. At times, there may be some flaws in the design that may hinder your interior planning and design. For instance, there may be a pillar or column in the wrong place due to which you may not be able to place your furniture properly or fix any appliances.
Another important point about architecture is to see how well planned the entire building and the project layout is. Does it allow a good air flow and ventilation within the premises? Is there ample natural light coming into your house? Nowadays its a little tough to find a flat which scores a 100% on this but you can get a fair idea about it.
10Project Documentation & Title Verification
Now that most states in India have RERA in place, it is easy to verify the basic documents of a project. You need to check the basic documentation like the commencement certificate, sanctioned plans, agreement with the landowner in case of a joint venture project, etc. Its better to get these documents checked by a lawyer who specializes in real estate.
You need to be sure that there are no issues with the project that might stall the construction or create legal issues for the builder and eventually delay the possession of the project. The lawyer will also check whether the title of the property is clear and the developer has the right to build and sell you the property.
Once your booking is done, do not forget to ask the developer for a draft of the sale-purchase agreement that he is going to execute with you and also get it checked by the lawyer. Most of the developers have a standard format for this and generally do not allow any changes in it but you can get an idea about what are the legal obligations on your part as well as on the part of the developer.
Check whether all the payment terms are mentioned properly and also there is a clause about what the liability of the developer is in case he is not able to handover the property to you in stipulated time.
12Maintenance Required After Possession
A lot of buyers miss out on one of the most important things to consider before buying a house in India i.e. how much maintenance you will have to pay after the possession. In most cases, the builder takes an advance amount for a couple of years but later hands over the maintenance and repairs of the property to the society. This is when it becomes tricky. This cost may go high if the builder has provided too many high cost incurring facilities and the society is not able to manage the funds for their upkeep.
13Buyers’ Profile In The Project
Have you considered who your new neighbors will be? Many people prefer to stay close to people belonging to a certain professional or social groups. So while considering a property you need to check who the other buyers in the project are because eventually they are the ones who are going to stay along with you in the society.
Another one of the things to consider before buying a house is whether the builder has sold most of the flats to end users or investors, or whether he has given some flats to the landowners on account of their joint-venture agreement. If most of the flats are unoccupied then there is very little participation in the society matters.
14Safety & Health Hazards
While buying a property, you also need to consider whether the premises are safe for you and your family to stay. It should not be close to any health hazards like factories, high tension cables, garbage dumps, etc which may pose a health hazard for you in the future. One way to check this is to do a small survey of the vicinity and also check the latest development plans from the municipal corporation to check whether there are any adjoining plots reserved for such activities.
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Property Buying Guide In India
Things to consider before buying a house in India (External Factors)
15Location Advantages & Disadvantages
While looking for a flat, you need to identify the key advantages and disadvantages of its location. You need to check under which civic administration’s jurisdiction it comes in and what are the planned projects by the Government. You also need to consider how the location is from a residential point of view and whether it has enough greenery and water supply that would last for the coming generations. Another point to consider is whether the location is easily accessible from all parts of the city and other towns in the state.
16Accessibility to Social & Civic Infrastructure
Further to the above point, you also need to consider how accessible the project is to major schools, hospitals, shopping centers, public transport, banks, restaurants, hotels, etc. Are there good roads currently available or are there any plans of new roads coming up in the future? You also need to check the availability of basic needs like uninterrupted electricity, cooking gas pipelines, good internet service providers, etc.
17Average Price In The Micro-Market
Micro market means the locality in which you are looking to buy a property. You need to consider the average price that is going on in that location before buying a property. If you get the basic idea about it, you will be in a better position to plan your budget and negotiate a good deal with the developer.
18Budget & Loan Eligibility
One of the most important things to consider before buying a flat is your budget. How you derive this figure is totally up to you. While buying a property, the bank will give you a loan of around 80% of the property cost. So the remaining 20% has to be paid by you. To pay this 20% you have to arrange your finances in such a way that you are able to pay the builder within a month or so.
You also need to check how much amount of loan you can avail from the bank. It is generally 50 times your income. So for instance, if your monthly income is 50,000 then you may be eligible for a loan of 25 lakhs if you do not have any other monthly EMIs.
19Understanding Taxation & Govt Schemes
While buying a property, you also need to be aware about the taxes that you need to pay while buying the property and also after you own it. Generally in India, GST is charged on under construction properties and on ready properties there is no GST. Each state has its own stamp duty and registration charges. For instance, in Maharashtra the Stamp Duty as of April, 2021 is 6% of agreement value and registration charges are INR 30,000 or 1% of the agreement value, whichever is less.
Also do not forget to check your eligibility for Government schemes like PMAY (Pradhan Mantri Awaas Yojana) where you can get monetary benefits in the home loan while buying your first home. Although this scheme is currently discontinued, look out for similar schemes coming up in the future.
20Resale, Rental Value & Capital Appreciation
Another one of the external things to consider before buying a flat is the resale and rental value and the capital appreciation that you will derive from the property in case you decide not to occupy it or sell it in the future. In an ideal market scenario, you get roughly 5% capital appreciation on a property provided that it is in a good and upcoming location. Thus if you are able to predict how much your property value will appreciate in the future you will be in a better position to make a buying decision.
Property Buying Guide In India
This concludes our list of ‘Things to consider before buying a flat in India‘. We hope that with this list we were able to give you a little clarity about the home buying process and help you make an informed decision. In case you need any more details about any of the points mentioned here, you may get in touch with us. For a detailed guide and a personalized guidance on buying a property, sign up for a free consultation session with us.