When my sister decided to buy her own house, she could barely conceal her excitement. The thought of owning her very own home tickled her pink.
But once she actually started house hunting, her enthusiasm began to fade rapidly.
She and her husband would see great houses and realise they could not afford them.
Or, they would trudge along with their broker to various homes to realise they had only wasted their time.
They wanted a home, but hunting for one seemed to be too laborious.
Here is a simple guide for someone setting out on this journey.
Before you even step out
Before you even start looking for a home, you need to put certain basics in place.
1. The amount
How much can you really afford?
Which one of us does not want to live like a millionaire? The fact is, very few of us can. It is pointless shopping for houses that are way above what you can afford.
Here are some options to consider.
1. Figure out how much loan you can get.
Before even looking for a home, you must make a few trips to various home finance companies and banks. See how much they are willing to loan you.
The determining factor will be your earnings.
2. Keep some savings aside to make the downpayment.
Remember, they will not finance the entire amount. They will only pick up 80% to 85% of the total cost. You will have to give them proof that you can pitch in the balance amount.
3. Check other sources of raising money.
Talk to family and see if anyone is willing to lend you money. Or, if you have an inheritance coming your way or a fat bonus. Do you want to sell some shares now and utilise the proceeds towards buying a home?
2. The location
Where would you like to stay?
Assuming you have decided on the city in which you wish to buy your home, you will now have to get really specific.
Which area of the city falls within your budget? The suburbs? The city centre?
Which neighbourhood?
Do you want a home on the main road or close to the main road? Or do you want one in a small quiet lane?
Would you prefer a park or a garden close by?
3. The space
How big an apartment do you want?
Are you looking for a three-bedroom, a two-bedroom or a one-bedroom? Or are you more concerned about the area?
For instance, you do not mind an 800 sq ft area, irrespective of whether it is a one-bedroom or two-bedroom. Or a 1,000 sq ft area -- be it a two-bedroom or three-bedroom.
4. The house
What is it you really want (or don't want) in the house?
A bathroom attached to each and every bedroom?
A balcony?
Are you looking for an apartment with a terrace attached?
Do you want an apartment just under the terrace or are you sure that you do not want such an apartment? Do you want an apartment on the ground floor?
If you are certain of these parameters, your broker will be able to take you to very specific apartments.
Doing the rounds
Now that you are armed with a budget, a locality and a fairly good idea about the house you want, you are off to a good start.
1. The infrastructure
You should take a good look around the neighbourhood before you buy the house.
How far is your workplace and the school?
Do you need a good crèche nearby? Check around to find out if there are any.
How far is the market? Are there any grocery stores in the near vicinity?
If you will not be using your personal transport, look at accessibility to public transport. Is there a bus stop near by? Are taxis or auto rickshaws easily available? How far is the closest railway station (specially if you live in Mumbai)?
Does the area have a lot of water problems? Is electricity known to go off frequently?
What are the neighbours like?
Does the building have adequate security?
What are the maintenance (the monthly/ quarterly bill that comes from the building society) charges?
Is parking available? What are the charges?
Consider the age of the building.
2. The house
If it is still under construction, you can consider some amount of customisation.
Do you like the layout? Would you like certain changes made? Maybe a wall broken and two rooms merged?
What about the plumbing and electrical points?
Take a look at what your neighbours are doing to get an idea. Or visit other apartments (both completed and under construction) to develop on your ideas.
Check on the builder too. Is he well known? Is he reliable?
Generally, home loan companies have pre-approved properties for which they readily give finance. If your builder is included in this list, it means the property is legally safe and the builder has a good track record.
However, it does not mean your property will be completed on time just because the builder features on the pre-approved list. One builder, for instance, delayed in completing the construction, the electricity meters took two years to get installed and the land title was not transferred to the society for years.
However, his new construction was still pre-approved by a leading home finance player.
If it is a resale (apartment being sold by the person who owns it and has probably been living there), look at the amount of work that will have to be done.
If there is a lot to be done, you can negotiate to buy the flat at a cheaper rate.
Take a good look at the tiling, the paint, the plaster, the wiring, the walls (is there dampness, indicating leakage?). Take along an electrician and plumber to take a careful look around.
3. The building
Do you want one with a garden? What about parking?
Has the society already been formed? Is there any litigation going on?
Take a walk around the premises. Is the building well maintained? When was the last time it was repaired? Are there cracks in the structure? Is there garbage lying around?
Give a little, take a little
The above parameters may make you feel very organised. But, hang on, it's not that simple.
Now let's say you want a three-bedroom apartment in a plush neighbourhood, but you cannot afford one.
In that case, decide where you are ready to make a compromise.
If you really want to live in that neighbourhood, then compromise on the space of the apartment. Maybe you should settle for a two-bedroom. If you do not want to compromise on the space, you may have to consider another neighbourhood.
This will go on and on. You may have to compromise and travel a longer distance to work. Or, a long walk to the market. The neighbourhood may even offer everything, but it may not catch your fancy.
While these parameters should definitely get you started, be prepared for some serious legwork.
And don't get discouraged. It will eventually pay off.
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