Purchasing a house is a significant and thrilling milestone in a person’s life. Whether you are a first-time buyer or someone looking to upgrade your home, it is crucial to approach the process with careful consideration and thorough research.
With the wide range of options available in the real estate market, it can be overwhelming to find the perfect home that suits your needs and preferences. As a new homebuyer, there are several vital factors you should consider while buying a house. By taking these essential aspects into account, you can make an informed decision and ensure a smooth and satisfying home-buying experience.
Ridham Gada, partner at Prem Group and president-elect, NextGen, NAREDCO, Maharashtra, explains five key things to watch out while buying a house.
HOME FINANCING
The first item on your checklist before buying land, a house, or an apartment should be your budget and available funds. While home financing is readily accessible to most buyers, not all costs are covered by financing options. On an average, homebuyers are expected to contribute 10 per cent of the purchase price as a down payment from their own savings.
If your current liquidity does not allow an outright purchase, you may consider an ongoing or upcoming project where disbursements are made in phases. In addition to the down payment, buyers also need to account for GST, registration fees and stamp duty, since these charges are the buyer’s responsibility.
RESELLER DOCUMENTS
While builder information is available online, verifying the details of a reseller is not as easy. In such cases, buyers need to rely on purchase documents.
- Release certificate: In addition to the original title deed, banks also issue a release certificate, which assures a buyer that the loan has been fully repaid
- ‘No dues’ certificate from Society: Buyers should insist on obtaining a ‘no dues’ certificate from the housing society, ensuring a smooth transfer of title and confirming that no outstanding dues are owed to the Society
- Utility bills: Request previous property tax receipts, electricity bills, water bills and so forth from the seller, along with other bills, to ensure there are no pending payments to any government authorities
- Transitioning power of attorney: Upon purchasing the property, the buyer should obtain a transitioning power of attorney from the seller. This grants the buyer the authority to apply for changes in address for utility bills and at the bank
- Issuing Public Notice: The buyer must publish a notice in a public newspaper regarding the purchase. This step ensures that the property is free from any legal conflicts. To issue the notice, the buyer should seek legal guidance from an advocate
TAX DEDUCTED AT SOURCE ON PROPERTY PURCHASE
The buyer is also responsible for withholding taxes at a rate of 1 per cent before making payment to the seller for a property amounting to Rs 50 lakhs or more. TDS should be subtracted from the payment sum and submitted within 30 days from the conclusion of the month in which the deduction is conducted. If the buyer makes payments in instalments, taxes must be withheld before each instalment is paid.
CONDUCT DUE DILIGENCE ON THE DEVELOPER
Despite the implementation of the RERA Act in 2016, real estate projects in India still experience alarmingly high levels of delays. That is why it is important for buyers to assess the developer’s experience, market reputation and track record of fulfilling promises before committing to a property purchase.
If the selected property is newly developed or under construction, it is advisable to carefully review the approved plans before making any deposit to ensure they meet your specific needs and expectations.
Verify the RERA number and date provided on government websites, comparing them with the completion date mentioned by the developer in the agreement. It is important to have a clear clause in your agreement regarding compensation or refund procedures if the dates do not align.
CONTACT RERA-CERTIFIED AGENT
Certified agents who have completed real estate certification courses possess the knowledge and skills required to assist first-time home-buyers. They can guide buyers through the home-buying process, help navigate complex contracts and paperwork and offer insights into market trends and property valuations.
Agents also assist first-time buyers to identify suitable properties within their budget and preferences, negotiating offers and terms and connecting them with other professionals, such as mortgage lenders and home inspectors. Finally, real estate agents play a vital role in guiding and supporting first-time home buyers throughout the entire purchasing journey, ensuring a smooth and informed experience.
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