With high disposable income, especially in the case of working couples, young Indians are looking at real estate with increased keenness. While some consider real estate as an investment option with good returns as the key objective, there are others who want real estate solely for their end use. But, quite often these potential buyers are in a quandary as to what, when, where and how to invest.
Budget is the most important consideration while planning to invest in real estate. One needs to understand that when buying a home, it is not merely the EMI that needs to be taken into account. The challenge that most home buyers face would be the initial down payment, which typically ranges between ten and twenty per cent of the property value. Once this amount has been planned for and put in place, the next move would be to shortlist a financial institution for a home loan for the remaining eighty per cent. Most banks provide up to eighty per cent of the property value. Loan approval depends on one’s CIBIL score, which if found to be low can lead to rejection of the loan application.
The home loan covers all aspects of the home like base cost, infrastructure costs, car parking, club house membership, legal fee and others. With several reputed banks and non-banking financial institutions offering home loans, consumers are spoilt with options for home loans.
Careful consideration needs to be given to why the property is being bought, whether it is for end use or as an investment option. An important aspect while planning to buy a home, especially for end use home buyers, is the location of the property. Locational advantages include connectivity, proximity to places of work, schools, hospitals, shopping and entertainment. Location also determines the present price and the future appreciation prospects thus also driving the investment focused customer segment.
The next important consideration is choosing between an apartment complex and a project. Here, home buyers would need to validate the credentials of the builder such as builder reputation, his experience and track record of delivery. Quality and appeal, life style amenities, infrastructure, type of plans, sizes and vaastu considerations that the project has to offer also plays a critical role.
So, where does a prospective buyer look for potential properties? While the most convenient option would be the online route, which houses several property portals that extensively describe available properties in terms of budget, preferred area in the city, size of the apartment, villas, plots, project USPs and of course, the price and contact details of the developers or the seller. In addition to this, almost every developer has elaborate websites that detail their projects along with valuable customer testimonials and reviews. These avenues can greatly help potential home buyers to shortlist prospective properties before finalizing the best suitable option.
It would be an added advantage if the builder is affiliated to a governing body like CREDAI. One must also check plan approval and agreements to ensure complete regulatory and legal obligations before investing in a property. There are several important legal documents such as share certificate, sale agreement, society documents, sanction plans, encumbrance certificate, etc. without which the sale of a property will not be considered as complete. Property buyers need to verify these documents and ensure that they are duly signed.
Additionally, the sale deed which is governed by the Registration Act is one of the most valuable legal documents in a purchase or sale of a property. The purchase or sale of property is not legally complete until a sale deed is signed between the buyer and the seller. Usually a sale deed is signed only after both the parties are satisfied and comply with the terms and conditions as said in the sale agreement.
The most important aspect, which has come as a huge boon to home buyers is the introduction of the Real Estate Regulatory Act (RERA) which addresses many concerns of home buyers that were previously not addressed by developers. It is therefore imperative for potential buyers to verify RERA registration of all new and on-going projects and only then proceed. RERA ensures that the developers building plan sanctions are in place, the sale agreement, the list of specifications and amenities, delivery dates, payment terms are all in strict accordance with RERA guidelines and ensures that the agreement is a balanced and legally correct, thus protecting the interests of the buyer.
(The author is CEO, Ozone Group)
