10 Tips for First-Time Home Buyers!
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Education, Profession, Wedding, House Purchase and Children form the milestones of a common man’s life. Of these buying one’s first house is very close to a person’s heart as feelings of pride, ownership, achievement, joy and fulfillment accompany this purchase.
As buying a home is the biggest investment and a lifetime one at that a lot of groundwork and research needs to be done to ensure one is making the right choice and to enable one to enjoy long term benefits. After all there’s no return and exchange policy available on this purchase! Moreover for most of us a house is a legacy which is passed on from generation-to-generation.
Gharpedia helps ease your home buyer odyssey by listing out parameters to guide you.
Tips for the First Time Home Buyers
Tip 1: Thorough Assessment of Your Requirements for Dream Home
With the real estate boom and every second entrepreneur stepping into the realty sector there is a plethora of choices, and trusts us each and every one of them looks and feels attractive too! Moreover the promotion being done on multiple social media handles, the captivating brochures and the freebies and discounts on offer can confuse even the most level-headed customer.
What is of core importance is that you sit with your family and chalk out everyone’s expectations with regards to their dream house. While for one member having a garden is critical; for another member a pooja room is something which they cannot do without; while for the business-minded member of your family the ROI (return on investment) is the deciding factor; for yet another member it could be the locality or the distance from their academic institution or workplace which are more important.
Post collating all the requirements – vet this list and bring it down to 8-9 points which are do or die one without which you cannot even think of looking at a house, let alone buying it!
On another note – many home purchases are not for self-use but rather for investment. So while some considerations remain common across both these goals, some may differ. General factors that you should consider to assess your needs include:
Tip 2: Think About House Size Before You Even Thinking of Buying a New Home
If you’re buying a house for self-use then it’s important to take into account your family size and opt for the correct home size with the right number of rooms.
In case you’re young or recently married future space requirements need to be kept in mind while purchasing a house.
In case you’re buying a house purely from the investment perspective then selecting an optimal size is a mandate as too small or too large a house would be a tad challenging to lease out.
Tip 3: Choice of Significant Conveniences While Buying Home First Time
The moment one thinks of buying a property the first thought is to select the best in the market especially in terms of amenities and there are options galore in the market these days smart homes, green homes the list is endless! But a point to remember here is that all these modern conveniences come at a dearer cost and not all the extra facilities may be of practical use to you. So go back to your list and check out the must-have facilities for your family’s comfortable living.
Say for families with children a playground in the society is a necessity which is not the case with middle-aged parents whose children may prioritise in-house gyms for fitness. While those families with aged parents may have a different set of priorities – senior citizen friendly amenities, an in-house garden where they can socialize with other seniors in their age group, essentials available at walking distance etc.
In case you are purchasing a house for investment then select one which has basic amenities that can give you a competitive edge over other options available in the market.
Tip 4: Area Preference for Your New Home
When it comes to the location of the house parameters which need to be kept in mind are – good and safe neighbourhood; ease of access in terms of public transport; proximity to workplace, educational institutes, entertainment options, health care facilities, market place, banks et al.
Another thing that is worthwhile to understand here is that land is a scarce and immovable resource, and it is demand which drives up its price. So opting for larger properties on the outskirts at a competitive price would be a good proposition.
While purchasing property from the investment perspective it would be good to consider locales that hold a record of good price appreciation patterns to maximize your investment benefits over the long term. Also do check out the inventory overhang of the location – a large number of unsold houses in an area signals price appreciation at a slower pace due to simple demand-supply economics.
Tip 5: Possession Time
This plays a pivotal role in determining yours needs. Home buyers have the option of ready-to-move -in homes or under-construction homes. The benefit of the latter is a breathing space with regards to the instalment schedule.
For those home buyers purchasing realty from an investment perspective, it would be advisable to buy one in its construction phase, as they would be benefitted with significant price appreciation by the time the possession is handed over. However, one must mandatorily check if the builder has all the legitimate approvals, certificates and the licenses needed (to avoid delays in project completion times or unnecessary complications).
Tip 6: Prepare and Stick to Your Budget While Purchasing Your First Dream Home
With a house demanding a huge investment of your resources budgeting and planning are critical to this asset. Post gaining a grip of your requirements, the next step is to plan out the budget to buy the type of home that suits your needs. While budgeting you should:
Tip 7: Research Average Property Costs of New Home
Home prices vary basis the area, facilities included in the property, open area and the promoter of the property.
The brand value and reliability of reputed builders comes with a slightly higher price tag! Hence two similar-sized properties in an area may have a price variation of INR 5 to 20 lakhs. This could be due to add-ons like green area, sports and fitness facilities, clubhouse et al. So do remember to factor in these costs and benefits when you’re averaging your budget estimate.
Post gaining a rough approximate of the cost you need to next budget and determine whether you can afford it or not.
Do not at any cost fall prey to your emotions and try to buy something way out of your reach and land into a long-term debt!
Tip 8: Keep in Mind the Element of Additional Costs When You Buy a New
A good thing to remember while buying a house and budgeting is the burden of additional costs -such as mutation and registration costs – besides the property costs.
Once the house has been on-boarded other costs which will crop up include – property taxes, maintenance costs et al.
A word of caution – never compromise on house maintenance as well-maintained property prices appreciate better vis-à-vis poorly maintained ones. So do take out some time to visit the past projects of the builder to evaluate their maintenance and general upkeep of the property.
Tip 9: Detail Your Payment Method for Purchasing a New Home
Properties in construction phase do not mandate the entire payment at a go – the same can be booked at a down payment and the balance payments can be made through installments in line with the payment schedule suggested by the builder.
While ready-to-move-in properties require making the entire payment at the time of purchase to facilitate transferring it in your name.
Self-funding is for those blessed with a sturdy bank balance and comfortable monthly savings; while for others housing loans are an option worth exploring.
First time home buyers generally opt for home loans which entails – making a down payment of usually 15-20 percent of the home value; and paying the remaining sum over the loan tenure along with the interest. Interest rates here can be fixed or floating – the same need to be discussed in detail with your chartered accountant.
If you are living in India and thinking of buying home with the home loan then, must read the article on types of home loan in India.
Tip 10: Check Out Government Benefits Before Buying New
Multiple government benefits are available and many homebuyers miss out on encashing them due to lack of information and eligibility criteria. Schemes like – The Credit Linked Subsidy Scheme and the Pradhan Mantri Aavas Yojana (PMAY) – offer savings up to INR 2.6 lakhs with their special interest subsidies. Moreover you also have the opportunity to save up to INR 2 lakhs on the interest paid and INR 1 lakh under section 80C, Income Tax Act.
It is advisable to discuss these options with your tax consultant/chartered accountant so that you can benefit from such schemes and benefits.
So go ahead take the first step towards your dream house!
Do visit the site of each of the properties on your list to get an actual understanding of what you will get, and observe shortcomings for yourself, if any.
Choose a builder – basis online reviews, visiting past projects and talking to their existing buyers. He/she should be reputed for – on-time handover, good quality construction, a customer-centric approach and ensuring that the property is well maintained.
Hope this blog on tips for first-time homebuyers will help you in buying your dream home.
Huta Raval – An English Literature and Journalism Topper, Huta Raval has graduated from the L D Arts College, Ahmedabad. Post serving for 23 years in the NBFC and Public Library Sectors her desire for ‘writing the unwritten’ brought her to the creative field of content writing. Her clientele comprises of NGOs, Blogging Platforms, Newspapers, Academic Institutions, et al.