The most comprehensive checklist for your realty purchase

Planning on buying a property soon? Here is a detailed list of various aspects related to the home buying decision, sale execution and financing that needs to be considered while purchasing your home.
Property document checklist
Unfortunately, the realty market is fraught with much deception and poor business practices. When you visit your developer’s site office ask to be shown relevant documents proving ownership of land, permission to construct or occupy the property, as applicable. Below are three of the most important property documents.
Title deed
Title deed is the document showing ownership of a property. Examine whether the intended property has a clear, marketable title and the land is in the builder’s ownership. Look out for the title clearance certificate from an advocate validating the property ended has clear title.
Construction permits
Ensure that the land has permission to be used for non-agricultural purpose. Verify approvals from the local authorities on the building plan (including area break-up, number of floors etc). Check building commencement certificate in case of under construction property or occupation certificate in case of ready possession homes.
Stamp duty and registration
When the sale is executed your agreement needs to be registered with the sub-registrar within four months of execution and stamp duty needs to be paid as per market rates prescribed. The agreement should contain accurate details of your house such as flat number, floor, carpet/built-up area, amenities and purchase price. The floor plan should be attached to the agreement.
In many states the registered sale agreement works as the Sale Deed and so this is a very important document for your property functioning as proof of your ownership. In case of a resale property be sure to receive the original stamped receipt and conveyance deed.
Actual cost checklist
A lot more money is spent on other expenses while buying a house than the property’s value. Over the top costs could comprise up to 10-12% of your home value. Don’t forget to budget these.
Property sale agreement registration charge varies from state to state. Expect to pay approximately 1% in registration charge. Moreover, the sale deed has to be made on a stamp paper of value ranging from 5-7%.
Costs incurred on amenities such as common areas, elevators, parking areas, expenses for building repair, common electricity charges, non-occupancy charges, service charges and other miscellaneous charges are payable to the society. This is charged on a per flat basis, or on per sq ft basis and calculated at about 1% of the property cost per annum. In an under construction property the builder often collects this amount for a few years upfront and transfers it to the housing society when one is formed.
It is now quite common for builders to charge extra for parking space in the complex. Depending on the type of property and parking space provided this amount could range from Rs 2-6 lakhs.
On possession you’d want to spruce up the house to make it feel more like home. Interiors would have to be modified and furniture added as per your personal tastes. Assume a minimum 1% of the property cost for such enhancements.
Location, type of property checklist
Deciding on the location makes up a great deal of the property buying decision. You must also carefully consider the choices available, ie ready possession and under construction. This is especially relevant when the housing markets are in a boom phase.
Commute and convenience
Often in home buying, the idiom, you can’t have the cake and eat it too is applicable. You are compelled into trade-offs, especially if you’re a city dweller. Quite frequently the trade-off is between a spacious home within your budget in the outskirts or to settle for a smaller home within the city. In the former case you’d be compromising on travel time and perhaps even city life fun. In the latter you’re giving up on living space and probably greenery, quietness etc.
Under construction vs ready possession property
While you may bag a better deal on a property that is under construction as against a ready-to-move house, risks are greater in the former. You can typically expect 15-30% lower prices on properties still in the construction phase. And most builders will happily oblige to accommodate some custom requirements that do not include structural changes. On the flip side you might have to stay in rented accommodation until possession or miss out on rental income. Moreover there is a huge risk of delayed construction and builder defaulting on promises. Delayed possession ultimately also translates to more money lost in interest due to extended loan tenure.
Home affordability checklist
Now here’s the ultimate reality checklist, which everyone should go through before signing the dotted lines for buying real estate. Home buying decisions, many times, are more influenced by societal/family expectations than financial factors and can take emotional turns. Ponder over the following questions and if you answered favourably to all of them, hooray, your home buying is a prudent financial decision!
Can you afford the down payment easily?
By easily we mean you can shell out the down payment without touching savings meant for other goals. Additionally, your aim must be to pay more than the minimum bank requirement, which is ~ 20%. It is prudent to pay 40-50% of the home value in down payment and resort to borrowing only for the rest. You’ll end up saving a truckload of interest money.
Is the EMI burden too huge for a single income household?
A lot of urban households these days have double income. You’re planning to take a humongous loan flaunting the higher combined salary, just like the banks have advised. However, ideally you must not take a loan so big whose EMI cannot be paid with a single salary that also takes care of household expenses. Your spouse might need a pregnancy break or skip work a few years while raising the kid.
Are you hinged too much on sale profits?
While buying a house for investment purpose, great caution must be applied in estimating prospects of price appreciation. Take into account what point of the housing cycle are you currently in, if you are in a housing boom it is risky to assume the phase will continue a long period to come. Will your current lifestyle be affected in case there is a fall in property price?
Hope this comprehensive list serves as a useful guide to things to factor in before, during and after your property purchase. Happy buying!


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