Buying a home in India is a significant milestone and requires careful planning and research. Indian metros like Mumbai, Delhi, Bangalore, Chennai, Kolkata, and Hyderabad offer a plethora of options for home buyers. This blog provides a detailed roadmap to help you navigate the process of buying a home in India efficiently.
Financial Planning
Start by assessing your financial health. Your financial health involves different aspects of your personal finances, including your income, expenses, credit score, outstanding liabilities, budgets, assets, taxes, short-term and long-term goals, investment portfolios, emergency funds, etc. Evaluate your savings, income, and expenses to determine a realistic budget. Checking your credit score is crucial, as it impacts your loan eligibility and interest rates. Most banks, such as SBI, HDFC, and ICICI, prefer a credit score of 750 or above for favourable loan terms. In fact, it is a good idea to check your credit score regularly. Checking your credit score before applying for credit cards or loans helps ensure that your applications are approved quickly and easily. It is best to check your credit score a few months before applying for credit. In India, the bare minimum down payment for home loans usually starts at 10% of the property’s value. However, this can vary based on the factors mentioned above. Some lenders may require you to make a down payment of up to 20% or even 25% of the property value. Plan for a down payment, which is typically 20% of the property value. Setting aside funds for additional costs like registration fees, stamp duty (this fee is a legal requirement and is essential for initiating the process of registering the property under the buyer’s name. It serves as a financial commitment to the state government and ensures the legal transfer of ownership from the seller to the buyer), and interior work is also essential.
Research and Shortlisting
Research various localities based on factors like proximity to work, schools, hospitals, and public transport.
Popular residential areas in metros include:
- Mumbai: Bandra, Andheri, Powai
- Delhi: Saket, Dwarka, Vasant Kunj
- Bangalore: Indiranagar, Whitefield, Jayanagar
- Chennai: Anna Nagar, OMR, Velachery
- Kolkata: Salt Lake, New Town, Garia
- Hyderabad: Banjara Hills, Gachibowli, Hitech City
Consider cultural and social aspects like proximity to religious places and places of worship, cultural centres, or community gatherings. For many Indian homebuyers, the principles of Vastu Shastra, an ancient Indian system of architecture and design, are also important.
Site Visits and Property Selection
Browse real estate websites like MagicBricks, 99acres, and Housing.com for property listings. Contact real estate agents who can provide insights and arrange site visits. A site visit can help a buyer ascertain the genuineness of claims made by the developer. This is especially relevant for buyers planning to purchase a unit during pre-launch. Visiting the site can help such buyers ascertain the all-important land ownership. It allows you to see the property, the neighbourhood, and the amenities, and to understand the project’s overall concept and floor plans. During site visits, inspect the location, construction quality, and amenities. Compare properties based on price, location, size, and builder reputation. Don’t hesitate to negotiate the price and payment terms with the builder or seller to get the best deal.
Legal Due Diligence
Ensure the seller has a clear title to the property. Check the title papers in detail. A lawyer can be hired for this purpose. The presence of a clear title shows no disputes linked to the property. This involves verifying ownership and checking for any disputes. Obtain an encumbrance certificate from the sub-registrar’s office to check for any legal dues or mortgages on the property. If you prefer the online process, you can apply for an Encumbrance Certificate in Karnataka online. Verify that the property has all necessary approvals from local authorities, including building plan approval, environmental clearance, and occupancy certificate. Draft and sign a sale agreement, detailing the terms and conditions, payment schedule, and possession date. Hiring a property lawyer for due diligence and documentation is highly recommended to avoid legal issues later.
Home Loan Application
Choose a bank offering favourable interest rates and terms. Compare home loan options from banks like SBI, HDFC, and ICICI. Gather necessary documents like identity proof, address proof, income proof, and property documents. KYC documents like Aadhaar Card, PAN Card and Passport along with proof of age and signature are required for availing a Home Loan. Salaried applicants should provide salary slips and bank statements while self-employed individuals need to submit business stability proof and a business profile. Submit the loan application along with the required documents. The bank will verify the documents, assess the property, and approve the loan if everything is in order. Once approved, the loan amount is disbursed as per the payment schedule agreed upon with the builder or seller.
Registration and Possession
As per the law, property ownership can only be transferred through registration, and it is necessary to establish ownership to complete the registration process. Possession is necessary to establish ownership, and without possession, the buyer cannot register the flat. In most states in India, 5% to 7% of the total market value of the property is charged as stamp duty while 1% is charged as registration fee. Pay the stamp duty and registration fee, which is typically 5-7% of the property value. Register the property at the local sub-registrar’s office. Both the buyer and seller need to be present during registration. Obtain the registered sale deed, which is the final proof of ownership. Take possession of the property after ensuring all payments are complete and documents are in order. You may also get your Home Inspection conducted as one final check before you conclude the registration. This will ensure that you have got what you were promised and are paying for what you get.
Post-Purchase Activities
Apply for the mutation of property in your name at the local municipal office. To apply for property mutation, obtain the mutation application form from the local municipal office or land revenue department. Fill it with accurate details, attach the necessary documents, and submit it to the concerned authority. This process updates the property records to reflect the new ownership. Once you submit your application, along with the required documents, it might take the municipal body 15 to 30 days to update the record, after which it would issue a property mutation certificate to you. Arrange for electricity, water, and gas connections. Contact the respective utility service providers for this purpose. Plan and execute interior work and furnishing as per your preferences. If the property is part of an apartment complex, become a member of the apartment society or Resident Welfare Association (RWA). You are also encouraged to get an RWA HOTO Audit conversation started with the other members of the Association so that when the time comes your society as a whole when taken over is in perfect working condition.
Moving In
Schedule a date for moving in. Hire movers and packers for a hassle-free relocation. Pack your belongings carefully and transport them to your new home. Unpack, set up your home, and get to know your new neighbourhood. By and large, the cost of hiring packers and movers in India ranges from Rs. 4,000 to Rs 20,000 for local shifting. On average, the cost of intercity or interstate packers and movers will range from Rs. 10,000 to Rs. 60,000 depending on the size of the move and the distance.
Important Considerations
Ensure the project is registered under the Real Estate (Regulation and Development) Act (RERA) for added security. This registration ensures that the builder adheres to all regulatory requirements. Conduct a thorough home inspection to check for construction quality and any potential issues before finalising the purchase. Consider home insurance to protect your property against unforeseen events like natural disasters, theft, or fire.
To suit the varied needs of every individual customer, leading home insurance companies and banks in India offer a broad range of home insurance policies. These varied types of home insurance policies help customers to understand the necessity of home insurance and choose the right policy according to their requirements. Standard Fire and Special Perils Policy, Home Structure/Building Insurance, Public Liability Coverage, Personal Accident, Burglary & Theft, Contents Insurance, Tenants’ Insurance, Landlords’ Insurance
Buying a home in any Indian metro involves several steps, from financial planning to moving in. By following this detailed guide, you can make informed decisions and ensure a smooth experience when buying a home in India. Happy house hunting!
Additional Information
Owning a home in India is often seen as a symbol of security, status, and achievement. It’s not just about having a roof over your head; it’s about building a future for your family and creating a space where you can thrive. In many Indian households, buying a home in India is a collective decision. Involving family members and seeking their input during the home buying process is crucial. It ensures that everyone’s needs and preferences are considered, making the new house a true home for all.
Common Challenges
Dealing with brokers can sometimes be challenging due to the prevalence of black money in some real estate transactions. It’s important to deal with reputable brokers and insist on transparent transactions. Navigating the complex paperwork and bureaucratic processes involved in property registration and utility connections can also be daunting. Having a reliable real estate agent or legal advisor can make this process smoother.
Regional Insights
Each Indian metro has its unique real estate market characteristics. Here are some insights:
- Mumbai: Known for its sky-high property prices, buyers often prefer smaller apartments in prime locations.
- Delhi: Offers a mix of luxury and affordable housing, with a preference for spacious homes.
- Bangalore: IT hub with high demand for properties near tech parks.
- Chennai: Growing demand for properties along OMR due to IT companies.
- Kolkata: Affordable housing with emerging hotspots in New Town and Rajarhat.
- Hyderabad: Increasing demand in areas like Gachibowli and Hitech City due to IT boom.
Practical Tips
- Negotiation: Always negotiate with builders to get the best deal.
- Cash Flow Management: Plan your finances to manage cash flow during the construction phase.
Government Schemes: Explore government schemes and tax benefits available for home buyers.
Disclaimer:
We provide expert engineering consulting services, it is important to consult with qualified legal and financial professionals before making any home buying decisions. The information provided in this blog is for reference purposes only and should not be considered as professional legal or financial advice.
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