Buying property is one of the biggest decisions of a lifetime. However, growing property prices, lack of money, refusal of home loan, and the title of the property are a few challenges that come across when you decide to purchase your dream home. In order to reduce the challenges and to help you in the house hunting process here is 10 point checklist before buying property. This checklist will surely help you save time, money, and energy.
10 Point checklist before buying property
- Property fitment in your budget
The first step towards buying property is deciding your budget. Along with the budget, you need to decide property type. Once you are through with that decide whether you will need a home loan or not. Mostly bank or home financing companies will finance up to 85% cost of the property. The balance of money you need to arrange on your own.
- The ratio of black money and white money
The second thing you need to check is the ratio of black money and white money. Although it is illegal to deal in black money. However, in a majority of states dealing black money while buying a property is quite common. You need to prepare yourself for dealing with black money.
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- Your Credit score and chance of getting a Home loan
The third thing you need to check is your CIBIL score. Your CIBIL credit score decides your chance of getting a home loan. You can get your free credit score online on the CIBIL site. A higher credit score means a better chance of getting a home loan.
- Pre-approved Home Loan
It is advisable to take approval of a home loan in advance. A pre-approved home loan will help you in deciding your budget. It will also give an idea about EMI payable for the loan amount. You can also save time and last-minute hassle of applying for a home loan.
- Tax exemption and your fitment
You should also ensure that what type of tax benefits are expected in case you opt for a home loan. There is a tax exemption of Rs.2 Lakh under section 24 for interest on home loans. You will also get tax exemption up to Rs.1.5 Lakh under section 80 C for principal repayment. Make sure to structure your EMI in such a way that you are able to make the best of these provisions.
- Location and Amenities of the property
It seems to be very basic, however, a bit of focus on this can surely help you in the future. You should ensure that basic requirements like grocery, vegetable, and household are in the close vicinity of the property. It is advisable to select a property near a bus stop or railway station, it will help you to save money on transportation. Also check basic amenities like water supply, sewerage, electricity, etc.
- Rental Value and Resale potential of the property
When you buy property, you should also evaluate property from the investment perspective. Two things you need to consider the rental value of property in the area and the resale potential and value of the property. This will help you when you decide to move away from the property.
- Know the actual cost of the property
Before entering into a buying agreement of property you should know the actual cost of the property. You should sum up the extra cost which you incurred on the property. This includes registration costs of about 1% of property value, stamp duty costs, estate agent fees, advocate fees, and any other additional charges imposed by the builder.
- Check for Title and other papers
This is the most important point. You must ensure that the title deeds of the property are clear. You can verify these documents with the help of an advocate or sub-registrar office. You must ensure that there is no pending legal case, property dispute, or lien on the property. In addition to this also check the plan clearance certificate/approval of construction from the municipality. Once you make the initial payment make sure to take the “Agreement of Sale” from the seller/builder.
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- Future cost of property
You should take possession of the property as soon as the sale deed is executed and registered. You should demand an Occupancy certificate and share certificate (allotment letter). Before buying a property you should also consider the future cost of the property which includes monthly maintenance costs and municipality tax.
I hope the above checklist will help you when you decide to buy your property. In addition to the above make sure to compare properties and estate agents before taking any buying decision. Make sure to compare and negotiate with the bank to get the best home loan offer.
