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DESCRIPTIONThe home buying process can be one of the most exciting, but sometimes also stressful, experiences you ever go through. This may be true whether you’ve bought many homes or you’re looking to buy your first, whether you’re in the market for a new primary residence or an investment property.
Buyers GuideHome Buyer’s Guide
The home buying process can be one of the most exciting, but sometimes also stressful, experiences you ever go through. This may be true whether you’ve bought many homes or you’re looking to buy your first, whether you’re in the market for a new primary residence or an investment property.
There are many factors to consider and many decisions to make. That’s why, when buying, it’s crucial for you to have all the available resources necessary to make a well-informed decision, together with the time required to make complete use of them. That’s also why you should enlist the help of a trusted realtor who’ll be able to provide you with expert consultation at each step of the buying process.
HOME SWEET HOME• Buying your own home sounds so good. It is actually a dream
of each and every Indian. But it need not be a dream anymore.
• Nowadays home financing and real estate agencies have made home buying very simple.
• The RE/MAX Home Buyer’s Guide has been made to ensure that you buy the best and make the most of your resources.
How big a house do I need?
What kind of house do I need?
Which is the right locality for me?
What do I look for in the neighborhood?
How much do amenities matter to me?
How much is affordable?
What are my lifestyle requirements?
What about resale value?
How big a house do I need? The size of the house is based on individual needs. This
depends on preference, number of individuals in the family, personal requirements and so on.
Once you decide the approximate size of the house, translate them in terms of built-up, carpet area and the new concept of super built-up areas. Carpet area is simply 75 per cent to 85 per cent of super built-up area. That means if the super built-up area is 1,000 square feet, the carpet area would be around 750 square feet to 850 square feet.
Size of the home you need
What kind of house do I need?• There are so many choices. Right from apartments,
houses, plots, builder’s flats, service apartments, farm houses and so on.
• The choice you make would depend on budget, locality and personal preference.
• Most people tend to prefer multistory apartments due to the convenience they provide in terms of safety, amenities, community life, etc.
Types of properties
Which is the right locality for me?Location is of prime importance while choosing a property. There are mainly
two points to consider while trying out locations.
1. Price factor: The strategic placement of any property decides the pricing too. For example, if a property is in a prime location then one can expect it to be higher priced than a similar property in a non-priority zone.
2. Convenience: While deciding the location keep a few things in mind. • The location should be within approved/sanctioned master plan.• The location should have good connectivity.• Infrastructure services such as power, water supply, drainage and
sewerage should be present. Location should be within an active business activity such as educational institutions, hospitals, IT parks, entertainment hubs, etc.
• Location should be accessible easily from your workplace.
What do I look for in the neighbourhood?
• Amenities: This includes local facilities like parks, clubs, swimming pool, hobby classes, walking area.
• Shopping centre in the vicinity will make your life more comfortable.
• Transportation: This is of prime importance if you are going to use public transport like buses or trains. Selecting the perfect house that lacks good connectivity will make it difficult for you or your family to commute to work.
• Schools: If you have children you might want to live in a neighbourhood which has good schools so that commuting time is less for them.
• Road Systems: Good road systems are a must for you to commute easily. They stand less chances of water logging during rainy season.
What to avoid in the neighbourhood?
• Restaurants: This may attract a lot of unwanted crowd and cause traffic problems.
• Train tracks: The train may look and sound exciting in the beginning hut soon the noise will be too much to handle and disturb your regular routine, including your sleep.
• Airport: The noise made by planes can be very unpleasant and one never gets used to the whirring sound in the middle of the night.
• Hospitals: Initially having a medical centre in the vicinity may seem to be a good idea but be prepared to handle the middle of the night noise.
• Sewage: Smelly sewage can be a nightmare and cause diseases too.
• Noisy neighbours: This may be difficult to discern but if you find out more about your neighbours it would definitely make your stay more pleasant.
How much do amenities matter to me?
Many societies have their own amenities. If you are buying a flat in a multistory apartment or a bungalow in a society, there are some common amenities that may be available. You need to decide which are important for you as many amenities are chargeable.
• Common garden • Children play area• Basketball/tennis courts• Swimming pool• Activity Room• Club House• Gymnasium• Elder’s Area• Library
• Cinema Hall
• Pipe gas supply in each apartment
• Auto door elevators
• Secured and gated community
• Jogging track
• Student pick up area
• Skating rink
• Security system with intercom facility
• Landscape garden
• Children’s playground
• Party lawn
• Essential shopping
• Ample visitor parking
• Basket Ball ring
• Decorative street lights
• Sit-outs for senior cities
• Garbage chute
• Open Air Yoga space
• Intercom system
•Entrance gate with security cabin
•Internal cement concrete road
•Rain water harvesting
How much is affordable?
What is my price range?Your price range for the home you want to buy depends on –• Your income• Home loans you are entitled to• Other debts/loan• Cash available for down payment• Monthly installments you can afford• Taxes• Interest
What are my lifestyle requirements?
•How many rooms do you require?
•May be separate rooms for your children.
•For your parents
What about resale value? Resale value of your home does matter as in the long run you
may want to sell it and move to a different place. For those who are buying with investment on their minds this is a decisive factor. Some factors that decide your homes’ resale value are-
• Location • Age of property• Layout of the house/apartment• Amenities in the neighbourhood• Amenities in the society
How much to pay? Budget plays an important
role. You need to shell out money for-
• down payment • monthly installments• interest• taxes • insurance
Budget Factors• Value of your existing property which you plan to sell to buy a
• Available cash, short term investments for purchase of property
• Home loan limit you have based on your credit
• Home loan may differ in a bungalow and a flat. So clarify while you consider.
•Get clarity on the time when the funds you are expected to have will be available
•Consider the budget for interior works or renovation
•Ensure that you can pay the EMI for the home loan
• Don’t invest all of your liquid money in your home.
• Don’t invest more than you require: you can never sell 2 bedrooms of your home incase you don’t need them.
• • Don’t wait till the last minute to liquidate all the assets
(value may fall)
Search for options
The most important aspect of buying an home is to search for as many options you have in your
Steps for searching maximum options
• Contact a RE/MAX® Agent: RE/MAX agent provides options from entire RE/MAX network which is spread in 91 countries.
• Contact Brokers in those areas which you are interested. They may be unprofessional so deal with reference brokers only.
• Search online: use Google, Magic Bricks and other online portals.
• Scan classifieds every week.
• See as many properties which match your criteria.
Evaluate the options
• Once you have a list of the options available to you, evaluate based on what you need rather than what is available.
• There may be a feature available in the property for which you have no need but indirectly you are paying for it. For example : swimming pool.
• What is the age of the people who will be living in the flat? If they are old, you might want to choose a flat that is on the ground floor or first floor.
• If the flat is on a high floor, is there a lift service available in the building ?
• Does the lift service have a generator backup?
• If you choose a flat on the first or ground floor, you must consider the possibility of water logging affecting the area.
• How are the flats in the society arranged? Is there privacy or can everyone look into your house?
• When people are talking in the flat next to yours, can you hear it in your flat? This would mean that your conversations too will not be private!
• How are the windows of the flat arranged? Does enough sunlight come into the house?
• What are the amenities the society is providing?
• Are there too many corridors in the apartment? You will be paying on basis of super built up area. Corridors eat up room-area.
• Ideally, there should be at least one common toilet so that the visitors do not have to enter your bedroom to use your bathroom.
• The kitchen, dining room and entrance should be close to each other. This ensures easy serving of food to guests etc. Ideally, the building design should include “curtain walling”.
• Check for“seepage” problems!
• Check the heights of railings, distance between each railing etc. for safety of children.
• Try to draw the furniture on the ground and see how much space is left free. Is the house too cluttered?
Quality and design for new construction
Let the following points guide you
•You need to check up on the reputation of the “promoter”, “contractor” and “architect” of the construction. Visit other projects done by them.
•You must ask for a 'performance guarantee' clause or at least a 'structural liability' clause in the sale agreement. This will ensure that the builder remains liable for any defect in the building for at least one to three years from the day he hands over possession to you.
•Check the dimensions of bedrooms. Sometimes there is no space in the bedroom to move after a normal double bed is placed inside the room. You may see how you will place TV in the room which you wish to enjoy with family.
•Some people believe inVaastu compliance. It is advisable to ensure that the house is according to Vaastu, which may help you even resale your house to someone who requires Vaastu compliance.
What is a “Super built-up Area”?
• Built up Area is the carpet area plus the thickness of outer walls and the balcony.
• Carpet Area is the area enclosed within the walls, actual area to lay the carpet. This area does not include the thickness of the inner walls. It is the actual used area of an apartment/office unit/showroom etc.
• Super Built Up Area is the built up area plus proportionate area of common areas such as the lobby, lifts shaft, stairs, etc. The plinth area along with a share of all common areas proportionately divided amongst all unit owners makes up the Super Built-up area. Sometimes it may also include the common areas such, swimming pool, garden, clubhouse, etc. This term is therefore only applicable in the case of multi-dwelling units.
Clear Title of the Property • Free and clear title to a property implies clean ownership of seller, which
can be transferred to the purchaser.
• It is a transfer without any encumbrance, charge, and lien. It is generally used to refer for a property free of mortgage debt or any other conditions applicable for the transfer, if any.
• In order to obtain a clear title, it is usually necessary to have a title search performed by an Advocate, Solicitor, or any legal person with the verification of last 30 (thirty) years' record of transactions, if any for the said property.
• The basic purpose of title search is to verify the ownership, authority and capacity of the seller.
• The documents executed in last 30 years, if any are to be verified with Government records i.e., Revenue records, Property Tax records, Government Approval records.
• The buyer should verify the Title Certificate issued, by a legal person and to verify any subjective term or any legal dispute is stated in such Title Certificate.
• Any person who acquires any ownership right through allotment letter then such person has to verify the ownership record of the society and procedure of the allotment should be complied under the local Act of the Co-operative Act, or if the share certificate is issued under Indian Companies Act with occupancy right of premises, then in such case compliance with The Indian Companies Act is necessary. The ownership of the society can be verified on a similar basis as stated herein.
Basic documents to be verified • Owner's name in Property Card
• Chain document with owner's name in property card
• 7/12 extract
• Mutation entry record of 30 years
• Owner's name in Approved plan, IOD, CC
• Tax Payment Receipt of Property Tax, NA Tax
• If any document is executed by POA holder, then the registered POA documents should be insisted.
The Developer's Track Record • The track record of the Real Estate Developers is a measure of their past
track record in executing real estate projects and their organizational and financial risk profiles.
• It is not a rating of developer's credit quality. Developers' track record is analyzed with reference to their track record of legal compliance, types of projects undertaken, adherence to construction schedules, quality of construction in executed projects, and market perception about the developer.
• One should prefer such a developer whose past track record in executing real estate projects as per specified quality levels and transferring clear title within stipulated time schedule is excellent.
• The developer complying with all the amenities stated in the literature and conveying the property in favor of the society within six months of possession must be given preference.
Terms and Conditions of Sale Agreement
• Legally, a real estate sales agreement is a contract between both the buyer and the seller.
• This document stipulates the requirement of disclosure by the developer under MOFA or under any local Act.
• It covers all the conditions of the sale, like the technical details of the property, revenue records, ownership records, consideration, terms of payment, interest payment on default, conditions for termination or cancellation of agreement.
• It contains the various deposits required to be made by the purchaser and also the date of possession, IOD, CC, Title Certificate, and Approval under any other local laws such as Development Control Regulation and Regional Town Planning Act.
• The person who is doing the booking of the homes under construction should take care about all the terms and conditions stated in the agreement.
• The real estate sales agreement is considered valid once both parries affix their respective signatures.
• It is recommended to get the document registered before the Joint Sub-Registrar of Assurance of the local area where the property is situated.
Stamp Duty: FAQs
Q. What is stamp duty?
A. It is tax, similar to sales tax and income-tax collected by the Government, and must be paid in full and on time. If there is delay in payment, it attracts penalty. A stamp duty paid instrument/document is considered a proper and legal instrument/document and such gets evidentiary value and is admitted as evidence in courts. Instruments/documents not properly stamped are not admitted as evidence by the court.
Q. When the stamp duty is payable?
A. It is payable before execution of the document or on the day of execution of document or on the next working day of executing such a document. However nowadays banks are not permitting franking on executed documents. The execution of the document means putting signature on the instrument by the person's party to the document. Any instrument executed outside a state is liable to duty only on receipt of such instrument in the state, provided it relates to a property situated in the state, or a matter or thing to be done in the State.
Q. Is stamp duty payable on all instruments/documents relating to the transfer of immovable property?
A. The stamp duty is attracted on all the documents wherein transfer of the property has taken place except transfer by will (or by original nomination in a co-operative housing society). All transfer instruments/documents including (a) Agreements to sell (b) Conveyance deed (c) Gift deed (d) Mortgage deed (e) Exchange deed (f) Deed of partition (g) Power of attorneys (h) Leave and license agreement (i) Agreement of tenancy and (j) Lease deeds have to be properly stamped before registration.
• However there is a different rate/slab of duty depending on type of document. It is clarified that when a nominee transfers the flat subsequently in the name of the legal heirs, that transfer instrument is to be stamped as per the rate applicable to Renounce Deed, if other legal heirs are not claiming any Right and Interest in such property.
• When buying or selling a property it is optional to register the documents. However, it has certain advantages. It ensures legal transfer and ownership of property. Registration acts as a proof for transaction.
Q. What is Registration of Property Documents?
A. Registration is the process of recording a copy of a document, transferring the title in immovable property to the office of the Registrar.
Registration acts as proof that a transaction has taken place. The registration of a document serves as a notice of the transaction, to the persons affected by the transaction.
Registration also serves as an implied notice to any person subsequently acquiring interest in the property, covered by the registered document.
Registration is done after the parties execute the document.
The agreement should be registered with the Sub-Registrar of Assurance under the provisions of the Indian Registration Act, 1908 within four months from the date of execution of the document. http://www.remax-mgm.com/
Q. What are the papers/requirements at the time of registration of documents? Please give full details. A. A document should be adequately stamped as per the Stamp Duty Ready Reckoner so as to confirm that proper stamp duty has been paid. The Stamp Duty Ready Reckoner is a public document and is available for inspection at a Sub-Registrar's office.
For registering documents of property, one should go the respective registration office along with the original document and one photocopy.
The document must be printed or typed on one side only and in black colour. A photocopy should be taken on only one side of the paper and the paper should be of 90 GSM thickness. There should be butter paper between the two sheets of the photocopy.
• When your building or apartment is provided with all amenities, size of rooms as per approved plan and you have checked all other specifications of your apartment, it is time for taking possession of your flat or home.
• While taking possession of flat or home, ensure that you have received all documents from the builder. Possession letter, Blue print, No Objection Certificate, Development agreement, Power of Attorney, Commencement Certificate, Search Report of the Builder's Advocate, Receipts of payments made to the builder, Letter of allotment etc. are some of important documents required from builder or developer on possession of apartment. These are the most important documents which one should have as a proof of the ownership of any immovable property or house/flat etc. as the case maybe.
Conveyance of the property: FAQs
Q. What is a conveyance deed?
A. A conveyance deed is a document that conveys the title of ownership of a property from the original owner to the ultimate purchaser. All the flat owners must obtain conveyance deed for their structures, to become true owners of the entire structure and land attached to it.
Q. What is the objective behind obtaining a conveyance deed?
A. The first and foremost objective is to become the legal owners of the entire property. Obtaining free and marketable title of the property is the most important objective. When a particular person or society has paid full consideration and is in possession of the property but the title documents are in the name of the original owner (developer or landowner), the purchaser does not have a free and marketable title of the said property. It is only after executing the conveyance and recording the same with the revenue authority that the buyers derive free and marketable title over the property.
Q. What are the advantages of conveyance?
A. Conveyance gives the proper title, helps in retaining additional FSI, if any, makes the property free and marketable. Helps in raising loan by mortgage, helps in obtaining permission for reconstruction, and permission to construct additional floor/s by TDR, enables in receiving compensation on development.
PROPERTY BUYING: FAQS
Q. What are all the important documents one should check before buying any flat?
A. If you want to purchase a property, you have to look at the approved layout plan, approved building plan, ownership documents, allotment letter, commence certificate, occupation certificate, no objection certificate from the builder or the society, and carryout a physical inspection of the property. Check that previous dues such as property tax, society, water and electric bills, telephone bills, and any other etc., have been cleared till the time of sale. Ask to see the last tax payment receipt. Always take possession letter from the builder or seller at the time of possession. When you pay the full payment to the seller/builder take the Receipt for full and final payment.
Q. How to verify the authenticity of the various documents submitted by the seller of the house, particularly with regard to the possibility that the house has not been sold earlier to a third party?
A. Regarding authenticity of documents, again, you have to take the help of a legal consultant to verify or take search of the property with the Registrar of Document, Revenue Official, and NOC from the society or from Builder/Developer.