Some tips for first time home buyers include the following:
Leverage the Digital Medium-:
i) Google!- The first step in the home purchase process for over 80% of buyers is through a Search Engine!
ii) Property listing Portals – Through property listing websites buyers can get a complete sense of the properties that are available in their preferred areas. It is a great comparison medium for home purchasers.
iii) Blogs, Articles, Communities and Forums– are great educational tools for home purchasers not just to understand the home purchase process and the documentations required, but also to assess the credibility of developers developments.
There are a number of active blogs that inform buyers about the trends in the sector, the infrastructure development in their preferred areas, the key terms terminologies in the sector, the home purchase process and home loan process, as well as documents that they should ensure are in place before making the purchase decision.
iv) Developer websites, social media pages and reviews– During the pre-selection process, home buyers can take advantage of the property details outlined on developer websites, get a sense of the properties on display through their virtual galleries and chat/speak to their agents without having to make an actual visit.
It is essential that buyers completely research the developers prior to making the purchase decision. The social media and review pages are particularly important for home purchasers as they are likely to see real-time comments from previous customers.
Twitter and Facebook reviews are great tools for buyers to be able to assess the credibility of developers and developments.
2. Do your own diligence-:
With increased access to information through the digital medium, buyers should ensure that they do their own diligence on properties. Buyers should also make sure that they take their time to understand all the dynamics of the property transaction.
i) Buyers, especially of under-construction properties should do a thorough due diligence on the builder developer. It is recommended that buyers make purchases from known builders with a good market reputation and a track record of successful completions.
ii) It is essential that buyers familiarize themselves with the basic documentation involved in a real estate transaction.
iii) Buyers should do their own basic market research. Prior to purchasing a property, buyers should understand the growth potential of the area, look at the area’s connectivity via road rail, ensure basic amenities (running water, 24/7 electricity) are in place; ensure close proximity to important commercial areas, educational institutes, hospitals and easy accessibility to key entertainment hubs (grocery stores, malls, cinemas)
3. Understand Your own Requirements and be Clear about your Budget-:
i) Buyers must have a clear list of requirements (family size and requirement) and a pre-determined budget prior to beginning the search process. This is recommended to prevent getting lured in by over-budget properties with increased amenities.
Remember amenities tend to inflate the cost of properties and result in increased ongoing monthly maintenance charges.
ii) It is recommended that buyers carefully evaluate the financing options available to them and ideally have their EMI outflow of no more than 35% of their net monthly income.
If buyers are selling one property to purchase the other, they need to be mindful of the implications of the capital gains tax.
4. Appoint a Credible Facilitator/broker to Assist you with the Home Buying Process -:
While property portals give buyers a number of options by region development, buyers can also engage a broker/facilitator to assist them with the purchase process.
i) For buyers who look to appoint brokers facilitators, it is essential that they do a complete reference check of the broker, focus on appointing qualified brokers, ensure that there is fee transparency in their dealings, as well as go with referrals/trusted names of brokers/facilitators.
ii) Under the draft RERA for Maharashtra, Developers will be obligated to disclose the names of brokers/agents for their developments. Hence, it is important that buyers refer to the developer websites to ensure that they are a registered broker for that property.
5. Understand RERA for Buyers-:
The new regulations that have been implemented require developers to make a number of disclosures about their developments to home buyers. It is essential that buyers familiarize themselves with the key RERA stipulations that work in their favor.
Additionally, under the draft RERA, there are a number of obligatory disclosures that the developer must make on their website such as the details of the enterprise promoter, authenticated copy of approvals and the commencement certificate, location details of the project with a clear demarcation of the land, details of key people supporting firms concerned with the development, the details of the real estate agents registered, among others.
6. Appoint a Lawyer-:
Despite real estate a home being one of the largest investment decisions a person makes in their lifetime, people have often shied away from investing in qualified lawyers or other key professionals during the home buying process.
It is important that home buyers get contracts agreements and all other details verified by qualified professionals as it ensures greater protection for the purchaser. Long-term security is of paramount importance, especially when making such a large investment decision.