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Know these things before buying plot or house
Lakhs of rupees have to be shelled down, to buy a house or a plot. Even in remote areas, buying of property involves heavy expenditure. Hence, it is always essential to think twice before buying a piece of property. Reviewing many related aspects and taking expert advice are a must.
Normally people approach a real estate agent or company, before buying a plot or house. Agents, builders and reality developers are masters in attracting customers. They have a way with words and manage to lure customers by showing them ordinary property and describe it as heaven on earth. Question the agents and learn the truths before deciding to buy any property.
Will the rates not decline?Agents will try to push of any property saying that the rates will never come down and you can buy it blindly. Some friends keep making such suggestions due to their own experience in buying a plot or house. It may have been true in their case. How can you say that it will be true in your case as well? Real Estate too is like any other investment. There will be ups and downs. However, real estate prices are not subject to inflation rates like stock market or bullion market. Reality prices come down in some areas. In others, they remain the same for years together. In some areas they rise very quickly. So it not exactly true that the prices of real estate will never come down.
Don't choose a far off place
Do not go in for property in remote areas, away from townships, just because the prices are low. Take care to see that the property you are buying is close to your place of work. Otherwise, you will have to travel long distances to work, which is waste of expenditure on fuel as well as time consuming. Also, if you have to go shopping or to a theater, you will need to travel to the town or city.
Decrease in rates
In some areas the price of property comes down. So before buying, know about the prices in the area. The agents or companies might evade by saying that the prices have not come down. They will try to lure you by stating that the house might fetch you good rent. Only those who want to earn rents on property can examine these facts. Do not believe the builder blindly. Find out about the rental value of the place before deciding.
How factual are newspaper ads?You might have come across newspaper ads which quote the price per sq.ft. Let us say a double bedroom house costs Rs. 42 lakh in a particular area, in an ad. When inspected, the actual price might work out to be Rs. 50 lakh. There will be additional costs. These might include, parking, club membership, fee for choosing a particular location etc. When questioned about the price, the agent might show you the corner plot in the venture. The brochures mention something called 'Super built-up area.' Steps and common area in front of the house are included in this. Super built-up area is 30 per cent of carpet area. For example, if the total area of a 2-bedroom flat is quoted as 1,000 sq.ft., living area is just 700-750 sq.ft. The upcoming projects in the area have to be estimated.
Blind purchase will create problems
If you are coming back because you did not like any of the deals, the builder might still try his luck, saying that almost all plots are sold, and very few are left. However, do not fall for these words.
Model house is different from realThe sample plot or model house that is shown by the company might not be the same. The model is built very carefully by the builder, employing expert, skilled workers, arranging everything in the right place. This is very attractive to look at. It is well furnished, with shining tiles, cupboards and expensive pump sets. This is only to attract buyers. After booking, when the flat is handed over, it is minus all the interiors. The document that the builder gives, will have details of the architectural drawings, carpet area etc.
Make sure beforehand if the builder is compensating in case construction is delayed. They might include some conditions like they are not responsible if the delay is caused due to reasons not under their control. Do not trust the builder's words that you may cancel the booking anytime and take back your deposit. Because all builders and companies are not economically stable. Once you make the down payment, you are totally at the mercy of the builder. There is no rule that once the booking is cancelled, you must get back your amount. Some take a cut of 10 to 20 per cent from the deposit and repay the remaining. If it is a small time builder, you will have to forget about your deposit.
The builders also blackmail the customers in to booking the plot, stating that registration fee will be waived, exclusive modular kitchen will be built or car will be gifted. Actually, the cost of these free offers are included in the selling price. Some builders tie-up with certain banks, for easy loan facility. Do not go by the bank or the rate of interest. First-time buyers are not aware of many such things. So they should learn about all these things, before buying.
- Location: Buy reasonably priced property, close to the present city you are living in. Check to see that the place is not very far off. If it is closer, you can save on transport. The price too appreciates sooner.
- Rental value: Check out the rental value of houses in the area, where you plan to buy a house or plot. Those who wish to gain on investments, must definitely check this out. Rental value is high in well-populated areas.
- Avoid crowded places: Several cities are crowded. You can buy commercial property in such areas, where the traffic is thick and sounds of vehicles are high pitched. But it is not advisable for residential purpose.
- Builder history: If the builder from whom you are buying a plot or a house is reputed, you can trust him and purchase with full confidence. A reliable builder will have a good track record of sound projects, completing them on time, and will not be involved in disputes.
- All permissions granted: It is essential to check all documents thoroughly before purchase of plot or house. Copies of municipal permission and layout designs have to kept ready. Sometimes builders keep changing the plans that have already been sanctioned by the municipal authorities. This is not legal. Also check whether permission has been granted for beginning the works. Whether environment permission has been granted, has the builder bought the house and then began construction, or has he taken just the right to develop the area, etc., points should be checked.
- Legal advice: Before buying property, legal advice should be taken and an agreement has to be made with the seller. One should go ahead only if there are no disputes regarding that particular property. Take the advice of a lawyer, by showing him the title deed. If you are purchasing property that is being resold, check to see it is mortgaged or used as guarantee for taking loans. An Encumbrance certificate has to be taken.
- Resale value: Any piece of property is purchased should have all the features that would help in reselling it. Many have a set budget, within which they buy the property. The location should be good, along with good features, for property to have resale value. Another plus point is connectivity. Transport facility should be good, between the original place to the place where new property is being acquired. If the house or plot is close to railway station, bus station or airport, it will fetch a good price. If it is close-by to hospitals, schools, banks, shops, restaurants, theaters etc., there is a chance of the cost escalating and rental value increasing.
- Loan eligibility: If you have the budget to buy the property, there is nothing like it. Otherwise you will have to take a loan. However, you have to check whether you are eligible for the loan or not. For loans, many things are taken in to consideration like, repaying capacity, earning capacity, already availed loans, age, etc. Financial agencies usually place loan eligibility calculator application online. Through this you can check to see your loan eligibility. Qualifications and the amount of loan depends on the banks.
- Many charges: Agent or brokers commission, processing fee for loans, architecture estimation charges, lawyer or notary charges, are all related to buying of property. Maintenance and repair charges after buying the house has to be taken in to account.
Commercial Property- Write down the pros and cons of buying commercial property. Then only will you realise if the commercial property that you want to buy is really useful or not. Exemption on real estate taxes and insurance premiums will be obtained. At the same time, there might be liquidity problems in buying commercial property. Maintenance and repair charges have to be made.
- It is always useful to give out commercial property for rent, rather than keep it idle. It is financially fetching. Expert advice should be obtained. Broker, lawyer or certified lawyer can help in purchasing the property. They will be able to estimate the value of the property correctly and suggest what precautions to take during signing of deals and documents.
- There should be scope for extension.
- There should be no disputes regarding the property, as they will affect the business.
