Choosing your house

(TOI article)

Home signifies comfort, security and peace so we strive for owning a house but buying an immovable property is a lifetime challenge because of a combination of factors. Meticulous planning at the investment stage can save us from sleepless nights later. Buying your very first home can be a daunting task considering the commitments required. But you are not alone. There are lakhs of first time buyers who had stood in your shoes and had taken the very same steps which you are going to take. The path is well trodden so the probability of getting lost is rather low. All you have to do is to take one step at a time. Before you take a decision, please gather your thoughts. Get down to specifics work out an elimination process based on your preferences. This sounds easier than it is. However, eventually with your property agent's assistance you should be able to get a short list of prospects.

Budget

Before you do any legwork you must ask yourself, "how much can I spend?" Depending on your requirement and number of family members, you can decide on the living area and number of rooms, also depending on your preference and pocket you can decide between a flat and an independent house.

Flats have certain advantages like sharing of land cost, security and other common facilities cost, which can be divided among the members. On the other hand, you have the advantage of modifying or constructing an independent house. Figure out how much money you are willing to spend on the house. Most of us would need to supplement with a loan.

Calculate your income level and living expenses. Take into account your future considerations such as children, add-ons, amenities, fix-ups, rising income levels and so on. Also, budget for some exigencies.

You can use this simple formula: Income minus cost of present lifestyle equals potential mortgage payment.

Your home is certainly worth sacrificing a few spending habits but not worth mortgaging your entire future. It is advisable that when you set a budget for buying a property, you reduce it by 20-25 per cent. Typically, agents will show you the properties, which are on outer limits of your budget and temptation to overshoot, can be high, but please remember that there will be many leakages from your kitty along the way. There can be hidden costs and some unplanned expenses like cost for furnishing the house, some minor repairs.

So, it is a good idea to work with a price lower than your limit because ultimate costs invariably tend to overshoot our estimates. Once you are clear as to what you can afford, you can start visiting the prospective homes for evaluating them in detail.

Property inspection

It is advisable not to take an emotional decision but let your head rule over your heart. Inspect the prospective properties thoroughly, at different times, everything from floor to wall, from light switches to flushes, windows and doors, locks and taps. Look out for any leak in the water supply by turning the water mains on. Imagine the property as it might look when furnished. Typically, a vacant house looks spacious than it is, when furnished. Take the measurement of your furniture and compare it with dimensions of rooms in the prospective property, otherwise you may have to redo your furniture. See at least 8-10 properties before you make a final decision. After perusing a property, it is advisable to write down on piece of paper, how many of your needs the house fulfills and also decides if the neighbourhood and surroundings is right for you. Start the elimination process. After you short list the property, it is advisable to check these points. Although this list is not exhaustive, it will help you in making the right decision.

Please scrutinise all original documents. The title of the property may be in single or joint ownership basis. In case of any difficulty in getting the papers, a certified copy can be obtained from the local sub registrar's office on payment of a nominal fee.

Refer the documents to a lawyer who can certify the clear title.

Obtain 'No encumbrance certificate' for the past 13 years to ensure that no mortgage has existed on the property. This will also enable you to ensure that the title belongs to the rightful owner who is the seller.

In case of sale by a third party, please check whether the third party is absolute owner or holds a power of attorney.

Obtain the required clearances.

Please check if the price quoted is in line with the prevailing market rate. You can take the help of consultants.

See the approved plan.

Registration and agreement

It is always advisable to register the document(s) at the time of purchasing the immovable property. In some cases it is compulsory to register the document(s). Even in cases where it is not compulsory to register the document(s), registration of document(s) is advisable because:

The title gets secured.

If you are looking forward for taking the loan in future from banks or other financial institutions they will insist on the registered document(s).

If you propose to register the documents later, there is a possibility of the seller not co-operating with you in signing the deed.

The certified original copy of the document(s) can be taken from the registering authority after completion of formalities.

Generally, the registering authorities insist upon the following information before registration - ward, village, taluk, number of floors, and built-up area.

The registering authorities insist that the area must be mentioned as built-up area. Common area is the area used by all persons in the building that includes corridors, steps etc. It is divided among all the owners in proportion to the size of their flats. Carpet area is actual area available for living that excludes the wall thickness. Plinth area is carpet area plus wall thickness. Built-up area is plinth area plus common area, that is, carpet area plus wall thickness plus common area.