With no loans to repay and a not-too-high retirement goal, bank executive Samir and his schoolteacher wife, Aruna was saving enough to support their child’s education and marriage while setting up a decent retirement plan. However, there was one thing that threatened to derail the familyâ€™s financial plan â€” home buying. Having spent most years in rented apartments, the family always wanted a home they could call their own. But were they equipped with the knowledge required to make the largest financial commitment of their life? In other words, do they know what to look for when buying a new home in Kolkata?
Buying a dream home, for most Indians, is a defining moment of their life, and usually, it happens to be the biggest risk-taking investment for many. Normally, the road between dreaming of a home and actually being the owner of a dream home is long and hard because it involves a lot of considerations. As a prospective homebuyer, you need to perform certain checks and tick the boxes to ensure your hard earned savings isn’t at stake.
Weâ€™ll take you through the basic pointers that will help you take the right decision and take the risk element out of your investment.
Choose the Location and the Infrastructure Wisely
The most important factor you should consider before buying an apartment is deciding why you will be buying the property for. It can be for investing your money and resale at a later date, getting a rental income or using the premises for staying with your family. Staying in an apartment regularly or occasionally, for example, in weekends needs to concentrate on a different set of yardsticks.
Generally, the location of your property must be well connected with the city centre, and must have as many as possible infrastructural facilities like schools, hospitals, banks, ATMs, markets and restaurants.
Then you should carefully consider the connectivity modes â€” Metro, bus and local train as well as consider the distance from railway terminals and the airport. Finding out about upcoming infrastructure projects by the government, like new roads or Metro line, is very much worth the effort.
You should also consider the ease of availability of local conveyance like rickshaw, auto-rickshaw, toto as you need to go to nearby places and in Kolkata this mode of transport is an essential part of our lives.
A personal inspection of the area will also tell you about the kind of neighbourhood where the project is located, whether it is low, middle or high-income posh area.
Give Attention to the Amenities the Project Offers
Whether you are going to stay at the apartment or rent it out, the amenities the project offers must be considered carefully.
Residential complexes are currently coming up with various added amenities and such projects should be favored than stand-alone projects low on added facilities.
Many new age projects are offering superior home automation and security systems, comfortable clubs, Wi-Fi, health clubs, meditation centres, ATMs, shopping centres, banquet halls, restaurants, and skywalks.
A major parameter to check is the security measures the project offers. These include a variety of safety features like protection from intruders, fire safety, etc.
Another point many buyers give importance to is the view the apartment offers. An apartment overlooking the central greens or the swimming pool is often preferred.
While you may not use all of the facilities, but these add substantial value to every unit in the project and resale value and rental income generating potential increases.
Pricing of the Apartment
Typically, the builder sells a project on basic selling price (BSP) and states additional charges like club membership fees, location preferential premium, power backup charges, security, Wi-Fi, parking, and society maintenance costs separately. The expenses generally accounted for by the property purchaser are registration, stamp duty, and the maintenance charges per square foot. Some developers, however, might take the maintenance costs for a year in advance. In certain schemes, the pricing may differ depending on the specifications and facilities offered. The buyer should tally the recurring costs and prevailing rates with similar projects in the neighbourhood.
You should make a judgment on price vis a vis the value of the residential complex offers and choose based on your financial resources, loan eligibility, etc.
Check the Developerâ€™s Past Projects
This helps evaluate the execution capacity of a developer on timeliness and excellence. The financial strength of the builder should be estimated as well because it indicates his ability to administer and execute the project. Reviewing the developer’s previous track record often serves as a great reference point for under-construction and new launches. The performance delivered by the developer and his accuracy on deadlines should also be taken into consideration. It is particularly important to take note of any legal feud or fraudulent activity that the developer might have indulged in the past.
It is also pertinent to check the quality of construction of past projects by visiting and interacting with the buyers who are actually residing in the completed projects of a developer.
It is important to gauge the business philosophy of a developer if he is hitting with his first project. Many large corporates have recently entered and are entering real estate market with their first project and you can make a fair judgment on their reliability based on their other business values and practices.
Check the Terms and Conditions of the Agreement
The first and foremost point to consider when buying a property is the terms and conditions of the written contract with the developer. It should distinctly lay down the specifications including terms and conditions like payment options, delivery deadline, and the penalty clause in case of defaults on either side.
A written agreement automatically takes care of the hidden costs, if any. It is crucial because the country still doesn’t have a well-defined guideline or a regulator for the real estate sector.
If one is purchasing an apartment in a completed project, they should physically confirm that the project is complete in all respect. In particular, the completion certificate of a government authority implies that the project is complete and fit to live in. The other things to look out for are electricity and water connections, fire safety equipment, disaster management mechanism, and tax receipts for the property.
Check Whether the Project is Approved by Bank
These days almost all residential complexes are scrutinized and approved by banks or reputed housing finance companies. As the process of approval involves the bank checking all relevant legal documents, it means you can rest assured about the authenticity of the documents.
The approved projects make it very easy to apply for a home loan and there is no requirement of the buyer to separately check each and every relevant document, government approvals and clearances, etc. as the bankÂ does it as a part of its due diligence process.
Check the Floor Plans and Clearances
When booking a flat, the buyer should consider the site plan and the floor plans proposed in the brochure, website, and any other relevant document. The floor plan and 3-dimensional views are good pointers to interior decoration needs to make the flat your home.
Besides the above pointers, you should physically scrutinize electricity and water connections and quality of construction material as much as possible.
This practical guide to property buying will help you strike the best deal while buying your dream home without hurting your financial equilibrium.