Joy Mukherjee and Kehsav Jain work for a multinational company in Jaipur, Rajasthan. They purchased homes together four years back in different locations and of different budgets. The family and financial circumstances of both of them were the same in 2017 when they were planning to buy their dream home. Both were married and had two children. Today Kehsav is living a comfortable life without much financial stress, whereas Joy’s life has taken a sharp turn around, and he has started facing financial pressure. The reason behind Joy’s trouble is falling prey to his emotions and ending up buying the home he loved at a price he can’t afford, thus increasing his monthly financial obligations.
Home buying is a very emotional process. It’s a long-term investment and involves judicious decision-making. A rational decision has to be made while buying a home, and our emotions should be in control. You may consider the following points before purchasing your dream home.
- Analyze What You Can Afford – Don’t Forget Your Financial Discipline.
Your budget is the most crucial step, and you need to have at least 10% as a margin for the value of the property apart from your loan borrowing eligibility. Extra costs, such as stamp duty, insurance charges, and other charges, are also critical when finalizing your budget. Always search for the property at the low end of your budget. If you find the property that satisfies you, there’s no need to spend more. Remember, when you spend another Rs.20,00,000 to buy a home, you’re not just paying an extra Rs. 20,00,000; you’re paying an additional Rs. 20,00,000 plus interest, which might be more than double that amount over the tenure of your loan. So, invest that money in something else.
2. Finalize The Location – Suburb Can Be A Good Choice
Prepare the list of where areas you’d like to buy your home. Search the recent sale price history and the suburb profiles on real-estate websites. It’s always pleasant if you considered what matters to you but also be aware of things that can help improve property value in future when it’s time to sell. Nowadays, most people prefer living a calm and pollution-free life, and thus their preferred location may be a suburb located within a distance of 12-15 Km of the central city. The price is also affordable, and you end up paying at least 70% less in many of these locations. The colonizers in big cities are mainly developing properties in such locations, and Indian Realty Market has seen buyer inclination trending upwards for these locations due to the offered price of these houses. Moreover, many reputed schools are also opening branches in these locations, and most of your basic needs apart from late city life and cinemas can be fulfilled in these locations. Considering the price involved, this can be a good choice.
3. Don’t Compromise On Important Things
Is apartments or villas a big question? Both have their pros and cons. But don’t get a two-bedroom home when you know you’re planning to have kids and will want three bedrooms. Please don’t buy an apartment only because it’s cheaper than a house. You’ll probably have to make some adjustments while buying your first home, but don’t make an adjustment that will be a significant strain.
4. Clear Title To The Property
Always carry out legal, due diligence before purchasing a property. Ensure the property titles are free of any hassles and that there will be no complications in the future. Go through the builder-buyer agreement very carefully, and the chain of title should be transparent. Demarcation and Identification of property should be clear.
5. The Neighborhood is Important
Focus on the residence but look at the surrounding area as well. Though you can’t perfectly predict the future of your chosen neighbourhood, you can research its prospect to avoid unpleasant surprises down the lane.
Some questions you should focus on include:
- Kind of development plans in the works for the neighbourhood? E.g. Special Economic Zones Underway.
- Any proposal for a bridge or a highway to be built in nearby years?
- Is there a lot of undeveloped lands around? Any prospects for its development?
- Have property prices in the neighbourhood been declining or rising?
- Are there good schools available or coming up soon?
- Are basic amenities available?
- Is the area peaceful?
If you are happy with the answers to these questions, then your potential house’s location can keep it rose-coloured.
The Bottom Line
When you’ve found a house you’re genuinely interested in, search for the sales price of similar places and the rental history of the house can also be given attention. By doing the necessary groundwork, you’ll be far less likely to overpay or settle for something you didn’t want.
“In short, buying a new home should be realistic, take your time, don’t be impulsive, and, ultimately, make a home-purchase decision that’s good for both your feelings and your finances. ”
Disclaimer: The information in this article is for informational purposes only. It is not a substitute for specific advice in different circumstances. You are requested to obtain specific professional advice before you take any/refrain from any action.
