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Investing in real estate is exhilarating and it generally takes decades of efforts to enable one to experience such a feeling. In order to get the most out of your hard earned money, you must take time and analyze the various factors involved in buying a property. This process could be overwhelming and sometimes stressful whether you have bought many homes or you’re looking to buy your first, whether you are looking for a primary residence, investment property or the perfect vacation getaway.

The current real estate market in India is offering great opportunities for growth but the downside to such an investment have also increased, so we believe it is our duty to educate a buyer to make a calculated decision. Many factors are to be considered while deciding which property would be the best buy, so you must have all the resources which would help you in making this decision along with ample time to utilize these resources thoroughly. We have prepared this guide to help you understand the various aspects involved in buying a property which would help you in making a shrewd and hassle free financial decision.

Before starting your search for your dream home, you must clearly identify what exactly is it that you want and can afford. Buying a home is a huge decision so it is very important for you to educate and prepare yourself in advance. The two major questions that you must answer at this stage are:

  • What kind of property are you looking for?
  • How much investment can you afford?

It is very important to know what you desire and what is actually beneficial for your family, you don’t just buy a property for yourself but also for your family members and so you must sit down with them to know what would benefit each member of your family. Once you know what you are looking for it would be very easy to search for the property which would be the best fit for your family.

Knowing how much you can invest can take some time and energy, but make sure you do not overestimate your finances or depend on something which may not happen in the future. You must be extremely cautious and honest while deciding how much you can afford. The next section of the guide will help you in making the right financial decision.

Buying a property is not the toughest part, the days after such an investment could get very tricky if you have not planned your finances beforehand. You must be confident that after paying for the property it will be easy for you to live the next few years without facing any financial crisis. Even if you have enough savings to buy the property without taking a home loan, you still must consider which option would help you in the future.

Unless you are one of the rare few to be able to pay cash for the property, the key is to find the right lender and loan options. There are many lending institutions offering a wide range of loans, you must carefully examine all your options and close down on one with a lot of care and diligence.

Get pre-qualified for a loan

It is highly recommended that you get pre-approved for a loan before you start searching for a home. The pre-approval procedure involves authorizing a lender to scrutinize your current financial situation and credit history. The lender would then present to you a document which would inform you about how much you can borrow to buy a home. You must go to various financial institutions to compare which one would provide you with the best deal.

Advantages of getting pre-approved

  • You will have information about how much you can afford and be prepared to plan accordingly
  • As a motivated and qualified buyer you will be taken more seriously when you make an offer on a property
  • First time investors will be aware of all the additional costs involved in buying a property
  • Processing of the loan application will take place at a much quicker pace once you have attained a pre-approval

Now that you know how much you can afford, it is time to narrow down your options and make a list of properties that you would want to visit. You must take note of ‘must-have’ and ‘like-to-have’ features in your property. This will save your time and ensure that you focus on suitable properties catering to your needs, make a list of the properties that you feel are worth visiting. The internet will educate you on the type of properties which are available in the market. It will be of immense help when you go for a site visit with sound knowledge about the market.

Facts which would give you a perspective into the searching process:

  • 90% of home buyers search for their options on the internet, it is the fastest way to know what features upcoming projects have to offer
  • A typical buyer searches for 12 weeks and generally visits 12 properties before choosing the one

Take time to analyze every property that you visit, laying down pros and cons for each to make sure that you make the right investment. It is of utmost importance to be vigilant while visiting a property.

At this stage you have chosen which property you are interested in buying, it is time to get the best deal for your property. Every real estate developer is open to negotiating the deal, you must do some research about the project and push the seller to offer you a substantial bargain.

Find out the rates of similar projects in the locality, inquire about when the bookings for the project had begun, compare the launch price and the current price, enquire about the price trend in the local market, speaking with people who have booked a flat will give you clear picture of what to expect while negotiating.

Convey to the developer that you are hunting for the best property at the most attractive price and that you want to a close the deal promptly. Your initial offer can be upto 10 to 12% lesser than the quoted price, but you should be willing to avail a discount of 5 to 7%.

Once you have successfully negotiated with the seller it is time to go back to your lender to confirm loan details so you can close the deal. If you have been pre-approved for a loan, this part of the process will be relatively effortless, which focusses on finalizing the loan details and signing papers. The lending institution will verify the legality of the property, banks do not lend for disputed properties and for titles where ownership cannot be easily enforced.

The property against which the loan is granted, is used as the security or collateral for the secured home loan. Therefore, in order to get the home loan you must submit the original documents of the property to the bank which will be returned to you once you repay the entire loan amount. You should also take help of your real estate agent, they are experienced people with a sound knowledge of what is available in the market, which lending institutions provide the best rates and will help save your time and energy.

If you have done proper research while selecting your property there won’t be any surprises now, this part of the process will be very joyful, gaining ownership of your property!

There are a few things that you must do in order to be free of stress or anxiety before closing the deal:

  • You must again verify the legalities of the property, get a title search done and make sure that there are no issues relating to the ownership of the property.
  • You will be given the chance to take a walk through in your apartment, make sure everything which was promised is in place. If you find something missing or broken you should ask the seller to repair it or you may renegotiate the price to consider the costs of repairing the damage.
  • You should conduct a pest inspection to ensure there are no wood-destroying insects (termites or carpenter ants). You will not want to live in a home with a termite problem, even a small problem could spread very fast and cause immense damage to your furniture which will then take huge amounts of cash to fix. If such an issue is detected after an inspection you could ask the seller to fix the issue.

On the closing date you might be taken to a lawyer to complete all the paperwork relating to the property, at this stage you will receive the property title and copies of all documents relating to the property.

Buying a real estate property gives you a sense of accomplishment and pride, you now have a property to show for your hard earned money. The feeling of investing in real estate for the first time is hard to put down in words, it provides emotional security and you could now literally do anything with your property.

We are looking forward to serving you and wish you all the best on behalf of the VKG team for the property buying process!