Property purchase process is tedious. Be it for any kind of property – an apartment, villa, independent house or even a residential or commercial land. Simple reason being the size of investment is usually huge so you tend to be careful in making the right and the best decision. In addition, one usually has multiple options to choose from which adds to the confusion and dilemma.
During property purchase, buyers end up going through disorganized events which for some can also be chaotic. In retrospect, if you have bought a property you may associate your experience with series of events listed in below picture. For first time property buyers, the process can be more organized if they follow these events in succession.
Property Purchase Life Cycle
Step 1: Discovery
You figure out city, area and possible projects as viable options for investment depending on your parameters – location and budget being most important ones. Large number of buyers become aware or show interest in projects on the basis of referral from friends, colleagues and family.
Step 2: Shortlist
When you find few options under your budget and preferred location, you further dig deep and shortlist projects on the basis of more parameters like project size, floor plan, amenities, vastu, liveability, possession date, payment scheme etc. For land investments, shortlisting can be easier and quicker as some of these parameters will not be relevant.
Step 3: Property visits, comparisons, new short-lists, negotiations with Builder/Seller
Once you start making visits, you get into a mode of liking/disliking them on the basis of parameters mentioned in Step 2. Element of doubt is highest for under construction projects, you wonder if you will get what is promised and more importantly if you will get it by the date it is promised. With recent reforms like the Real Estate Regulation Act(RERA) for real estate sector, this uncertainty should come down. You can refer the complete Act here.
Builders, associated marketing agencies and brokers leave no stone unturned in convincing you to sign the cheque for booking amount. Thorough research and comparison is advisable before making a hasty decision. Important to think from all angles when it is about investing significant part of your savings and or future income in form of EMIs.
With information overload from all directions – builder, brokers, property consultants, lawyers, various advertisements, offers, opinion of near and dear ones – the process becomes overwhelming.
Step 4: Finalize – Deciding on your dream home
With good amount of research, comparisons and best deal, a buyer finally comes to that one project and that one unit which is of interest. Time which steps 1 to 4 take can vary from anywhere between few weeks to few months and in some cases more than a year for buyers. In first hand sales, finalizing implies signing a cheque for booking amount in Builder’s name. In case of resale, the same will in Seller’s name.
Step 5: Financing
Financing is a very important step in your property purchase life cycle as success implies you get to pay the required amount and proceed to registry which is the last and final step. Failure at this stage takes you back to Step 1 and can further delay your property purchase aspirations. With demonetization and low interest rates, banks are eager to disburse loans at present. In addition, with Pradan Mantri Awas Yojana(PMAY)-Housing for All Scheme, govt has started rolling out loan interest subsidies on house purchase to households across India – another step in the direction of affordable housing. Extent of subsidy and maximum size of unit differs across income groups – Economically Weaker Section(EWS), Middle Income Group(MIG) – I/II etc. You can check more details about PMAY here.
One has to be careful during financing about terms and conditions of banks related to premature closure fees, processing fees, interest rates(floating/fixed), tax rebates on housing loan’s principal and interest payments etc. We will publish a separate article covering these in detail on this blog.
Step 6: Closure/Registration
With financing or loan sanction going through, you get closer to the last but not the least step of registering a property in your name. For under-construction projects, registration is held usually until the property is ready for possession and banks disburse loan amount in proportion to construction progress by the builder. For ready to move in projects, registration is instant. Banks do not release loan amount cheques in the name of Builder/Seller until you register the property in your name. Property registrations are carried out at Registrar offices in a city. Bangalore city for example has more than 30 registrar offices across North, South, East & West divisions. Registration process at a registrar office can consume your entire day depending on rush of registrations on that day. With bio-metric details of promoters, brokers/agents(if involved) and buyers, a registration process ensures that ownership of said property is officially transferred under your name with all these witnesses.
While property purchase is a grueling experience, with the help of this blog our purpose is to make it an easy and a fun experience for you and your family. Stay tuned for more updates and input around making best purchase decisions in real estate. Also, do share your comments about this post in the section below. Will help us get feedback about what you want us to cover more.
The Get Me Roof Team