Thursday, January 15, 2009

Buying a home? Some things to remember

"Once the market bottoms out, home-seekers will start making a beeline for properties and loans. If you have identified your ideal home beforehand, you will be a step ahead of others. You can jump at the earliest opportunity available — in terms of price as well as interest rates," says Ashish Shah, director, KPMG.

1) You can start quoting the price that seems reasonable to you:

Lack of buying activity means that it is a buyer’s market at the moment, and is likely to strengthen from hereon. “You can start quoting the price that seems reasonable to you.

Try quoting a price that is 50% less than the highest price a property in the locality commanded in the past,” suggests financial planner Kartik Jhaveri.

2) Finding the perfect house is nearly impossible, so go for the one that meets most of your requirements:

When you commence your house-hunting mission, it is advisable to keep a list of ‘must-have’ attributes ready.

Keep an eye on time taken to commute to school and workplace. In addition to quality of construction, evaluate the existing infrastructure — roads, water and power supply, play grounds, shops catering to day-to-day needs and so on.

Finding the perfect house is nearly impossible, but comparing shortlisted properties will help you zero in on the one that meets most of your requirements.

3) Consider old flats:

If you are not fixated on ‘ultra-modern’ amenities, you can consider buying an old flat.

If you locate a well-maintained house in the desired locality that boasts of robust ancillary infrastructure, there is no reason why it should not be considered. After all, the strain on your budget will be minimal. “The difference in prices of new and resale properties would depend on various factors, but would usually be a third less than that of a new property,” says Mr Grover.

However, a comparison between new and old houses should also cover renovation costs the latter would necessitate. Besides, if you intend to sell it in future, the resale value would have dwindled significantly.

4) Get clarity on refund:

While signing the contract, the buyer should enquire about the time frame within which the project will be completed and the penalty the builder would be liable to pay in the event of a delay.

“The builder would be legally liable to render a refund if it can be proved that he has not met his part of the contract. Such circumstances would include unreasonable delays in completing the construction, flawed construction, flawed title or evidence of previous claims on the property or the land on which it stands,” says Mr Grover.

Adds Mr Gupta: "Buyers should also enquire about the portion of advance paid that will be forfeited and the time frame within which the balance will be refunded, in case they choose to cancel the booking."
To read more, please, visit - Preeti Kulkarni-The Economic Times

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Smart property buyer's check list

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