Skip to main content

Do the due diligence when Buying a new home

 

It's better to go for a bank-approved project, construction-linked payment plans and ensure that there are no disputes on the property

WHEN you buy a home, you are investing precious resources in an asset. Most potential new homebuyers live on rent and the home financed by a bank loan leads to an outgo of an equated monthly installments (EMI). In most cases, this EMI ends up being higher than the amount spent on monthly rent. So, it's essential that homebuyers conduct as much due diligence as possible before signing on the dotted line.

With the recent cases of housing projects turning turtle, experts advise most homebuyers to go through a checklist. Here's how: Under-construction means under lens: An under-construction property will invariably come cheaper than a ready-for-possession property. Depending on the stage of construction and also the response that the project has already elicited from other buyers/investors, the rates can be from anywhere between 15-30 per cent lower.

To begin with, if one is buying an under-construction project, the developer's bona fides and market standing should be carefully researched and verified.

Next, a buyer is entitled to ask for a copy of the project's drawings, duly stamped by the municipal authorities.

At present, experts advise buyers to check on the option to choose construction-linked payment plans that are usually structured on a project-to-project basis. Next, the buyer should be aware of changes in the original development plan.

Certain necessary changes are usually permitted and also mentioned in the agreement. Once actual construction begins, there may be grey areas on the blueprint that come to light only later. Sometimes, this may involve new regulations with regards to parking space or other aspects beyond the developer's control.

Use bank intelligence and your lawyer: The process of buying a residential property can be an extremely tedious process because it involves a number of nuances starting soon after an individual identifies a property he or she likes.

The first and most important step to ensure is that there are no disputes on the property or land, whether it is located in an apartment complex or an independent house.

A few things, which should be checked, are the title papers, in case of an apartment, construction certificate, approvals from the local authorities, clearances from the water works and power and all other necessary legal clearances.

Once this due diligence is done to a certain level of satisfaction the homebuyer can proceed to purchase a residence.

However, making all these checks may not be easy or, perhaps, even possible for an individual.

Therefore, the best way to ensure that the property of choice is clear of all legal and environmental issues, a good way to approach the same would be through banks. Financial institutions who lend money, usually do the necessary due diligence on the properties before clearing them for loans.

Before both parties sign, the agreement should be vetted by a lawyer to ensure there are no loopholes and at the earliest instance, the agreement should be registered.
Past record often an indicator of future: In financial markets, past performance is often no guarantee of the future. But, looking in the past, usually tells us a thing or two about what the future may shape up to be.
This is also true for homebuilders.

A prospective buyer should check into the developer's credibility, past projects and performance and delivery record. There are many instances where the delivery of the home is often delayed by as long as six-12 months.

Generally, a new builder or developer will offer better prices since his track record will be zero. He has to build reputation.


That's why the price of the home should not be the only criteria to select it. It's a personal decision whether to invest in a rookie or trust a veteran. While some old developers may also have blemishes, it is important to find out what has led to the delay. Please don't ask the builder or his officials about delays in other projects. Ask others who don't have any motive behind seeing the transaction through.

 

Popular posts from this blog

ICICI Pru Mutual Fund Dividend

ICICI Prudential Mutual Fund has announced dividend under the following schemes: Scheme Dividend ( Rs /unit) ICICI Pru Capital Protection Oriented Ser V Plan B-D 0.03611325 ICICI Pru Capital Protection Oriented Ser V Plan B Direct-D 0.03611325 ICICI Pru Balanced Advantage Direct-DM 0.06 The record date has been fixed as February 08, 2017. ------------------------------ ------ Invest Rs 1,50,000 and Save Tax upto Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds Top 4 Tax Saver Mutual Funds for 2017 - 2018 Best 4 ELSS Mutual Funds to invest in India for 2017 1. DSP BlackRock Tax Saver Fund 2. Invesco India Tax Plan 3. Tata India Tax Savings Fund 4. BNP Paribas Long Term Equity Fund Invest in Best Performing 2017 Tax Saver Mutual Funds Online Invest Best Tax Saver Mutual Funds Online Download Top Tax Saver Mutual Funds  Application Forms For further information contact  SaveTaxGetRich on 94 8300 8300 ------------------------------ ------ Leave y...

Hidden Bank Fees

  What Banks Hide From Customers Imagine after a peaceful and exciting holiday you receive your bank statement with steep charges. You then rush to your bank and start confronting staff members and to your dismay, you come to know that the high end debit card was charged very heavily. Wouldn't this cause damage to your finances? So remember, the world outside is full of deceptive and double cheating people. Unethical practices are always used by company sales person in order to meet the target. Credit card companies, mutual funds and bank institutions always play dirty tricks to lure customers and the practices are rampant. So here's how you should be careful while dealing with your banks: High End Debit Card Charges While opening an account with a bank you opt for a debit card with minimal charges. But later on when you upgrade your card and opt for high end debit card the annual charge rise by a good amount. Though such a card has slew of features but it all comes at a high ...

Partial withdrawal from PPF

  Public Provident Fund (PPF) account has a lock in period   If you opened a PPF account to meet your retirement needs,, think twice about withdrawing from this fund before retirement. But provided it's an emergency here are the rules. Public Provident Fund (PPF) account has a lock in period before which you cannot withdraw your money.   The partial withdrawal is allowed after the completion of 6 financial years . This means that you will be allowed a partial withdrawal from 1 April 2017. The maximum partial withdrawal allowed is the least of the following: 50 percent of the account balance at the end of fourth financial year, 31 March 15 50 percent of the account balance of the end of previous financial year, 31 March 17.   There's a loan option available on your PPF account between the fourth and the sixth financial year. You can obtain a loan of up to 25 per cent of the balance in your account. However, this will attract interest of 2 percent more than the prevailing ...

Updating a minor PAN card upon becoming adults

  Updating a minor's PAN card once they become adults A PAN card issued in the name of a minor does not contain the minor's photograph or signature, and therefore, cannot be used as a valid proof of identity. Once a minor PAN card holder turns 18, the relevant changes must be made in the PAN records. A new card is then issued bearing a photograph and signature. Application The applicant is required to fill up the "Request for new PAN card andor changes or correction in PAN data" form. The form can be filled up online by accessing NSDL's Tax Information Network website and clicking on the online PAN application tab. Information The applicant must mention the existing PAN number in the application and check the `photo mismatch' and `signature mismatch' boxes, and submit the online form. The form must also be printed out, signed by the applicant, and submitted along with two photographs. Documents Identity and address proof in the form of a copy of the app...

Perpetual SIP - Its Advantages

Retail investors have taken a fancy to investing in mutual funds through systematic investment plans (SIPs). As per industry estimates, Rs 4,000 crore flows into SIPs every month. One way to take advantage of SIPs in a true long-term manner is to opt for a perpetual SIP 1. What is a perpetual SIP? In an SIP , you make periodic investments in a mutual fund scheme of your choice generally every month for a pre defined tenure. While signing up an SIP mandate , you have the option to leave the end-date column blank. If the column is blank, it means the investor has opted for a perpetual SIP . Most fund houses assume this SIP will continue till December 2099 unless you give a written communication to stop it. However, some fund houses require you to tick the `perpetual option'. 2. What are the advantages of perpetual SIPs? Registering an SIP involves a lot of paperwork and it takes time. It is observed that many investors skip their SIP instalments when they go for short-tenure option...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now