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Buying a property - What are the first few criteria to focus on

So you and your family have decided to purchase a property. What should you do next?

Here we share with you some criteria that should be the key deciding factors that you must keep in mind when evaluating your purchase decision.

1. Location: A suitable location should be the top most priority when you are buying a house. Is the place centrally located? Is it well connected? What are the future growth prospects of the surrounding area where you are looking to buy? Is there good connectivity to schools, roads, shopping centres, places of worship - all these will influence your quality of life. You must form a view on these before you make your final purchase.


2. Budget: Along with location, deciding your budget is going to be key to understanding how much you can afford to pay. In fact, your budget might have a bearing on the location you can afford. You should analyze the total cost of purchasing the house. Can you pay this amount from your own pocket, or will you need a loan? If you need a loan, understand what your EMI paying capacity is going to be given your current income and prospects for future changes in your income profile. Will other family members contribute to the EMI? Please be aware that even if you need a loan, the lender will expect about 20% of the final purchase prices to be paid out of your own pocket, so you must budget and plan to organize funds for this amount.


3. Additional Charges: In addition to the property purchase price, the law requires you to incur two other kinds of expenses. These can be fairly expensive, so you must budget for these as well when you are evaluating your purchase decision.
   
   
   • Registration Charge: When you buy a property, you will need to register it in your name in the municipal records to establish your legal ownership of the property. There is a cost of registration which typically can be about 1% of the purchase price, but can depend upon the state within which the property is located.
   
   
   • Stamp Duty: During the registration process you will have to pay Stamp Duty, a kind of tax that the government levies on your purchase transaction. This charge also varies from state to state, but can be about 5% of the purchase price.
   
   

   The above two costs can together add a lot to the full cost of buying a property. So, when making your budget, plan for these costs as well and identify where you will get the money to pay these charges.



4. Size and floor plan: Properties come in many different layout plans and sizes. Depending upon your taste and needs, you might prefer a large kitchen, an extra bathroom or want a study or play room for the kids. Familiar yourself with the layout of the property. If possible, visit a sample flat to see what the final product might look like, and then decide if it matches your needs.
   
   

   One things to be aware of is that you pay for a certain square footage, but will not have access to all of it, as some area will be lost due to construction of walls, common areas such as corridors and lift banks. So don't be surprised if you pay for say 1,500 square feet but the carpet area (i.e., the area you can physically occupy) is only say 1,200 square feet or less. Ask your builder how much will be the actual area of the apartment that you can use.



5. Specifications: Different builders have different features, fixtures and fittings, tiles, and woodwork. Additionally, each builder has their own reputation on the quality of the finishing that they provide for the flats they sell. Typical specifications that you must evaluate are the tiles/flooring, counters and cupboards in the kitchen, quality and look of the electrical fittings/sockets, bathroom fittings, window panes, door handles and knobs, power backup, air conditioning ducts.
   
   

   Understand whether the apartment will be delivered to you in finished or semi-finished form and what additional out of pocket expenses you might have to incur to make it habitable according to your taste.

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