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Quick tips for first time home buyers

Unless you are an old hand at buying and selling property, there are some things that you will be better off knowing about if you are in the market to buy a property for the first time. Buying a home is probably the biggest purchase most people will ever make in, so it can only be beneficial to you if you can avoid making common mistakes and learn from the experience of others. Ask around within your circles of friends and family members, and use this knowledge to get smarter about your own purchase. In any case, here are some tips that we think are worth you being aware of.

1. Stick with a reputed developer: Reputed builders have the track record of delivering projects on time. Some lesser known builders are giving fancy promises and pricing schemes that are very tempting. But, history has shown that if you can afford it you should be willing to pay the slightly higher premium charged by reputed builders. By going with a new builder you never can be fully sure if your money is safe, if the quality of the construction will be good or if the project will be completed on time.


2. Act quickly, but not in haste: Assuming you have done the necessary research and due diligence on the property, then there is no upside in delaying your transaction/booking. By acting quickly, you can be assured that you will get a unit in the development of your choice, and more so you stand a better chance of getting a unit that meets your criteria of floor, view etc. Additionally, if you wait to act, the price might go up if other buyers have very strong demand and the supply in this development gets exhausted in the original launch phase. You might be forced to then apply in the new phase of the development but at a higher price than what you could have got in the previous phase. Don't be forced into acting in haste, but if your mind is made up, then don't delay.


3. Organize loan financing in parallel: If you know that you will need funding, then front load the process by applying for a loan, even if you have not narrowed down a property that meets your needs ad budget. You can get a pre-approval from lenders. Once you have finalized a property, check if the lenders are agreeable to financing this property or not, before you pay your booking amount. No point in starting a transaction if getting a loan on the property is going to be a problem.


4. Take a suitable payment plan: Choose a payment plan that you can meet, otherwise there will be expensive penalties that you will incur that will raise the cost of your final purchase prices. Don't get tempted by the offer of a discount for down payment plans, if you know you need the money for other expenditures. Don't over commit your finances. If you default then you will lose the property and it might take you a long time before you can recover your initial deposit and installments from the builder if at all the builder will be agreeable to refund your money.


5. Negotiate better rates: Sometimes builders might be willing to offer one-off discounts during festive seasons or if their sales are slow. Unless you ask, you won't get. So, do ask the builder if they can give you a special deal.


6. Sell the property before registration if taken for investment purpose: If you had bought the property from an investment perspective or didn't eventually like what you bought, it is strongly advisable that you sell the place before registering it. Registration charges, along with stamp duty, can be about 5%-6% of the purchase cost. So, unless you decide to hold on to the property for long, you shouldn't register it.


7. Tax benefits: Become aware of the tax benefits of owning a home or multiple homes and the deductions that you can get under each of these scenarios if you have a loan on these properties. Under the Direct Tax Code, the rules related to tax advantages of home ownership might come under review. If you are buying a house purely for investment purposes, then do ask your tax and financial advisors what the current state of the tax laws are and how you can benefit the most from the current and expected future scenario so that you can make a financially efficient decision.

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