12 Things to Include in Your Home Buying Checklist

12 Things to Include in Your Home Buying Checklist

Planning to buy your first house? Buying one’s own home is a dream for many people. There’s plenty to look forward to as a first-time home buyer, from browsing houses online to touring prospective neighbourhoods. Purchasing a house is one of the biggest personal and financial decisions you will make and often, one of the most complicated. There are legal terms, real estate agents, mortgage lenders and loan terms to deal with and it can all get very overwhelming very quickly. To get you started, here are some basic steps that will give keep you in control, from the start.

The 12-Point Home Buying Checklist

1. Purchase Cost

Estimate the total cost of ownership, including parking charges, stamp duty, registration charges, maintenance, one-time deposits for apartments, new furniture / furnishings that you might have to purchase. All this could contribute to almost 5-20% of the base cost of the apartment.

2. Property Area

It is important to understand the final usable area of the home, especially in case of apartments under construction. You must check the carpet area, as this is the liveable area that you will finally get to use. If you are quoted the built-up or super built-up area, always ask for the carpet area. You may have this separately verified by a property valuation agency. In case you are opting for a bank loan, the bank will do such a verification as part of its loan process.

3. Running Cost of the Property

Estimate the total cost of running the property. This will include maintenance charges, property tax, EMI in case of a loan, increased commuting charges as compared to your present location if the new home is located farther away. Ensure that these expenses fit into your monthly budget.

4. Legal Assistance

Hire a lawyer to go through all the documents related to the land and the property. It is difficult for an amateur to understand property papers  (e.g. a 7/12 extract in Maharashtra) filled with industry jargon such as title deed, land use, approvals from municipal corporation, occupational certificate and more, especially if the property is a not purchased from the builder directly. If you are planning to take a loan, the bank will do all verifications, so this may not be as critical.

5. Property Value

Find the average range of prices in the neighbourhood by asking around. One should speak to people in at least 2-3 neighbouring buildings to get an idea of the property prices in that neighbourhood. There could be a range of 5-10% difference in prices even within neighbouring buildings, depending on the quality of construction, exact configuration of the apartment, etc.

6. Builder Track record

If you are buying an under-construction apartment, then visit buildings delivered already by the same builder to check the quality of construction. You can ask the occupants of these buildings whether the building was completed on time, whether the developer handed over the building to the housing society amiably, etc.

7. Payment Terms

Discuss with the seller upfront on the cash component, if any. These details spring up at the last moment and most of us do not have access to large amounts of cash. Do avoid payments in cash as far as possible, as such exchanges will have no trail (record), which can be disastrous in case of any dispute or cancellation later.

8. Residents

If you are buying a flat in a building, it is important to check whether most of the other occupants in the building are like-minded and of a similar age group. If the residents are not like-minded, conflicts emerge eventually over how to maintain the building, how to allocate parking spaces, whether pet animals are allowed in the elevator, etc. You can consider avoiding buildings with a mix of apartment types (e.g. 1BHK, 2BHK, 3BHK apartments), since different budgets and income levels of occupants might cause differences of opinion in the long run.

9. Rent Potential

If you are buying an apartment as an investment, think of the profile of your desired tenant and whether your apartment is suitable for such a tenant. Check if the apartment is close to a commuter route, e.g. is there a railway station or public bus stop nearby, are there arterial roads or a business district close by. If there is a parking space, check if you require two parking slots.

10. Facilities and Convenience of Stay

Speak with the building’s security guard or the security guards of the neighbouring buildings (in case the building in which you want to buy a flat is under construction) to find out the reality of water supply, electricity supply, availability of domestic help and level of security and safety. Also ask whether there are grocery stores, chemist shops, gyms, day care centres, restaurants, hospitals and schools nearby, depending on your life stage and your needs.

11. Finance for the Property

Get your loan sorted early to plan your finances. Explore rates for co-ownership with a woman or a senior citizen, if applicable. Ease of customer service, options to manage your loan digitally should also be considered as this will be a long-duration loan. Explore your options wisely and finalise a loan that is best suited for you.

12. Investment

If you are buying the apartment as an investment, please ensure that it fits into your overall asset allocation and that you have a balanced mix between equities, debt instruments and real estate. A mix of 40:20:40 is recommended among the three, for investors below 50 years of age. Also, calculate your annual returns from the property as a combination of 2-3% rental income plus the expected capital appreciation less maintenance charges.

Conclusion

To sum it up, buying an apartment is one of the biggest decisions you will take, ranking below just marriage and having a child. You have a responsibility towards yourself and your family when you buy a home. Carrying out the above due diligence before buying a property will ensure that “What you thought is what you got!”

FAQs

What should be included in a home buying checklist?

A home buying checklist should include important factors like budget, loan eligibility & payment terms, location, property type & details, legal documents, builder reputation, amenities, inspection and registration details for a smoother purchase.

Why is a home buying checklist crucial for first-time buyers?

It helps first-time buyers stay organised, avoid mistakes, evaluate properties wisely, ensure legal clarity and manage finances better, which makes the entire home buying process stress-free.