Guide To Buying a New House: Complete Checklist

Posted on: Nov 10, 2021 | 3 mins | Written by: HDFC ERGO Team

Guide To Buying a New House: Complete Checklist

Purchasing a home is not just a dream come true but it also requires responsible and calculated decisions. You need to actively participate in fulfilling formalities and ensuring your finalised property is a safe and secure deal. From deciding a practical budget to looking for the right options available, being alert is mandatory.

With the coming of the RERA Act, the hardships suffered due to bogus investments in properties have been restricted to a great extent. Still, being aware from your end is always a good idea. This article explains some of the factors you must consider when planning to purchase a new home, including home insurance.

Importance of having a checklist when buying a new house

Finalising your dream home requires due diligence from your end. Several tasks associated with buying a home include identifying the budget, zeroing in on the location, finding a good realtor, negotiating the price, taking care of documentation, choosing the right home insurance, etc. So, having a checklist can make the process quicker and easier. It also helps you stay away from unnecessary hassle and impractical deals.

Checklist for Buying a New House

Here is a checklist that will help you smoothly navigate the various steps involved in buying a new house.

1. RERA Details

The Real Estate Regulatory Authority (RERA) was established in May 2016 under the Real Estate (Regulation and Development) Act 2016. The regulatory authority was established to sort out the problems affecting the real estate sector. Before the enforcement of RERA, cases of fraud property dealers and bogus investments were high in number and it was also difficult for property owners to get details of their property updates easily.

The main idea behind the inception of RERA was to introduce accountability and transparency in the real estate sector. RERA rules are set at the state level and the governing body is responsible for regulating the following

◦ Transactions associated with the buying and selling of real estate

◦ Commercial and residential property registrations and approvals

◦ Agents and promoters of real estate also have to register themselves with RERA

◦ Those properties without completion certificate are also required to register with the RERA authority within 3 months

◦ Prior to the completion of the sale agreement, the buyer cannot pay more than 10% of the property amount

◦ The builder has to maintain complete transparency of property details and construction updates with the RERA authority and also allow information access to the buyers

Note:

These are some of the common RERA rules implemented. Your state's official website may have detailed information on the RERA Act.

2. Know your taxes

Several additional costs, including multiple taxes, need to be considered when buying a house. Goods and Services Tax (GST) for under-construction properties, property tax, registration charges, etc., make up for the additional amount that goes to government coffers when you plan to buy a property.

Remember

: You must not think that the property cost is the only cost you have to pay. These additional charges may also pile up to a good amount. So, make a decision only after calculating all these expenses.

3. Location

Location is the only thing that cannot be changed once you have bought the property and hence needs to be evaluated carefully. Accessibility is the keyword when assessing the location of your new house. Ease of accessibility and a good neighbourhood can make a great deal even if you plan to rent the home in the future. From day-to-day requirements such as a marketplace for buying groceries to the facilities such as health institutions, educational institutions, and connectivity options, all go into consideration when finalising the location. All these calculations are crucial for the right choice.

Tip:

If possible, you may also want to evaluate the condition of your location during the rainy season.

4. Property price

Discernment is the cornerstone of wise decisions. Detailed market analysis and property price trend research can be crucial to ascertaining the right price of the property. Moreover, buying a house is an investment you make for the future. Studying the area's property price appreciation and depreciation history is one of the steps for buying a house. Knowledge of price trends can help you determine the worth of the property and predict the returns on investment in the future.

5. Documentation

As a home buyer, it is vital to ensure that all the property documents from a builder or previous owner of the property are in place to avoid any last-minute hiccups and save you from any legal hassles in the future. Documents such as a certificate of completion (if the property construction is completed) RERA certificate, no objection certificate, structure plan, registration, approvals, etc. need to be verified before you initiate any transaction.

6. Talk to Mortgage Lenders and Get a Mortgage Pre-Approval

Producing the right documentation can be laborious, but preparing in advance ensures that it goes smoothly. If you are planning to take out a mortgage to buy a house, it is prudent to talk to lenders to save time. The loan approval process can be time-consuming and prone to rejection if the borrower is unable to submit the required documentation. Getting a mortgage pre-approval letter from a lender helps establish your earnestness as a buyer.

7. Find a Realtor or Real Estate Agent You Trust

A realtor you trust can act as a guiding hand to help you overcome any obstacles you might face. Being an expert in the field of real estate, a realtor can provide you with crucial information, make suggestions based on your needs, and help to find your dream home.

Tip:

The best way to find a real estate agent you can trust is to look for recommendations from your trusted friends and family. A good agent can be useful during the negotiation process to make sure you do not have to shell out extra bucks.

8. Know your budget

Determining your capability to pay is the first step in your quest to find your dream home. Knowing your budget at the early stages saves a lot of time and helps you focus on the properties that fall in the price range you have set for your home. So, set your budget in a manner that the loan EMIs do not impact your lifestyle. Important expenses such as home insurance, maintenance costs, etc. need to be factored in when deciding on the budget.

Tip:

While calculating the budget for the new home, it is also vital to include the ongoing financial commitments of your life. These are the ones you cannot compromise. Also, an emergency fund has to be kept aside so that you don't have to rush here and there when a financial emergency occurs.

9. Negotiate

The art of negotiation is an important skill to have when buying a new house. The to-and-fro of offers and counteroffers can get a bit taxing. Listen to your real estate agent when submitting your offer, as their expertise in the field can help you determine the right price for the property.

Tip:

Doing a bit of market research can help you negotiate on practical notes.

Post-Purchase Checklist - Home insurance setup, Home maintenance planning

Now that you have purchased your dream home and it is all set to welcome you, here is what should be your further plan. Once you are done celebrating the happiness of this new part of life, you must look after the post-purchase checklist. It may include the following:

1. Home Insurance

First and foremost should be a home insurance plan. Yes, investing in home insurance is not a smart choice but a much-needed investment. Unforeseen incidents like fire mishaps, calamities, accidents, floods, theft, etc. can prove to be damaging to your home. To secure your finances and home against such mishaps and ensure the quick revival of the home structure and valuable contents, having home insurance is important. It protects your home structure and valuable contents inside the home against mishaps or theft.

2. Home Maintenance

Your home requires your constant attention, which must be paid through maintenance. From regular cleaning to timely painting and deep cleaning, all these steps are crucial for ensuring its longevity.

3. Home Essentials & Decor

After you have planned to move to the new home, you must arrange home essentials and your preferred decor. You may already have certain essentials, or shopping may also be needed.

FAQ's

1. What is the RERA Act?

RERA stands for Real Estate Regulatory Authority Act, which was introduced in 2016. Its aim was to protect the interests of buyers and sellers of property and promote transparency between builders, agents, and buyers.

2. What should be the budget for a new home?

The budget depends on various factors and may differ from one person to another. In order to decide on a budget practically, you need to assess your ongoing and essential future expenses and secure emergency funds.

3. Is home insurance mandatory for a new house?

No. Home insurance is not mandatory by law. However, it is always the best idea to invest in home insurance whether you live in your home or on rent. It protects your finances that may otherwise get drained due to unforeseen accidents with your home and the valuable contents inside the home.

Conclusion

Buying a home can be an enormous task that requires a lot of effort and time. If you are a first-time home buyer, the whole process can be a bit overwhelming. However, once you enter your space of comfort, your new home, all the hustles and efforts put into the process of purchasing the home become worth it. Buying a property like a home requires a practical approach and active participation.

The points mentioned in the article above would help you make an informed decision when finalising your dream home. Along with these, having property insurance is a must to secure your home and contents from all ends, especially financially.

Disclaimer The above information is for illustrative purposes only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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