10 Points To Consider Before Buying Dream Home

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10 Points To Consider Before Buying Dream Home

 

Why should you buy your own dream home? What comes first in your mind when you just start dreaming about your dream home? Why are we start dreaming about our dream home? We usually overwhelmed with a lot of questions that come to our mind & usually get emotional with this beautiful dream. At this point, the real estate builders take the advantage of this emotional juncture.

So what is the solution to make the right decision?

Here is the list of 10 points which must be considered before buying your dream home because this is just not only a dream which has to make true but also a capital-intensive decision. If something went wrong then it would be very very hard to recover invested capital & would shatter your dreams very badly unless you have enough money to invest again.

So let’s discuss these 10 points

#1 Locati0n:

Home Location

If anything, is the most important point, in the journey of your dream home then it’s the LOCATI0N. Take some time & ponder on this point.

Location is everything.

The location will decide how the value of your property would appreciate in the future.

When I owned my dream home six years back at Omega City, I gave much-much importance to its strategic location.

What would be the basic requirement of a small family with children of age suppose 10 years?

The answer is very simple a reputed study institution should be nearby…shops of daily needs stuff should be nearby…blah…blah…

At this point, we should not consider the amount of investment required to own the plot or flat. Keep your head cool.

First make sure, how many points are satisfying, as per your priorities to make it a damn good decision.

I personally felt & have seen many people, across this journey that people used to compromise their priorities initially, due to investment amount, but feel suffocated later & their this action never gives them an awesome feeling of achievement.

I am again reiterating that this is a capital intensive decision so a small bit of additional amount should not blur your picture of your dream home.

Once your location finalized, it means, more than 50% job is over.

#2 Builder’s Reputation:

Reputation of Builders

This is the 2nd most important point which must be considered before taking the investment call. You have seen many frauds happening just because the builder didn’t keep his own word. He didn’t land the project on-time…made false promises…

Here is a very interesting real story.

When I have just initiated the process six-year back to own my dream home, at the same time one of my friends also start the process at some other location but our builders were different.

But what happened finally?

I got possession of my flat within one year from my builder Mr. Amritpal Singh, MD of Omega City.

But he could get neither possession nor money back even after six-year just because his builder lied to him.

Now you can imagine if one has to pay EMI on one side of Home Loan & on the other side has to pay rent, what would happen with their financial situation?

So on that learning, I concluded that the role of a reputed builder is much-much important. You should take 360-degree feedback before stepping in.

#3 Ready-To-Move Vs Construction-linked plan:

Ready to move home

As I already told that my friend didn’t get his home till now, here was the one more basic difference and that was the “Ready-To-Move Vs Construction-linked plan”.

I preferred a ready-to-move plan instead of a construction-linked plan. Although home buyer or investor remains more comfortable with construction-linked plans because the amount has to pay, just as the progress of project goes up, so a retail investor could trap if the project didn’t land on time.

Just imagine if one has to pay EMI along with house rent then how much it would be difficult to manage both things simultaneously.

#4 Beware of Fancy Project Name:

Real estate frauds

To make fool of home buyers, few companies advertise their project name on the names of the government schemes.

Like ‘Lok Awas Yojna,’ one of the schemes of the Indian government for the home buyers.

But some builders use this name to attract more people. They create hype through social media or any other mode of communication among the peoples that you are losing the benefits of Indian government-supported schemes.

They excite you to take the Impulse Decision. Once you have taken the impulse decision, then their game is over. Now you are the scapegoat for them.

One of another friend was trapped in this fancy name last year. I know personally how much efforts were put-in to take back token money.

So to escape from such traps, you should do some homework whether the project is fully approved by some public banks…whether they have cleared all legal formalities for their projects…Whether they have all approvals from different government departments etc.

So never take impulse decision in this matter until you have full clarity else would suffer huge irreversible financial loss.

#5 Choose Semi-Developed Area:

Dream Home

Whenever you do planning to choose the location for your beautiful home, prefer the semi-developed area which should be under Municipal Corporation.

The biggest advantage of a semi-developed area is that you could get this at a very competitive price along with all other government amenities.

But, if you are dreaming of your beautiful home then also want to live-in as soon as possible.

Just think about it, if you had taken your beautiful home in the least developed area, it might cost you a cheap price.

But having no good roads, no transportation connectivity, no drainage system, no street lights, no regular water supply, no regular electricity, etc, will lose the taste of investment & never feel a sense of accomplishment, which is very very important to mentally satisfy. 

If you buy in a fully developed area then it would cost you very much high which could not be affordable.

#6 Be Mentally Prepared For Rollercoaster Ride:

Prepare yourself mentally for buying home

When we finalized the location, builder, ready-to-move or construction-linked plan, area, etc… Now give some time to yourself & your family to think about deeply before going forward.

Don’t just overwhelm with emotions but be ready for hard reality.

Because the decision to buy a home will directly hit your financial & emotional wellbeing. If you are not mentally prepared then there might be the chances of family disputes.

Firstly take into consideration the payout which you are taking home every month. As the EMI will start, which could be most probably 30%-40% part of your salary, you would have to manage with lesser resources.

Earlier you were managing your expenses with 100% amount but now you have to manage with 60% only. So the stress of 40% of expenses will go somewhere which you have to handle carefully.

So you should keep the EMI amount at the level where you feel comfortable…Which could be paid easily. You have to make the balance between your EMI amount, EMI tenor, & other expenses. So be ready for this financial rollercoaster.

Secondly, it might happen, your nears-dears oppose your decision to buy your beautiful home.

But you should keep your cool. At this point, you should have control over your emotions & think rationally.

You can’t make happy everyone instead believe in yourself.

So be ready for this emotional rollercoaster.

Thirdly, crosscheck the people from whom you are thinking that you would take financial help.

Because banks will give home loans 80%-90% only, the rest amount along with registration fees, stamp duty, & other miscellaneous expenses (which generally 10%-12%) have to incur yourself. So starts to save money for a down payment as soon as possible

If you are thinking that everyone will give financial assistance to you with whom you would contact without crosschecking them, then you may land in serious financial trouble.

Some of your nears-dears will deny on the spot. If they have denied for financial assistance then don’t angry with them instead be ready for a rollercoaster of emotional setbacks & take lessons of who are your really well-wishers.

#7 Pre Approval of Home Loan:

How to take home loan?

Now starts to contact financial institutions who will give you a home loan. Discuss with them openly all types of processing fees, hidden charges if any. Negotiate with them competitive interest rates. You can better negotiate if you are working in a reputed organization.

Your CIBIL (Credit Information Bureau India Limited) score plays a pivotal role in getting the home loan.

The range of CIBIL score remains between 300-900.

You can get home loans only if your CIBIL score is more than 750 else would face difficulties or have to compromise on a higher rate of interest.

So if you are planning to buy a home or real estate property, then starts to improve your CIBIL score. Now you can check your CIBIL score online at free of cost.

Once you got the offer letter of home loan from financial institutions before going to the builder, then you may in better condition to negotiate well on the price of real estate property with the builder.

But make sure, all EMIs amount should not be more than 40% of your in-hand salary.

If your EMIs are already 40% or more than it then you may face trouble in getting the home loan.

For this, it maybe you have to pre-close your already in-force EMIs.

The financial institutions generally make sure that the person should have enough money left after paying EMI so that he could accommodate all other expenses.

#8 Stick To Your Budget:

How to plan budget  for buying home

Stick to your budget even you are getting gold at the price of silver. The stickiness with the budget will depend on the reliability of the income sources.

If you have multi-sourced income then take a call to vary the budget else remain with what your pocket allows you. Generally, people start their search with X budgeted amount but finally lands with Y amount & this disposition from X to Y disturbs other finances. So you should keep this constant & vary other parameters of your home selection.

#9 Take Help Of Property Consultants:

How to take help of property consultants?

This is another important factor to consider before buying your home or property.

Don’t just go after a fancy name just like a builder’s fancy project name.

Do some homework & identify a reliable person who will help you throughout the way.

Tell them your crystal clear expectations, freeze payout with him for identifying good real estate property.

#10 Do Your Financial Planning:

How to do financial planning for buying home

This is the last & most important point to do financial planning before buying the home.

We should take the help of financial planners who can guide us very effectively if we are not subject matter experts.

People generally don’t take the help of a financial planner but in reality, a financial planner can save your lot money with his expertise at a little token of money.

It’s generally observed that people only come to financial planners when they stuck with issues, but till then it becomes too late to rectify issues.

So take the expert advice because of its capital-intensive decision which will not reverse without heavy financial loss.

Conclusion:

We normally overwhelmed with emotions when we want to purchase dream homes but with these 10 points, we will remain rational to a large extent, which will again help us to buy a good real estate property at a very competitive price.

 

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