Buying a Home

  • It’s important to carefully think about where to buy your first home. Your decision will depend on your daily schedule, work location, the need for good schools for your children, and so on. You may also opt for a location with a hospital in the area for medical emergencies. While some people need good access to public transport (metro stations, bus stops, train stations, etc.) others may opt for a quiet neighborhood or with a market nearby. Consider all these factors when purchasing a house.

  • If you have decided that you are ready to purchase your own home, the next step is to decide on the kind of home you want. You have a number of options.

    - You can opt for a new house, which means purchasing directly from the builder, development authorities, or cooperative housing societies.

    - If you are not ready to shift immediately, you can opt for an Under Construction home. This gives you the advantage of paying for the home in instalments based on the stage of construction.

    - You could also opt for a resale house, i.e., purchasing a property from existing owners. You may decide to buy a resale house if your priority is the location where there is no new construction, or if you’re budget is lower. However, an older building will have a shorter lifespan and more issues (such as leakages or sagging beams) compared to a brand new construction, leading to higher maintenance costs.

    - Some people prefer to purchase a plot of land and construct their home based on their specific requirements. However this comes with additional construction permits and costs such as structural construction and foundation, laying fresh water and waste water pipes, laying of electrical conduits, development of the site itself including periphery walls and landscaping among others.

  • - Carpet area is that area in the flat which you could cover using a carpet. It is also known as the net usable area. According to the Real Estate Regulation and Development Act (RERA), carpet area is ‘the net usable floor area of an apartment, excluding the area covered by the external walls but including the area covered by internal partition walls of the apartment’.

    - Built-up area in a flat is its carpet area, plus the space taken by the walls. The build-up area in a flat also includes other uncovered areas like balcony, terrace, flower beds, etc. This is why the space in a flat would seem larger when it is expressed in build-up area terms. Property taxes in many states are calculated on the basis of built-up area.

    - Super Built-up area is the built-up area of the property, along with the proportionate area of the common facilities in the housing project. These facilities may include the lobby, the lift shaft, the stairs, the swimming pool, the garden, the park and clubhouse, etc.

    Before the RERA made it mandatory for builders to sell flats based on carpet area, they widely used the super-built-up area as the space-measuring unit, to cash in on the lack of clarity on space calculation. The use of super built-up area as the measuring unit, helped them to lower the per sq ft cost of the property. It also gave the buyer a false impression that they were investing in a large home when they actually were not.

  • Use this checklist so you don't miss anything out on a site visit.

    - Take photos. Try to visit a site during the worst time for a location, like monsoons so you know what is the worst to expect

    - Construction Quality: Check the ceiling and walls for cracks or moisture

    - Interior Quality: Check quality of fittings such as flooring, cabinets

    - Foundation: Cracks on the outer walls point to poor construction

    - Official Inspection: Try to get the results of the last building inspection

    - Lifts: Get a sense of how long you will wait for a lift during busy times

    - Power: Ensure there’s emergency power backup for outage

    - Water Supply: Is the water supply 24/7?

    - Wiring: Turn on each switch to see whether everything works

    - Phone signal: Check whether your signal is clear in all zones

    - Plumbing: Flush the toilets and run the taps to see pressure and plumbing quality

    - Leaks: Check for leaks from the walls, ceilings, under sinks, and on pipes

    - Flood risk: Assess possibility of damage due to flooding. How badly is transit affected?

    - Safety: Does the building have a guard or cameras? Have there been any break ins?

    - Noise: Are the windows facing any busy roads, train stations, schools, airport or temples? Typically more evident on higher floors as sound from further away can be heard.

    - Natural Light: See how well different rooms are naturally lit throughout the day

  • Step 1: Apply for a home loan and get the initial evaluation done.

    - Submit application documents with a processing fee

    - Bank evaluation based on credit history and documents.

    Step 2: Bank Verification

    - If eligible for a loan, bring your documents to meet a bank official

    - If not eligible, you will lose your processing fee

    - Bank will verify all submitted documents

    - A representative will visit your workplace and residence to cross-check details

    - The property to be purchased will be evaluated

    - The bank will evaluate your repayment abilities

    - If approved, Bank will prepare an offer letter with conditions you should review

    Step 3: Bank Approvals

    - Re-read the document, and get a legal opinion too, if you are unsure. There may be points that you can change or negotiate

    - Once you are sure, sign the loan agreement

    Step 4: After Signing

    - Submit post-dated cheque

    - The bank will disburse the loan as a lump sum payment (usually for a ready-to- move property) or in installments (for an under-construction flat)

  • Unless you are yourself a qualified expert, you should always look for legal advice from someone who knows about real estate sales. At the very least, you should ensure that these documents are in order:

    - Sale deed (Also called Title deed or Mother deed)

    - Encumbrance Certificate for sale of previously owned properties

    - Power of Attorney if the sale is through someone other than the owner

    - Allotment letter from the builder

    - Building plan and layout plan sanctioned by the statutory authority

    - NOC (No Objection Certificates) from the local Fire Department /Pollution Control Board/Water Works/ Electricity Department/Airport Authority as required

    - Approved plan of construction and construction license

    - Cost estimates and valuation reports

    - Details of payment plans and stages

  • Home buying requires a high level of financial preparedness. In places like Mumbai, Bengaluru, Delhi-NCR and other metro cities, the EMI on home loan is normally very high due to higher property prices. Therefore, if you are financially not ready, then, your whole plan of buying a home could become more stress than celebration. Ensure you are financially ready to not just pay the EMI but also raise the margin money

    Here are the regular expenses you will encounter while buying a home: Each month, you will repay the loan by paying an Equated Monthly Installment, an EMI.

    - TAX - Stamp duty is usually 5% of the property value (and penalty of 2% every month if not paid)

    - TAX - Registration is about 1% of the property value, subject to a maximum of Rs. 30,000, done within four months from the date of implementation, after the stamp duty.

    - Brokerage is usually between 1% and 2% of the transaction value. More expensive homes usually have a lower % of brokerage.

    - TAX - VAT / Cess is paid by the Buyer and can be levied retrospectively. Check with your lawyer. VAT is paid to cover materials used for construction (which are classified under not-immovable goods). As of April 1, 2015, service tax is charged at 14% on a portion of the sale value, depending on the size and cost of the house. However, single residential units like an independent villa or a bungalow may be exempted from service tax.

    - TAX - TDS (Tax Deducted at Source) the Buyer must deduct a tax of 1% on the entire amount , for properties valued at Rs. 50 lakh or more; this can go up to 20% if the seller doesn’t share PAN details. If payment is in installments, tax has to be deducted with each instalment.

    - Transfer fees and other applicable fees to initiate the Society Share Certificate transfer for a resale property.

    - Legal fees appear as a percentage of the total property value. You can also try to verify the paperwork for a project without a lawyer

    - Floor rise is a premium charged for topmost-floors, quoted in rate per sqft, because of better views, more sunlight, less dust, etc. But, it tends to be warmer and may increase electricity bills.

    - Club membership (gym, pool etc) fees for a lifetime are added to your total cost.

    - Maintenance costs are quoted in terms of rate per sq ft. Developers usually charge a year’s worth of maintenance in advance.

Interior Design

  • Depending on the scope of the project and the complexity of the renovation, the process of interior design takes around 6 to 12 months in total. This includes the design phase of 1 to 3 months and construction of 5 to 9 months.

  • Most designers save a client money. It will rarely cost more to commission a professionally qualified designer for a home than it would to ‘do it yourself’. Discounts passed to clients often outweigh the Design Fees.

    The fees a designer charges often varies depending on the experience, expertise and quality of design. This can ranger anywhere from 5% to 20% of the entire project cost. All Designers charge in different way, some charge by % of project cost, some as per sqft and some as a fixed fees.

    Designers who do not charge a Design Fee but retain the trade discount is not recommended, as the client may receive products where best discounts are available rather than the most appropriate product recommendations for the project. Similar is true for % based fees, where a designer might be biased to select more expensive products.

  • The life of the interiors of a home can vary largely, depending on multiple factors that substantially affect how often you will have to invest in interior renovation. However in the typical lifespan of a RCC construction of 40 years, a family on average would completely renovate their home 2 to 3 times.

    - Building Structure - The life of a RCC construction can vary from 30-60 years depending on the following:

    - Quality of construction - It all begins with the construction of the building, if the builder has carefully followed methods of construction as per regulation and has utilized high quality materials and skilled labor then the life of the construction can be improved by decades. This will also translate into lower maintenance cost the building.

    - Age of the Building - As a building ages it develops various issues, such as sagging beams, water leakages, termite infestation, etc. In many cases these issues cannot be completely mitigated with interior fixes and substantially reduce the lifespan of the interior.

    - Maintenance of Building - A consistently well maintained external facade and terrace can make a building last up to 15 years more. This is where most issues arise, cracks, leakages, termites, etc.

    - Quality of Materials and Hardware - Just like with the building itself, it is also important to invest in quality materials and hardware when making your home. For example, high quality Ply will be less prone to attack from termites overtime, and high quality hinges and runners on doors, windows and drawers will keep them sturdy for longer and require fewer replacement.

    - Maintenance of Interior - Wear and tear is a natural process within all materials and finishes, it is important to take good care of your home to ensure that it can look its best for many years to come.

    - Number of Users and Pets - More users within a home usually lead to more wear and tear of materials, same is true with pets like cats and dogs. Pets will often chew or scratch wooden furniture and textiles, leaving stains or damaging them permanently.

    Keeping these factors in mind, on average an interior in a new building(less than 5 years) would last 15 to 20 years with minimal maintenance and 20 to 25 years with good maintenance. Whereas in an old building (25+ years) would last 10 to 15 years with minimal maintenance and 15 to 20 years with good maintenance.

  • - Designers Fees - This is the fees that a designer takes for designing, this is a service fee and does not include any material goods.

    - Construction Cost - This is the cost for constructing the project, includes Material and Labor Cost and Project Management.

    - White Goods - White goods are large electrical appliances such as fridges, dishwashers, washing machines, television, air-conditioners, etc. These are often not included in construction costs.

    - Decor and Art - Once the construction of your home is near completion, it is time to add some character to your home, this includes, art, sculpture, show pieces, silverware, house plants, books, and much more. Depending on the project, the designer may help you select and curate these goods in your home.

  • Interior renovation is an intricate undertaking, and involves multiple parties whom each have their own responsibilities.

    - Client is responsible for conveying their needs, requirements and aspirations to the designer. Explaining the problems that they think needs to be solved .Making timely payments to ensure pace of work, and taking any necessary permissions from relevant parties.

    - Designer is in charge of understanding the clients needs in order to translate them into a set of technical drawings, required to build a physical space that fits the client’s budget. In addition liaising with the client’s contractors and consultants throughout the project, as well as regular consultation with the contractor throughout the project; providing advice on product installation.

    - Contractor is responsible for sourcing materials and undertaking various methods of constructions as per the designers instructions and specifications, while ensuring all work is done to appropriate standards.

    Larger projects may require more parties to be involved to navigate the technical aspects of luxury products. This may include but is not limited to:

    - Lighting Consultant

    - Sound and Media Consultant

    - Automation Consultant

    - Imports and Clearance Consultant

    - Structural Consultant

  • Only those registered with the Council of Architecture (COA) who have also gained a B.Arch. degree from a recognized educational institution may describe themselves as an architect. The skills include the design of a building structure: how it looks on the outside and how the space is divided within so as to be safe and legally compliant.

    An Interior Designer however is someone who caters to the inside of buildings, create spaces that are attractive, functional, and safe while meeting the specific needs of each client. Through interior design plans, drawings, mood boards, project visualizations and curating a considered selection of Furniture, Fixtures and Fittings required.

  • Absolutely! Everyone who wants should be able to live in nice and comfortable home. But people often don’t invest in interiors for a rented home because they feel that they’ll get stuck, and will not be free to move because they would lose money.

    However in case of a rented home, interior cost can be adjusted as to spend the majority on loose furniture and least on fixed carpentry or walls. This way, when one moves they can take most of their things with them.

Buying a Home

Location of a Home

It’s important to carefully think about where to buy your first home. Your decision will depend on your daily schedule, work location, the need for good schools for your children, and so on. You may also opt for a location with a hospital in the area for medical emergencies. While some people need good access to public transport (metro stations, bus stops, train stations, etc.) others may opt for a quiet neighborhood or with a market nearby. Consider all these factors when purchasing a house.

Types of Properties

If you have decided that you are ready to purchase your own home, the next step is to decide on the kind of home you want. You have a number of options.

  • You can opt for a new house, which means purchasing directly from the builder, development authorities, or cooperative housing societies.

  • If you are not ready to shift immediately, you can opt for an Under Construction home. This gives you the advantage of paying for the home in instalments based on the stage of construction.

  • You could also opt for a resale house, i.e., purchasing a property from existing owners. You may decide to buy a resale house if your priority is the location where there is no new construction, or if you’re budget is lower. However, an older building will have a shorter lifespan and more issues (such as leakages or sagging beams) compared to a brand new construction, leading to higher maintenance costs.

Some people prefer to purchase a plot of land and construct their home based on their specific requirements. However this comes with additional construction permits and costs such as structural construction and foundation, laying fresh water and waste water pipes, laying of electrical conduits, development of the site itself including periphery walls and landscaping among others.

What is Carpet Area, Built Up Area and Super Built Up Area?

  • Carpet area is that area in the flat which you could cover using a carpet. It is also known as the net usable area. According to the Real Estate Regulation and Development Act (RERA), carpet area is ‘the net usable floor area of an apartment, excluding the area covered by the external walls but including the area covered by internal partition walls of the apartment’.

  • Built-up area in a flat is its carpet area, plus the space taken by the walls. The build-up area in a flat also includes other uncovered areas like balcony, terrace, flower beds, etc. This is why the space in a flat would seem larger when it is expressed in build-up area terms. Property taxes in many states are calculated on the basis of built-up area.

  • Super Built-up area is the built-up area of the property, along with the proportionate area of the common facilities in the housing project. These facilities may include the lobby, the lift shaft, the stairs, the swimming pool, the garden, the park and clubhouse, etc.

Before the RERA made it mandatory for builders to sell flats based on carpet area, they widely used the super-built-up area as the space-measuring unit, to cash in on the lack of clarity on space calculation. The use of super built-up area as the measuring unit, helped them to lower the per sq ft cost of the property. It also gave the buyer a false impression that they were investing in a large home when they actually were not.

Site Visit Checklist

Use this checklist so you don't miss anything out on a site visit.

  • Take photos. Try to visit a site during the worst time for a location, like monsoons so you know what is the worst to expect

  • Construction Quality: Check the ceiling and walls for cracks or moisture

  • Interior Quality: Check quality of fittings such as flooring, cabinets

  • Foundation: Cracks on the outer walls point to poor construction

  • Official Inspection: Try to get the results of the last building inspection

  • Lifts: Get a sense of how long you will wait for a lift during busy times

  • Power: Ensure there’s emergency power backup for outage

  • Water Supply: Is the water supply 24/7?

  • Wiring: Turn on each switch to see whether everything works

  • Phone signal: Check whether your signal is clear in all zones

  • Plumbing: Flush the toilets and run the taps to see pressure and plumbing quality

  • Leaks: Check for leaks from the walls, ceilings, under sinks, and on pipes

  • Flood risk: Assess possibility of damage due to flooding. How badly is transit affected?

  • Safety: Does the building have a guard or cameras? Have there been any break ins?

  • Noise: Are the windows facing any busy roads, train stations, schools, airport or temples? Typically more evident on higher floors as sound from further away can be heard.

  • Natural Light: See how well different rooms are naturally lit throughout the day

The Loan Process

Step 1: Apply for a home loan and get the initial evaluation done.

  • Submit application documents with a processing fee

  • Bank evaluation based on credit history and documents.

Step 2: Bank Verification

  • If eligible for a loan, bring your documents to meet a bank official

  • If not eligible, you will lose your processing fee

  • Bank will verify all submitted documents

  • A representative will visit your workplace and residence to cross-check details

  • The property to be purchased will be evaluated

  • The bank will evaluate your repayment abilities

  • If approved, Bank will prepare an offer letter with conditions you should review

Step 3: Bank Approvals

  • Re-read the document, and get a legal opinion too, if you are unsure. There may be points that you can change or negotiate

  • Once you are sure, sign the loan agreement

Step 4: After Signing

  • Submit post-dated cheque

  • The bank will disburse the loan as a lump sum payment (usually for a ready-to- move property) or in installments (for an under-construction flat)

Documentation

Unless you are yourself a qualified expert, you should always look for legal advice from someone who knows about real estate sales. At the very least, you should ensure that these documents are in order:

  • Sale deed (Also called Title deed or Mother deed)

  • Encumbrance Certificate for sale of previously owned properties

  • Power of Attorney if the sale is through someone other than the owner

  • Allotment letter from the builder

  • Building plan and layout plan sanctioned by the statutory authority

  • NOC (No Objection Certificates) from the local Fire Department /Pollution Control Board/Water Works/ Electricity Department/Airport Authority as required

  • Approved plan of construction and construction license

  • Cost estimates and valuation reports

  • Details of payment plans and stages

Hidden Costs

Home buying requires a high level of financial preparedness. In places like Mumbai, Bengaluru, Delhi-NCR and other metro cities, the EMI on home loan is normally very high due to higher property prices. Therefore, if you are financially not ready, then, your whole plan of buying a home could become more stress than celebration. Ensure you are financially ready to not just pay the EMI but also raise the margin money

Here are the regular expenses you will encounter while buying a home: Each month, you will repay the loan by paying an Equated Monthly Installment, an EMI.

  • TAX - Stamp duty is usually 5% of the property value (and penalty of 2% every month if not paid)

  • TAX - Registration is about 1% of the property value, subject to a maximum of Rs. 30,000, done within four months from the date of implementation, after the stamp duty.

  • Brokerage is usually between 1% and 2% of the transaction value. More expensive homes usually have a lower % of brokerage.

  • TAX - VAT / Cess is paid by the Buyer and can be levied retrospectively. Check with your lawyer. VAT is paid to cover materials used for construction (which are classified under not-immovable goods). As of April 1, 2015, service tax is charged at 14% on a portion of the sale value, depending on the size and cost of the house. However, single residential units like an independent villa or a bungalow may be exempted from service tax.

  • TAX - TDS (Tax Deducted at Source) the Buyer must deduct a tax of 1% on the entire amount , for properties valued at Rs. 50 lakh or more; this can go up to 20% if the seller doesn’t share PAN details. If payment is in installments, tax has to be deducted with each instalment.

  • Transfer fees and other applicable fees to initiate the Society Share Certificate transfer for a resale property.

  • Legal fees appear as a percentage of the total property value. You can also try to verify the paperwork for a project without a lawyer

  • Floor rise is a premium charged for topmost-floors, quoted in rate per sqft, because of better views, more sunlight, less dust, etc. But, it tends to be warmer and may increase electricity bills.

  • Club membership (gym, pool etc) fees for a lifetime are added to your total cost.

  • Maintenance costs are quoted in terms of rate per sq ft. Developers usually charge a year’s worth of maintenance in advance.