Navigating the Home Buying Process for First-Time Buyers
Buying a house in Mumbai is a dream for people from all across the country. But buying a residential property in the city of dreams is not a simple task. There are various steps involved ranging from selection and decision-making to waiting for approval of the home loan. If that does not sound draining enough, choosing the right locality and understanding the socio-political and economic factors is very important before buying a home in Mumbai.
But worry not, this blog will navigate you through the home-buying process in Mumbai in detail. By the end of this blog, you will feel much more confident about your decision to buy a home in Mumbai. So without further ado, here’s a detailed home-buying guide for first-time buyers!
Deciding The Locality
Deciding the locality is the first and foremost step in the home-buying process. Do you wish to live near nature or do you want a posh, urban living? Do you want to live near the beach or would you prefer the hills? Mumbai has a varying landscape and it differs vastly even in short distances. And hence it becomes very important to decide on what locality you would want to live in. Here are some pointers that you might want to consider.
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Neighborhood & Safety
Keep in mind that you and your family will be residing in this new house. So, of course, safety must be your top priority. Look if the neighborhood matches your desired lifestyle. Make sure you do background checks about the locality. This has become very simple due to the boom of the real estate industry on social media and the internet as a whole.
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Connectivity
Next up, you need to make sure that you have enough connectivity. Of course network coverage is a must but the kind of “connectivity” we’re talking about right here is a different thing. Here, connectivity refers to the availability of means of transport and public transportation more specifically. It is much better if the locality offers multiple means of public transport like railways and roadways too. In simple words, make sure that the public transport stations are not far away from your home. And if they are, it will greatly affect the prices of the property.
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Development
While the current location matters a lot when choosing a place to live, the rate of development affects the price and lifestyle too. How? Well, the answer is simple, the more infrastructural development your locality gets, the more suitable it is for residential purposes and the more increase it will see in prices.
Defining The Budget
The next step is defining your budget. This means understanding the amount you can spend, which includes the amount you can get on credit, the amount you can pay upfront, and the amount you have in your savings account.
Two major things that you need to know are:
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Home Loan Eligibility
Yes, this is the first thing you will need to ascertain when planning to buy a home. Your eligibility and limit for a Home Loan is something that will affect your budget a lot. To be eligible for a home loan, you need to have a stable income source and a good credit score (above 750). But there are many factors that influence your eligibility. You might want to discuss it with your bank.
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Other Costs Involved
Now coming to the other costs involved in buying a residential property. If the property you are interested in is still under construction, you will need to pay 5% GST if the agreement value exceeds 45 Lakhs, otherwise 1%. But if the construction is completed and the project has received its Occupancy Certificate or OC, you do not have to pay the GST.
Then comes Stamp Duty and Registration, which is usually 6% of the property’s total value. But you might also want to consider the lawyer’s fees which are about 1-2% of the value. Other costs that are to be considered involve the home loan processing fees, parking charges, and brokerage fees.
And that covers basically a majority of the costs involved in buying a home. Further, you will need to plan what kind of property you want to invest in.
Kind of Property
The final thing you need to decide before actually start hunting for properties is the kind of property you want to invest in. There are basically two kinds of residential properties that you can buy in Mumbai. Under Construction and Ready to Move. Both have their own different sets of pros and cons. Let us look at them.
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Under Construction
Any residential property that is not ready to move in at the time of buying is known as an under-construction property.
Some of its pros are Lower Prices, Space for Customization, Value Appreciation, Newer Construction, and Potential for Future Income.
Coming to the cons, include Chances of Delayed Possession, Uncertainty of the Quality of the Build, Other Unrealized Additional Costs, Risk of Cancellation, and Changes in Market Conditions
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Ready to Move
As the name suggests, any property that is ready to move at the time of purchase is known as a ready-to-move property (It is to be noted that a project is “ready-to-move” only when it has received the CC or Completion Certificate). This might be an alluring choice for home buyers as there is no risk of uncertainty, but the prices are higher than under-construction projects.
Some of its pros include Instant Accessibility to Home, No Uncertainty in Delivery, No GST, and a Feeling of Assurance because a neighborhood already exists.
Now talking about the cons, we have Relatively Higher Costs, Uncertainty about the age of the Property, and Absence from RERA (If the project was completed before 2016).
That covers all the prerequisites. Now it's time to look at the most important step in the actual home-buying process.
Selecting the Developer/Builder
Now, arguably the most important step in buying a home - selecting the developer.
Selecting the right developer is extremely important because it directly impacts the prices, neighborhood, and standard of living. A good developer will ensure that the people around you are good and this will help create a safe neighborhood.
So, how to recognize a good developer? Well, just look at these two factors:
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Track Record and Reviews
Look at the reviews of the developer, both online and offline. Visit their projects and have a look at the property and neighborhood for yourself. Also, consider the track record of the developers, the promises they make, and how many of them they actually stand up to.
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Past Delivery Times
Next up, look at their past delivery times. If you are interested in an under-construction property, this is a necessity. You must always look up the delivery times and make sure that there is a negligible delay.
And that’s about it! This was pretty much the process of home buying for first-time buyers. Of course, there are major steps like payment and possession which are not included but there is nothing much you can do about it. It is all done through your agent who will guide you through the process.
And finally, if you are a first-time buyer and you are looking for lavish residencies in Mumbai, you should check out Shagun Realty. We offer lush homes with ample amenities and services that make you feel at home!
