Table Of Contents 1. 2. 3. 4. 5. 6. 7. 1. How to buy a flat ?

- Introduction For most people, buying a flat is one of the biggest buys they make in their lif e. It involves a huge amount of money. When you put in so much money, you want t o be sure that you are making the right decisions and not doing anything wrong. That is exactly what this article will help you with. The actual process of buying a flat is not very complicated. Even if you do not understand it, your seller will be more than happy to explain each and every thi ng to you. The difficult part is, knowing that you are not being "fooled" or "co nned" by someone. This guide will give you all the possible tips and tricks you should keep in mind so that you can make your decision wisely. We hope you find it helpful. Please Note: This guide is designed to help people who are interested in buying flats in brand new constructions as well as already existing buildings. Some of the points may not be applicable to you depending on the kind of flat you are bu ying. 2. Choosing your flat - Location! When choosing the location of your flat, you must consider these questions: Is there a daily market from which you can buy fruits and vegetables near-by? How to buy a flat? - Intro Choosing your flat! - Location >> Functionality >> Quality of construction.. About home loans! Legal problems with land!! Actual procedure....

Is there a doctor s clinic or hospital nearby? If you and your family relies on public transport, is there a buss stop, railway station etc. close-by? If you have small children, is there a playground, park, garden etc. close-by? What about post offices, banks etc.? Does the area have proper drainage, sewage and water supply? Is there a regular system for garbage disposal in your area? What about schools, collages, offices? How far are they from the location? What will the daily transport cost be? What is the pollution and noise situation in the area? How is the neighborhood? Is it a safe place to raise children?

3. Is the flat designed to suit your needs? It would be best if you choose a flat that satisfies your needs and also suits y our life style. You could use these questions to guide you: What is the age of the people who will be living in the flat? If they are old, y ou might want to choose a flat that is on the ground floor or first floor? If the flat is on a high floor, is there a lift service available in the buildin g? Does the lift service have a generator backup? If you choose a flat on the first or ground floor, you must consider the possibi lity of floods affecting the area! How are the flats in the society arranged? Is there privacy or can everyone see into your house? When people are talking in the flat next to yours, can you hear it in your flat? This would mean that your conversations too will not be private! How are the windows of the flat arranged? Does enough sunlight come into the hou se? Is there enough ventilation? What are the amenities the society is providing? Are there too many corridors in the apartment? You will be paying on basis of ar ea. Corridors eat up room-area! Ideally, there should be at lest one common toilet so that the visitors do not h ave to enter your bedroom to use your bathroom. The kitchen, dining room and entrance should be close to each other. This ensure s easy serving of food to guests etc Ideally, the building design should include tect against seepage problems! curtain walling . It is required to pro

Check the heights of railings, distance between each railing etc. from the point of view of safety of children. The builder might tend to design the flat such that the bathroom is close to the kitchen. This is done to reduce plumbing costs. But this tends to clutter up th e house and reduces the ventilation of other rooms of the house. Make sure that this is not the case. Try to draw the furniture on the ground and see how much space is left free. Is the house too cluttered? 4. Check the quality of constuction!

It would be a good idea to check up on the quality of construction before you go in for a particular project. Let the following points guide you: You need to check up on the reputation of the promoter , contractor and architect e construction. Visit other projects by them. Try to find problems and faults in their construction by talking to people. One of the most important criteria is the cement being used in the construction. Try to check up often, though surprise visits about the type of cement being us ed. Ask the builder about this? Ask him to explain why he feels the particular c ement being used is the best Check up on the thickness of the external walls. If they are 6-inches walls, it is not a very stable construction. A 9-inch wall is always better. You must ask for a 'performance guarantee' clause or at least a 'structural liab ility' clause in the sale agreement. This will insure that the builder remains l iable for any defect in the building for at least one to three years from the da y he hands over possession to you. Having used all the above given points, let us assume that you have finally foun d your dream house. Now, comes the question of paying for it. Most people will g o in for a home loan 5. Things you must know about home loans! There are many different companies that are providing home loans. There are many different offers and features. How do you decide what loan you should go in for ? To help you answer that, here are a few things you might want to consider . Best way to compare offers: Go to the different institutions providing housing l oans and ask them to calculate and give you the net amount of money you will have to pay over 10-Yrs and the net amount of money you will have to pay over 20-Yrs. W hen we say net we mean that the money includes everything, the administration, pro cessing and all other possible fees. Note all the different rates that all the d ifferent organizations give. This will give you the best idea about the differen t rates. You will also have to choose between a 10-Yr or 20-Yr loan. A 20-Yr loan will me an lower EMI (equal monthly installments) but probably a higher interest rate. I n the long run, you'll be paying more for your house because you will be making more interest payments. With a 10-year loan, the EMI will be higher but the interest rate lower; thus yo u'll pay less for your house because it will be paid off in a shorter period of time. You will have to decide what suites your needs. Find out about ch institution reduce one or institutions. processing fees , administration charges and the quantum of loan . Get ea to provide you with a written statement of all fees. Then, ask to more of the fees. Use the lowest fees you to negotiate with other (Don t be shy. Seriously!) You must negotiate. of th

If a sales person asks you to include false information on your home loan applic ation to get quick approval, do not agree to this. Also don t get confused into bo rrowing more money than you need or can afford.

A lot of Income Tax savings are possible with home loans. The Income Tax saved c an be used to pay the EMI. So do not loose out on the income tax saving oppertun ities. Ideally, you should choose the bank which does not require a "guarantor" and off ers home loans without "pre-payment penalty" (or a penalty for repaying loan bef ore it is due). This helps you re-pay your loan as early as possible. The following documents will be required if you approach an institution with a h ome loan request. Try to take these documents along with you. If you show them t hat you are a serious buyer, they are more likely to be open to negotiations: If you are a Salaried Employee: 1. The latest salary slip showing statutory deductions 2. Form 16 (showing tax deducted at source by employer) 3. Proof of age (birth certificate/voter identity card/passport/school-leavin g certificate/valid driving licence) 4. Proof of residence (phone bill/electricity bill/ration card) If you are Self-employed: 1. Computation of income for the previous two years, certified by a Chartered Accountant 2. Profit & Loss Account and Balance Sheet for the previous two years, certif ied by a Chartered Accountant 3. Proof of age (birth certificate/voter identity card/passport/school-leavin g certificate/valid driving licence) 4. Proof of residence (phone bill/electricity bill/ration card) Choosing "fixed" or "floating" interest rate! Just incase you are not sure about what these mean, let us explain them first. A "fixed" rate would be a rate that would be set right at the beginning when you apply for the loan. Suppose you apply for the loan and choose a pure fixed rate, t hen if the rate of interest is 9% at the time of application, it will remain 9% for the complete period of the loan. This could be good if the interest rates increase during the period for which yo u are paying the loan. This could be bad if the interest rates reduce during the period for which you are paying the loan. But, if you want a safe option, then you should go for this. However, there is another version of fixed interest rates. These are semi fixed . Thi s means that the interest rates remain the same for 3 or 5 years. And at the end of every 3 or 5 years, the interest rates are changed again. If you decide to g o in for fixed rates, be very clear about the kind of fixed rates you are choosing. In the case of floating interest rates, the interest rates change depending on bas is of some other external interest rate. For example, some banks decide the float ing interest rate on basis of their fixed deposit interest rate. And the fixed de posit interest rate generally depends on the market. However, in some banks, the floating rate may depend on some "internal interest ra te" that is not market dependent. This is as good as a fixed interest rate. It wil l just give an impression of a floating rate. So, make sure you know what the float ing rate is dependent on, when you go for it.

Now a days, some banks even allow you to split your loan amount and pay part of it on the fixed and the other part on basis of the floating rate. Ask about this. Al so ask whether there is a way to switch from fixed to floating interest rates in the middle of the tenure. If that is possible, you should be constantly vigilant of changes and make switches appropriately for getting the best rate! Basically, the choice of fixed ch risk you can take. or floating rate depends on your situation and how mu

Keep these few things in mind. If you are not clear about the procedure of takin g a loan, do not worry about that. Just go to a institution, and tell them you w ant a home loan, they will be more than happy to tell you everything you want to know! 6. Check for legal problems... Before you short-list a particular property, you need to make sure that the land on which the property is being built, is free of any legal problems. If you do not do this, a few years down the line, in a Govt. drive to remove illegal prope rty, your home may be destroyed. So it is better to be safe than sorry. The first thing you need to check, is the "permitted use of the land" in the gov ernment records. Land CANNOT be used for real estate, unless it is "buildable" l and as per government records. You should ALSO get your lawyer to find out from the land registration office wh ether the land has been sold or mortgaged to other parties, or whether any other fact has been left undisclosed by the owner of the land. If the land area is more than 500 sq. m. check with the builder on whether he ha s obtained the "ULC Clearance" for development on the land. Make sure that all the required property taxes to the municipality departments a re properly paid and up-to-date! Ask the builder to provide you with the receipt of the latest tax payments to make sure that they are being payed. Inquiries should also be made in various departments of the municipality to find out whether any notices or problems relating to the property have been issued a nd not yet satisfied by the builder. Finally, it should be checked whether the p roperty in the name of the seller according to government and municipal records. Any land that is clear from all these issues mentioned above would be an ideal s ite for building. There is a simpler way to go about all of this investigation. You see, most muni cipal authorities seek "clearances" and "no objection certificates" from the rel evant departments before sanctioning a building plan. So, if a promoter/builder is able to show you a sanctioned building plan, this could indicate that the lan d is free from legal issues. However, of course, some bribery etc.. may have bee n used to obtain the sanction of the building plan. So to be really sure you sho uld investigate yourself. But, if you do not want to take the trouble, at least ask the builder to produce the sanctioned building plan!

7. Actual procedure for buying a flat! Finding out how much the flat will cost you... Flats are generally priced on basis of area. But, how much area? What area? We s hall discuss the way this area is calculated and how flats are priced here... Saleable/ super built-up area: Carpet area is defined as "the net usable area me asured from the inner faces of wall to wall". However, the trend nowadays is to calculate area on the basis of built-up area or "super built-up/saleable area". Built-up area is the net area of a flat, including space covered by the wall thi ckness. This is generally 15% more than the carpet area of a flat. This are also includes the "common spaces area". There are two types of "common spaces" area: 1. Common Spaces on each floor 2. Common spaces in the building Common spaces on each floor: The staircases, lobby, lift, etc. on the floor are to be divided "proportionatel y" among the flats on the particular floor. For example, a building may have fou r flats per floor with different built-up areas. The built-up areas of the four flats may be 1000, 2000, 3000 and 4000 sq. ft. It means that the proportionate s hares of floor space among the four flats are 10%, 20%, 30% and 40%. Now, if the area of staircase, lobby, lift, etc., is 100 sq. ft. then it should be shared among the four flats as per the proportion of floor space enjoyed by t hem. So, out of 100 sq. ft., 40 sq. ft. goes to the 4000 sq. ft. flat, 30 sq. ft . to the 3000 sq. ft. flat and so on. Therefore, the gross area of the four fla ts on a floor becomes 1010 sq. ft., 2020 sq. ft., 3030 sq. ft. and 4040 sq. ft. respectively. If this is too complicated, just remember that if you have a bigger flat, you ha ve to pay for more of the common space on each floor. If you have a smaller flat , you have to play for less of the common space on each floor. Common spaces in the building: Every apartment building must have a lobby, a staircase, a pump room, an electri cal room, etc., at the ground level. There must also be one or more stair-room a t the terrace level and sometimes, also a lift machine room. All these areas sho uld be proportionately divided among all the flats. So, "Super built up area" = built up area + common spaces on each floor + common spaces in the building all together! Now, generally, when calculating the cost of the flat, you are charged on the ba sis of per square feet of super built up area.

Other costs... You will have to pay a "stamp duty" of 6% to 12% of the total cost of the sale. Besides that, you will also have to pay around 1% as registration fees. All thes e will increase the total cost you pay, so they must be considered.

There will also be "maintainance costs", hings. So, when calculating how much you e things. Also when negotiating with the things and ask the seller to give you a olved. After everything else is done....

property taxes...and can afford to spend, seller, negotiate on complete break up of

many other minor t calculate all thes the basis of these all the prices inv

After you find out how much the property costs you, after you negotiate over the price, it would be a good idea to take down all your negotiations "in writing" from the seller. If the seller has promised certain things like parking, a certa in rate per square foot etc., take all that down in writing. Do not rely on the "seller's promise". The next step is to prepare the "agreement of sale". Basically it is a agreement that covers everything you have negotiated and decided and other legal formalit ies... If the seller insists on drafting the agreement, get it checked properly by your lawyer. There may be certain loop holes in the agreement because of which you m ay end up in trouble. You could also draft the agreement though your lawyer. Onc e the agreement is ready and accepted by you and the seller, you need to officia lly get the flat to be transfered to your name though the "registration" of the agreement though the Govt. Sub-Registar in your city. Pay the money and the flat is yours. This process is a little more "long-drawn" than it seems by reading the above pa ragraph. However, it is not too complicated and you can easily ask your lawyer t o help you with the process. What is more important is that you keep in mind the points discussed in the previous pages about the choice of flat, home lones etc . Best Of Luck! Jai Hind!