Recently, I bought an apartment and while doing so I faced a lot of troubles until redeeming it. Hence, as a blogger here I am writing about my dwellings, the problems I faced, the rectification I made, notes scribbled, the fuels I burnt, the papers I juggled, and whatnot. While buying a property, I hope this blog content might be helpful to you all. Thank you.
In this financial-centric world, you need to have good financial planning to succeed economically. Financial planning sums up to a process where a person can draw a roadmap to meet expected and unexpected needs in his/her life. The process involves assessing one's net worth, estimating future and financial needs, and working towards meeting those needs through proper management of finances. Investment planning is one of those areas which determines suitable investment practices and asset allocating strategies based on risk, time, and goal sets.
Having an apartment is an essential asset and the big investment must be planned properly. Here is the step-by-step plan for buying a flat or apartment. The order of steps may vary from consumer to consumer but the basic buying algorithm will always hold within all these points. Do take a notepad and write down all the bulleted points along with your desired input aside from it.
1. BUDGET-
This is the investment amount you need to set under which range you will be buying the apartment. The minimum and maximum amount range will give you a specific and filtered outlook to search for such properties which will fall within the range. You will also need to decide the purpose of the investment, i.e. Is it for the purpose of a permanent residence or just for a side investment to generate rent or so. By mentioning this, your perspective will be roughly sorted in terms of quality (Interiors, Furnishing, Accessories, etc.) and quantity(Carpet Area, No of bedrooms, size of rooms, etc.). If you are looking to opt for a housing loan, do compare the interest rates of different banks. For more vivid information and help, you can also contact the relationship manager of your respective bank.
2. PROXIMITY-
In this context, proximity means closeness to a certain place in terms of distance. Suppose your family has two school-going children, your one of the priorities must include the distance of your apartment from the school they are in or the nearby schools where they are going to be admitted. So, while buying flat proximity is considered one of the important factors. Now, coming to the categories of proximal areas, you should see educational spots, workplaces, health care areas, shopping locations, and connectivity/transportability broadly. For a businessman, the choice of proximity would similarly vary according to his potential profit areas and development.
3. LOCALITY-
Your choice of the locality may vary according to your culture, health, environment, vicinity, neighbor preferences, ambiance, etc. Proximity is into measurements whereas locality is more related to physical, mental, emotional, and social well-being. Your preferences are to be noted down in this section, which will give you peaceful positive vibes and boost your outlook and output. You need to choose 2 or more localities taking proximity and budget into account too. Write them down and start searching for apartments in these areas. Also, consider nearby areas as per availability and cost.
4. SPECIFICATIONS-
Let us assume you have chosen the locality where you want to find your dream home. Then comes the specifications of the apartment/ house you want to buy. Based on your requirements, you need to select one from the lot by considering the area of the house (sq. ft.) (carpet area, built-up area, super area), no. of bedrooms, living area, no. of bathrooms, type of kitchen (Open or closed), No. of balconies, the direction of the entrance, etc., etc. This defines the whole specification of the house you are going to buy. Vaastu plays a very important role while looking at the specifications of any house. The age of the construction is also a strong specification to choose your house. The age decides whether your house is an old construction ready-to-move type resale apartment or a new one going to be constructed and is yet to handover. If you are choosing an old house, you need to check how the house is being maintained, are there any cracks or seepage occurring at the walls, the proper functioning of sanitary wares and plumbing, the exterior and interior coloring of the house, proper working of electric wirings and switchboards, etc. If anything is found faulty it is needed to be informed to the house owner for proper treatment or repairing.
5. FACILITIES-
When you buy a house, you also look for different facilities available with it. Like if you are buying a duplex or an apartment you look for safe premises with proper security arrangements. The basic facilities include proper electricity with a separate meter box, 24 hrs. of water availability with a water treatment plant for filtration, proper sewerage and respective treatment plant, proper fireproofing systems, dedicated two-wheeler, and four wheeler parking, etc., etc. Similarly, if you are lenient towards luxury, you look for facilities like the greenery on the campus, children's park area, Gym area, swimming pool, inside market complexes, etc., etc. And yes with all this variety of facilities comes a maintenance fee. Please collect all the information regarding this fee and how it is to be paid from the apartment supervisor or any other concerned person.
Here's a list of facilities generally offered by an apartment.
1.Security Services.
2.Gym
3.Terrace access
4.Parking area
5.Society hall
6.Swimming pool
7.D. Generator
8.Children’s park
9.Green corridors
10.Water TP
11.Sewerage TP
12.Fire protection
13.Lift
14.Camera Surveillance
15.Club house
16.Sports room
6. LEGALITY-
The legal aspect of the apartment is a must to be checked upon. Check if the owner provides you the sale deed. Read the deed carefully. Issuing an encumbrance certificate from the office of the Tehsildar gives you all the information needed to clarify the authenticity and legality. If there's any dispute in the ownership, you can directly know it all by simply taking out the EC. Look for revenue clearances and municipal clearances too. They can also help you to determine the authenticity of the records.
Here's a list of legal documents useful while buying an apartment.
1. No objection certificate (from builder/ society committee/ RERA/ FEMA)
2. Sale deed
3.Water bill
4. RERA certificate
5. Encumbrance certificate
6. Builder Buyer agreement
7. Occupancy Certificate
8. Floor plan drawings
9. Loan documents (if any)
10. Completion Certificate
11. Electricity bill
12. Property Tax Document
To look for RERA-certified projects, you can just collect the Realestate company registration number and the project name (apartment name in most cases), then go to the Official state-wise published RERA websites. For example; If you want to check RERA-certified projects in Odisha, go to the O-RERA website (https://rera.odisha.gov.in/registered-projects/) and insert the registration number and project name. You can see the status of the project instantly.
The Builder buyer Agreement or the agreement of Sale is an agreement made by the promoter/ builder/seller and the buyer/ customer which contains the time of project start and completion, buyer's right to cancel or assign the property, refund policy, grace period to be taken by the builder(if any), force Majeure clause, property specifications, facilities to be provided, all fees, and charges, payment timeline, mode of payment, property particulars, advance, and final payment details, etc. You can consult a lawyer to draft your agreement of sale. You can also draft it by yourself by referring to the file format provided by the registered RERA website.
If you want to buy an apartment in Odisha, I have also shortlisted all the important websites to visit in the blog, link provided below: Websites to look upon while buying an apartment in Odisha.
7. COMPARISON CALCULATION
Before comparing in between two apartments, you need to know some technical terms for ease of calculation. The technical terms are built-up area, carpet area, common area, super built-up area, loading area.
Briefly describing the terms as follows:
Built-up area: It is the total area visible inside your flat including the area covered by the walls (computed as 50% is shared with the adjacent flat), columns (computed as 50% is shared with the adjacent flat), balcony area, and roof or terrace area.
Carpet area: If we simply go by its name, it is that area where you can lay down a carpet inside your flat. All the visible interior area comes under the carpet area excluding the walls, columns, roof, balcony, verandah, etc. However certain percentage (10 to 20%) of the balcony, roof/ terrace, or verandah is also included in the carpet area too. It values approximately 60 to 80% of the super built-up area.
Common area: These are the common spaces, sharable to every flat owner of the apartment. Areas like the staircase, lift working area, Lobby or corridor, lift machine room, electrical power supply room, generator room, clubhouses, security rooms, sport rooms, community hall, gym, general toilets, rooms of maintenance staffs, and security, etc.
Super built-up area: It can be defined as the sum of the built-up area and the common area in the most simplistic way. It is also called the saleable area which is sold by the builder/ owner to the customer. However, it doesn't include the area falling under the sump and septic tank, compound wall, open walkway or corridor, open greenery, parks, or open-air swimming pool.
Loading area: It is the difference between the super-built-up area and the carpet area. It includes the common area as well as parts of the balcony and terrace or roof. Generally, a 30% loading area is included and is being taken into account with a 70% carpet area to make up a 100% super built-up area. The result can determine the difference in carpet areas of different apartments with different loading factors.
Simply going to an example of calculation:
Let's say you have shortlisted two different apartments to purchase with the same super built-up area of 2000 sq. ft with different prices per sq. ft i.e the 1st one is Rs.2500 per sq. ft. and the 2nd one is Rs. 2,200 per sq. ft. A common man would definitely choose the 2nd option as the price of the 1st apartment is 50 lakhs and that of the 2nd apartment is 44 lakhs. But if there's a difference in the loading factor, the carpet area's value may differ drastically.
Let's say, the loading factor in the 1st apartment is 30% i.e. 0.30 and in the other one, it has 40% i.e. 0.40. So the carpet area of the 1st apartment will be ((1-0.3) x 2000)= 1400 sq. ft. and in the 2nd carpet the carpet area will be ((1-0.4) x 2000)) = 1200 sq. ft. Hence, we can see that the 1st apartment has a higher value of carpet area. And if we calculate the value of price per sq. ft. in terms of carpet area, the 1st apartment will have a price/ sq. ft. of (50,00,000/1400)= Rs. 3,571.45 per sq. ft. whereas in the second case it will be (44,00,000/1200)=Rs. 3666.66 per sq. ft. Therefore in this case choosing the 1st option will be a good deal rather than choosing the second apartment.
Ahh! Alas, after settling all these bulleted points you are ready to buy an apartment. For further simplification, I have attached a form here. You can just download it, take a printout of it and you are ready to hunt for your dream apartment.
Checklist to buy an apartment: DOWNLOAD
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