Owning a home is probably an individual's biggest dream. It is big not only in monetary terms but also in emotional value. Owning a home signifies freedom from landlords and lease agreements, shifting homes every few years, etc. On top of all this, home ownership brings with it a sense of accomplishment and social status.
When home ownership means so much, you must carefully analyse, plan, and execute your purchase decision. If you plan to buy a home from a builder/developer, you need to take care of the following critical aspects:
These are the two broad aspects you need to focus on.
Choosing a good builder who can deliver on your home ownership dream is extremely important. Here’s what you should keep in mind while evaluating a builder:
Naturally, you wouldn't want to risk your home being built by an inexperienced builder. Find out how long the builder has been in business, how many projects they have delivered, and so on.
Merely being in business for a long time is not enough; the builder should have earned the goodwill and trust of customers. Fulfilling promises on delivery, quality, amenities, etc., is important. You should also check if their offers are credible—some builders make too-good-to-be-true promises to attract customers but later back out.
The builder should not be over-leveraged. Check if the project is fully funded or at least backed by a reputed financier. Also, verify whether the developer has ever defaulted on loan commitments, as that would make access to further financing very difficult.
Ensure that your builder is not entangled in legal disputes—whether related to their business or other family/financial matters. Court proceedings can severely distract them from business activities and may result in project delays.
The other important aspect is choosing the right home to suit your needs. Here are some key factors to consider:
The property should be close to places you frequently visit—such as schools, offices, hospitals, temples, etc. It should also be easily accessible by public transport. Check if the area is part of any municipal plans (e.g., road widening, flyover construction) that could lead to future land acquisition.
Where you buy is as important as when. Your surroundings matter as much as your home’s interiors. Avoid properties near garbage dumps, factories, or any areas causing pollution. It should be in a safe neighbourhood with no slums or anti-social elements.
Ensure that the prospective home is well-equipped with basic utilities like piped gas, electricity, and potable water. These are essentials, and compromising on them later may be difficult.
Check the facilities offered within the complex—reserved car parking, security, walking tracks, children's play areas, clubhouse, swimming pool, etc.
This is a crucial factor. You must find properties within your budget. Apart from the base cost, consider stamp duty, registration fees, floor rise charges, maintenance costs, and post-possession expenses. Also, explore discounts, offers, and innovative payment options like 20:80 subvention schemes.
Even if you can pay fully upfront, consider a small home loan for the additional due diligence lenders perform on legal and technical aspects. If a financial institution accepts the property for a loan, it gives you added confidence.
Your choice depends on factors like urgency, cost, and trust in the developer. If you need a home immediately, go for a ready property, though it may be more expensive. Under-construction properties carry some risks (like delay or quality issues) but are usually cheaper. With ready properties, you can move in and begin EMIs sooner, potentially reducing your interest burden.
Once you’ve chosen the builder and the building, it’s time to verify the documents. This is crucial due to the legal implications of improper documentation. It's wise to engage a property lawyer. Ensure the builder provides original copies of the following documents:
The plan must be approved by the concerned authority—panchayat, municipality, or urban development body. Construction must follow this approved plan.
The builder must give you a letter specifying the project name, address, flat number, etc. This is your entitlement proof. Ensure the builder has approval to construct and sell flats.
A written agreement must include flat specifications, terms and conditions, and legal consequences of default. Key clauses like price, delay compensation, etc., must be clearly stated.
If the building is on Collector’s land, a NOC from the district collector is mandatory.
Environmental authorities' approvals are essential for properties in coastal or eco-sensitive zones. Without these, construction is illegal.
The local body issues it after all necessary clearances are in place. It signals official permission to begin construction.
If the land was previously agricultural or designated for other uses, the developer must convert it to residential use. Verify this certificate.
This certificate confirms the availability of water, electricity, drainage, and ready-to-occupy properties.
This is the official document transferring ownership to you. It includes details like your share in the land (UDS), built-up area, cost, access to common areas, etc.
Confirms formal handover of the property and completion of committed work. Must be checked for ready apartments.
Once residents occupy the property, a society is formed. Obtain this certificate, become a member, and collect your share certificate.
After purchase, update ownership with the local authority. Change your address on documents like ration card, Aadhaar, voter ID, passport, etc., and update utility bills.
Note: The list above is indicative. Lenders may require additional documents based on local laws.
Since the real estate sector lacks strong regulation, it's essential to do thorough due diligence. This is a large financial transaction involving your hard-earned money. By being cautious when choosing the builder and building—and ensuring proper legal documentation—you’ll turn your dream of home ownership into a lifelong joy.
Also Read - Home Loan Agreement