7-Steps to Buy A House In India - Ultimate Guide

While a property purchase involves a lot of excitement, it’s crucial to be on the right track throughout the process. Of course, you would be enthusiastic about the new milestone in your life and are bracing up for probably the largest investment you have ever made. Are you aware of the steps involved in buying a home in India? If not, this methodical guide should help you understand the process. 

In India, the real estate industry offers plenty of investment opportunities. The dynamic real estate market might seem overwhelming with too many options. Once you know how to buy a house within your budget, you can proceed with the investment.

This home buying guide comprehensively evaluates the plethora of choices, financial considerations, and legalities for your convenience.

How to Buy a House in India? A Complete Home Buying Guide

 There’s no denying that most buyers carefully weigh the decision of purchasing a house as it seems daunting, considering the massive investment involved. However, you need careful planning to bail you out of these challenges. Let’s have a look at the key aspects you should consider while buying a house in India.

1. Make Your Budget Realistic

In the first place, potential homeowners need to create a budget. Evaluate your finances and plan how you are going to manage the down payment and EMIs. Apart from the cost of the property, buyers should factor in the cost of interior design, decorations, and maintenance over the years.

A realistic insight into your financial commitments will help you come up with a proper budget. It’s wise to have adequate savings before buying a property. Consider saving for around 15% to 20% of the property cost that you would be paying as the down payment. After calculating your ongoing living expenses, find out how much you can afford for the EMIs. 

It’s advisable to use an EMI calculator to ensure that you remain within your affordability while purchasing the property. Remember, you need to add this EMI to your monthly expenses.

2. Choose the right location

The location of your new property is a crucial aspect that defines your lifestyle and convenience. Before you start searching for the locality, consider the civic amenities your family members would need. For instance, if you have kids, make sure to buy your home in an area with plenty of reputed schools around.

Likewise, consider your lifestyle and choose a location close to prominent healthcare institutes, markets, shopping malls, clubs, restaurants, or other specific interests. 

In case you are a working professional, choose a locality with strong connectivity to your office. Before buying a property, think of a locality from where you can seamlessly get across to commercial zones, places of recreation, or shopping zones.

3. Consider the Property Market

 Have you considered the growth trajectory of the real estate market where you would be buying a home? Check out the market insights and price trends to make an intelligent decision. This way, you can identify areas where property prices are likely to escalate in the near future. Investing in such properties will maximize your returns as you ride the growth of the property market.

If you are planning to put your new property on rent, consider the average rental income for owners. Consult developers or property brokers for accurate trends, since they are more familiar with the ongoing rates. 

What if you end up buying a house somewhere with a low demand for rental property? With adequate research, you can make an informed decision.

4. Check Your CIBIL Score

As you reach out to a bank for a home loan, the lender would like to know your financial stature. So, check out your CIBIL score after obtaining a credit report. Remember, your CIBIL score largely determines your eligibility for home loan. Having a healthy credit score can also help you obtain a low-interest loan.

Credit bureaus collect your financial information like ongoing loans, repayments, defaults, number of credit cards, etc. from different banks and NBFCs. Based on these details, they prepare your credit profile. With a strong credit profile, you can easily qualify for a home loan. 

Lenders prefer homeowners with a credit score above 750. In case your credit score is below 600, the chances of obtaining a home loan are thin. In this case, try to clear your outstanding dues and make timely repayments to improve your credit score.

5. Save for the Down Payment and EMIs

Before buying a house, it’s crucial to make adequate savings to manage the down payment and pay your EMIs. Even before you apply for your home loan, start saving for the down payment. Besides, you need to pay a property registration charge, which can be as high as 6% of the cost of the new property in some cities. It’s wise to plan your finances and have substantial savings to facilitate a seamless property-buying process.

Even after accumulating adequate funds for the down payment and property registration, consider saving for buying furniture and interior designing. Once you have a substantial amount in hand, you can comfortably pay your EMIs.

6. Look Out for Reputed Developers

While buying a house, it’s imperative to evaluate the profile of the developer before you finalize your decision. With several reputed builders operating into the property market in India, it’s crucial to choose the right one.

In case you are investing in a new launch or ongoing project, check out the previous projects from the developer. Find out whether or not they had been delivered within the stipulated timeframe. When it comes to making such a crucial investment, you wouldn’t like to settle with a sub-par developer, right?

Besides checking the developers’ reputation, evaluate the range of amenities they would be integrating in the project. It’s wise to reach out to some of the ‘Grade A’ developers for higher quality. Before discussing your requirements with them, prepare a non-negotiable checklist of amenities. For instance, you may want to reside in a gated community with a clubhouse, swimming pool, and gym. Also, it’s natural to buy a home in a community where you can reside with like-minded members around.

7. Adherence to Legal Standards

The last thing you would want is to run into a legal dispute while buying a property. It’s recommended to buy your new property from an established developer to keep these legal hurdles at bay. Moreover, consult a reputed property broker regarding the documentation and legalities. They might recommend hiring a lawyer as you transfer the property deed to your name. 

A reputed developer or property broker will help you comprehensively during the property-buying process. Besides providing you with all the necessary information, they can help you during the registration process or coordinate with bankers for loans.

Why should investors purchase a new home now?

Now that you know how to buy a house, let’s understand why investors are willing to purchase properties in India. Statistics reveal that over the last decade, the real estate industry in India has demonstrated an impressive growth trajectory. Between 2023 and 2028, the property market in the country is projected to grow at a CAGR of 9.2%. Considering the high return potential from the industry, buying a property early will be a great decision.

Established builders are coming up with new projects under different categories in top cities and suburban areas. These projects appeal to homeowners with upgraded amenities, eco-friendly features, and an elevated standard of living. Moreover, the government has come up with several tax-saving schemes and benefits for property owners. All these factors have led to the growth potential of the property market in India.

How to decide the right time for buying a home?

While buying a home, it’s imperative to factor in several aspects to decide the right time to make the investment. Have a look at the common conditions that point towards a favourable period for purchasing a property.

Lower rates of interest

Considering the massive home loan you need to purchase a property, it’s wise to apply for financing when interest rates remain low in the market. This makes the ownership process of your property more affordable as favourable interest rates translate to lower EMIs.

Stability in the Property Market 

Now that you are eyeing better returns on your property investment, purchase your new house when the market remains stable. This ensures that property prices will keep escalating in the coming years, and you can expect better rental returns from the home. It’s wise to invest in a property market when the price trend goes upwards.

Favourable Economic Conditions

It’s wise to factor in other economic conditions in the country while investing in the property market. Consider employment rates, job growth, and lower poverty levels while making the financial decision. Often, robust confidences in other sectors translate to a stable property market.

Incentives from the Government

In recent years, the Government of India has rolled out several incentives for property buyers. Before buying a house, check out tax reliefs, incentives on home loan interests, and other benefits available from the government in your region.

Family Planning

 Are you planning to start a family soon? Consider your life goals before you purchase a property. Make sure to gain stability in your career before you plan to buy a home.

Long-Term Stay

In case you are buying a home to stay in the locality for a long time, you can benefit in terms of capital value appreciation of the property. Accordingly, you can carry out realistic financial planning for the long term.

Better Negotiation Power

When you purchase a property in a buyer’s market, you can benefit from better negotiation power. Investing at a time when the available inventory exceeds demand, you can settle for a better price and take advantage of more favourable terms. Sellers often offer additional concessions during such periods.

Considering these aspects, it would be a wise decision to purchase your property in India now.

Conclusion

In this home buying guide, we have comprehensively discussed the essential steps to buy a house in India. Besides, you know what to consider while buying a property and why investors are keen to invest in the property market in India now.

With a comprehensive understanding of how to buy a house, you can now set your budget and look out for a reputed developer. Consider choosing a strategic location for your new home that aligns with your lifestyle. Once you are stable with your finances, reach out to one of the banks for a home loan and finance your property.