Manish Kumar, 5th-Year, School of Law,LPU Student has written this article”First Time Home Buyers”
Introduction
Buying a home for the first time is a huge milestone that many people dream of achieving. However, it can also be a daunting and overwhelming process. There are a lot of things to consider, from finding the right neighbourhood to securing financing. A First time home buyer has many apprehensions & addressing those is important. Let’s navigate through an easy guide for first time home buyers. Superficially, it seems that if you have a good amount of money, it’s just about finding a home and investing, but there’s a lot more to it. Of course, money is the main reason for property investment & without this, one cannot think of buying a home.
Yet, with the money in hand, one must also be well-informed about the market. Stay updated about the entire procedure, present rates, including finding the right home, location, neighbourhood, amenities etc. Buying a home is the right financial investment. However, when you decide upon purchasing, you may need to be more flexible, have a stable career and consider family ideas & values.
Before we dive further into steps, I would like to point out the benefits of owning a home that includes;
- Tax benefits
- Making wealth
- Financial stability
- Variable property
To help make the process less stressful, we have compiled some tips for first-time homebuyers.
Determine Your Budget:
Before you start looking for homes, it’s important to determine how much you can afford to spend. Consider your income, expenses, and lifestyle to determine a comfortable monthly mortgage payment. Remember to include expenses like property taxes, homeowner’s insurance, and maintenance costs.
Get Pre-Approved for a Mortgage:
Pre-approval for a mortgage will assist you in determining your budget and demonstrate to sellers that you are a serious buyer. A pre-approval letter from a lender will also give you an advantage when making an offer on a home
Work with a Real Estate Agent:
Working with a real estate agent can make the home-buying process easier and less stressful. A good agent will help you find homes that fit your criteria, negotiate on your behalf, and guide you through the closing process.
Verify the property through RERA regulations:
Check if the property is registered under RERA (Real Estate Regulatory Authority) and verify the RERA number online by visiting the official website[1].
Make a list of Must-Haves:
Make a list of the features that are most important to you in a home, such as the number of bedrooms, bathrooms, and living spaces. This will help you narrow down your search and make the process more efficient.
Attend Open Houses and Tours:
Attending open houses and home tours can help you get a better idea of what’s available in your price range and preferred location. You’ll also get a better sense of what you like and don’t like in a home.
Do not Skip the Home Inspection:
A home inspection is an important part of the home-buying process. It can uncover any hidden issues with the home and help you make an informed decision about whether or not to purchase the property.
Do not Be Afraid to Negotiate:
Once you’ve found a home that you love, don’t be afraid to negotiate on the price. Your real estate agent can help you make an offer that is fair and reasonable based on market conditions and the home’s condition.
Buying a home for the first time can be an exciting and rewarding experience. By following these tips and working with a trusted real estate professional, you can make the process less stressful and find the home of your dreams.
Laws related to buying homes
Laws related to buying a home vary depending on the location, but there are some general laws and regulations that apply to most home purchases. Here are some key laws related to buying a home:
Real Estate Disclosure Laws:
Most states oblige sellers to reveal any known defects or problems with the property, covering issues like structural damage, water damage, or mold, and they must provide these disclosures to the buyer before completing the sale.
Property Transfer Laws:
When you buy a home, you’ll need to transfer ownership from the seller to yourself. This involves completing a legal document called a deed, which transfers the property from the seller to the buyer.
Mortgage Laws:
If you’re taking out a mortgage to buy a home, there are a number of laws that apply to the process. These include laws that govern the type of information lenders are required to disclose to borrowers, as well as laws that protect borrowers from predatory lending practices.
Zoning and Land Use Laws:
Zoning laws regulate how properties can be used and developed. For example, a residential property may not be used for commercial purposes without a special permit. Land use laws may also regulate issues like building height, setback requirements, and parking.
Fair Housing Laws:
These laws prohibit discrimination based on factors like race, ethnicity, religion, and gender. They apply to all aspects of the home-buying process, including advertising, lending, and sales.
Homeowner Association Laws:
If you’re buying a home in a planned community or a condo complex, there may be rules and regulations that apply to homeowners. These may include restrictions on things like pets, parking, and exterior modifications to the property.
Legal papers:
When it comes to buying a home, it involves a series of documentation formalities. Once all the negotiations are concluded, the next step is to sign the contract/agreement papers. Any required modifications or additions such as waiving a certain fee or proposing a purchase subject to loan sanction can be facilitated by the real estate agent as special proposals. During the signing of the property papers, it is crucial to verify the authenticity of the documents and ensure that all the essential clauses are included. However, sorting out the legalities involved can be quite challenging, and therefore, approaching a lawyer would be the right decision.[2].
It’s important to work with a trusted real estate agent and/or attorney who can help you navigate these laws and ensure that you’re making a legally sound purchase.
As the house owner, you can deduct your once-a-month mortgage interest and get rid of the property taxes. It’s learnt that other costs involved in home buying are also tax-deductible. Advisable to contact the tax professional to understand & get more details on what tax benefits you can avail.
Growth equity and appreciation is the two-way form of building your asset(wealth). People who have the cash to invest in the property and do not require loans end with a smooth & steady process. You get to access the property fully in a defined manner. So, strategizing is key in the home buying process.
Growth equity
It occurs as and when you make payments on your mortgage. So, as time goes by, your outstanding loan amount will get cleared as you make payments(monthly-wise) and your equity in your property rises.
Appreciation
It is the value of the home (property) in the future &, at present, an entity to live without having to pay rents. Factually, there is always a hike in the real estate market with time. It is never a downtrodden investment. Additionally, if you remerge the appearance of the same home with some upgradation/remodelling, the value of your home multiplies.
As mentioned, homeowners earn financial stability over time. Even if you apply for a home loan, you can make monthly payments, and interest rates will be fixed.. As the salaries increase yearly, you can fill the gaps (loan implications), plan and increase your wealth.
For detailed article on “The arrival of RERA & its benefit on the Indian Economy”: Click here
References:
- Times of India – Essential Tips Before Buying Or Investing In A Property
- Investopedia – Buying your first investment property top 10 tips
- Bankbazaar – 8 steps guide to buy new house
- Image source – Freepik.com/free-photo/real-estate-agent-with-house-model-keys_5519370.htm
[1] https://www.mahindralifespaces.com/blog/9-tips-for-first-time-home-buyers/
[2] https://www.gharoffice.com/blog/ tips-for-first-time-home-buyer/
Leave feedback about this