Home buying tips: What homebuyers should keep in mind while buying property in Covid times

The Indian property market is seeing some brisk buying. According to a report by PropEquity, home sales rose by 21% across top-7 cities in India in the first quarter of 2021 to 1,05,183 units versus 87,236 units during the same period in 2020. The increase in sales between January and March 2021 has happened despite rising Covid-19 scare and the disruption caused by the pandemic.

Also, stamp duty cut in some parts of Maharashtra has revived the real estate markets. Mumbai and other regions saw heightened sale of properties – both new and pre-owned. Property prices in these key real estate markets are off their lows. Are you having the FOMO as you see others sealing their home deals? Rushing into a home purchase can be a wrong move.

Here are five things you should keep in mind while entering into a property deal while the second wave of Covid-19 rages:

Don’t buy because others are buying

Many high ticket home buying took place in December 2020 to March 2021 period. It is nice to read a celebrity or a big industrialist buying a nice home in up-market areas. These deals run into crores of rupees and they may have deep pockets to pay for it. Besides celebrities, your friends and office colleagues may have bought a house in recent past. However, they would have done it after adequate planning and not rushed into a deal.

Do your own due diligence

If you buy one without doing your homework then you may end up with a bad deal, both in terms of price and location. You also run the risk of buying a property from someone who may not have a clear title. Also, if you handover the token amount without checking your credit score or the bank’s willingness to fund the property and if you cannot arrange home loan later, you will be in trouble. Covid-19 has caused many banks to slow down lending activities. You should get all the necessary loan approvals before finally agreeing to the pay the upfront amount.

Don’t get swayed by ‘discounts’

Cut in stamp-duty or a discount on offer by a developer to attract buyers in the Covid-19 stuck market does reduce the price of the property. However, these discounts may not be of much consequence. A 5% cuts in price does not really make a property ‘affordable’. You have to figure out if the property on offer suits your needs.

Do not borrow too much

To fight Covid-19 pandemic, we have seen severe restrictions on economic activities. This has caused economic slowdown, and to counter that we have seen massive cuts in interest rates. However, they are not going to be permanent. Just because the interest rates are low, do not over-borrow and go for large properties. If the interest rates move up in due course, you may find it difficult to service the home loan. These are uncertain times and you should factor in the possibility of job loss or salary cut. You should buy a property that is within your repayment ability.

Involve professionals

Due to current restrictions, home buyers may find it difficult to take the help of professionals while looking for a good deal, including checking the title of property and taking the help of valuers for ascertaining valuations in case of pre-owned properties. These professionals work for a fee and are an additional cost. But they do add value to your purchase. Not involving any professionals can leave you with a bad property or a costly deal or both.

Do go through the right channel and involve the right set of professionals wherever required, to get the best out of what is on offer.