ULTIMATE

GUIDE TO BUY
A HOME IN 2016

The average home

buyer in 2015 searched
listings for 18 weeks
and ultimately visited 12
listings.
Despite all of the technology
available to buyers these days,
search for their dream home still
takes time and careful research
regardless of whether theyre a
first-time home buyer or a veteran
whos
purchased
multiple
residences over the years.

Use this guide to help navigate

your home search, become even
more knowledgeable about what
to look for in your ideal home, and,
in the end, find the right property
to purchase in 2016.

List Of Contents
1. 2016: Right Time to Buy
2. Preparing Your Finances
Building up saving
Improve your credit score
Get loan preapproval
3. Working With Loan Coordinator
4. Begin The Home Search
5. Working With Real Estate Agent
6. Home Search Factors
Price
Location
Size and type
Condition

7. Offer and Negotiation

8. Its Closing Time
9. When it is OK to Be Tenant?
10. If You Are Buying to Invest
11. Start Ups: An alternative to Real
Estate Investment
12.About Author
13.Share Your Love

Click on link to go directly on page

IN THE LONG RUN,

RENTING IS COSTLIER
THAN BUYING A HOUSE

2016: Right Time to Buy

Buying a home involves huge
money, yet, it is not pure financial
decision. It is both about your need
and wants. It is about when you
need, what you want and where
you want.

After waiting long enough for price

cut,
2016
seems
perfect
opportunity for you to owning
your own home. Owning a home is
better than renting. If you rent for
long, your payment on rental
would be comparable to the home
loan. In the long run, renting is
costlier than buying a house.
4

Why Buying a Home In 2016

Can Be A Great Decision

Price
Are
Down

No
More
Price
Fall In
Sight

Home
Loan
Interest
are
Down

Corporates
Has
Started
Purchase
5

Price Are Down

Since start of correction in 4th

quarter of 2013, property rates are
15% - 40% down depending on
location.
In
group
housing
societies, real estate developers
are struggling to progress their

projects despite low sales. Some

offer to pay the pre-EMI on home
loan till certain period, saving you
lakhs of rupees in already low
price.

No More Price Fall In Sight

As you know builders in Delhi /

NCR has big stock of unsold flats.
Here arise assumption: Rates will
crash.
No!!

Since 3rd quarter of the 2013, home

prices have not appreciated
much. Price correction in the real
estate
market
has
already
happened. Buying property at
same cost of 2011 is also cheap
because inflation reduces value of
money with time
7

Home Loan Interest are down

More than 87% of retail home

buyer takes home loan. Home loan
rate of interest are at lowest level
since 2011. If you take home loan
now, you will pay 20% less time for
same loan than 2011.

Look below comparison for per

lakh (1 Lakh) loan
When rate of interest is low, you
will pay principal faster, resulting in
ending your loan early.

ROI

EMI

Tenure (Months)

Extra Period

Current Rate

9.50

998

200

2011 Rate

10.5

998

240

20%

Corporates Has Started

Purchase

Best time to buy is, when it is

priced less. To judge if prices are
down enough, you should look at
sophisticated investor. Recently
private equity firms have been
buying apartments at huge
discounts.

It means they are expecting it to

rise in mid-term, say 3-5 years.

Preparing Your Finances

Focus on
building wealth
before even
considering your
home purchase.

Building Up
Saving

Prior to hitting the market and checking

out listings, you need to take care of some
necessary tasks, including saving up
plenty of money for a new Home,
enhancing your credit score, and getting
pre-approved for a home loan. It will not
happen in a day. It will take good planning
and consistent control on spending

Improve Credit
Score

Get Loan
Preapproval
10

Building Up Saving

Focus on building wealth before

even considering your home
purchase. It convince lenders
youre ready to become a home
owner and handle the subsequent
mortgage payments.

You must build 20% - 35% saving of

property cost. For Affordable
homes minimum down payment is
10% of property cost. For high
value property banks asks for
minimum 25% down payment. It is
good to keep 10% extra saving for
incidental expenses

11

Improve Your Credit Score

Another factor lenders strongly

take into consideration is your
credit score. The math here is
simple: The higher your score, the
better you look in the eyes of
lenders.

outstanding debts, and avoid

taking new loans can boast your
credit score.

Doing things like paying all of your

bills on time and in full, eliminating

12

Get Loan Preapproval

You should take pre-approval for

your maximum loan eligibility, you
will only pay for loan availed.
Internationally home buyers takes
pre-approval before buying home.
In India your financial institution
will depend on your profile and
property type.

You should take preapproval from

X bank / financial institution if
Property you will buy will be
technically correct
Under construction project
approved from it
If you have bad credit record

13

It is not recommended to take preapproval if

Property you will buy may have
technical issue like extra
coverage / without map etc.
You want to buy house in under
construction project, but have
not finalized which project

Once you decide to go ahead with

pre-approval, you can search in
earnest by checking what mortgage
option are available to you based
on your profile and property you
intend to purchase
Having said that, its in your best
interest to find a loan coordinator
who knows the mortgage market
well and has a proven track record
of getting their clients the right
loan.

14

Working with Loan

Coordinator
Your loan coordinator can help you save
lot of time, energy and money by
selecting right lender from their
experience and their referral network

Right
Lender

ROI and
PF

Referral
Network

Process Right
& How Amount
15

Working with Loan

Coordinator
Taking help of a Non-exclusive
home loan coordinator is better
than approaching a bank / financial
institution yourself. Exclusive loan
coordinator works with 1 specific
bank / financial institution. While
Non-exclusive loan coordinator is
more knowledgeable than a single

banker or exclusive coordinator.

They are market expert because of
experience of working with
different lenders.

16

Choosing the Right Lender

Many time choice of your home

loan lender depends on factors
other than lowest ROI and initial
charges. It may also depend on
your CIBIL, technical issue with
property or any special condition
you are in right now. Your loan
coordinator can help you save lot

of time, energy and money

selecting right lender by their
experience and their referral
network (Bankers Contact)

17

ROI and PF

If you are buying a technically ok

property
and
your
income
documents support loan you are
looking, you can get lower than
chart rate of interest. With their
expert negotiation skills, loan
coordinator can get you better ROI
as well as lower processing fee

from different lenders. They can

also help you negotiate lower / no
insurance, usually cross sold with
home loan

18

Referral Network

You are looking for higher loan and

you can pay high EMI, but your
income documents does not
support your claim. Your loan
coordinator can help you get loan
amount your need to buy your
dream home. They have vast
contacts with different bankers.

Based on verification of your liquid

income and personal discussion,
they can get you higher loan
amount you are looking.

19

Process & How

Banks and financial institutions

employs verification agencies,
credit managers, advocates and
technical staff, property vaulters
etc.
Your
loan
coordinator
coordinates your loan application
on all steps from login to

disbursement. You can ask them

about what to do and how to do.

20

Choosing the Right

Amount

Prior to touring a single property,

figure out what the maximum EMI
you can easily pay off. Based on
this amount choose what will be
maximum loan amount you can
get.

Apply for maximum loan amount

you can get, but tour properties
which will require less than this
loan to buy.

21

Begin the
Home search
Youve completed foundation work
and now its your turn to actually
begin the home search by
checking, what listings are
available in the area in which you
intend to purchase a home.
If you want to go ahead with home
search yourself, fine! When you
find potential seller, there may be
few things not clarified at time of
doing a deal. Such unclarified

terms causes frustration at time of

transaction.
Theres lot, a local real estate agent
knows about property transaction
procedures. I highly recommend
you to find a real estate agent who
has track of working transparently
and can get you home that fits in
your budget and preferences.

22

Working With Real Estate

Agent

Experienced real estate agents

bring to the table for their clients:
savvy
negotiating
skills,
understanding of the local housing
landscape, legal knowledge, and indepth advice for home buyers on
how to approach the entire
process.

Heres exactly what you can (and

should) expect when engaging a
real estate agent

23

Market Expert

Everything from where home

values are rising the most to the
best ice cream shops and concert
venues: Thats the kind of intricate
knowledge real estate agents have
about the markets in which they
work.

Sure, anyone can Google housing

statistics and local community
information, but agents are
constantly in the know and
building their networks so they
can provide buyers with every last
detail they need to know about
their market.

24

Negotiation Skills

With an experienced real estate

agent comes veteran negotiation
techniques. A real estate agent
understand it is in mutual benefit
for deal to realize. They puts
nothing less than best to
negotiate lowest price from seller.

Put your trust in an experienced

real estate agent who has proven
to get great prices and the best
terms possible for their past
clients.

25

Legal Knowledge

Legalese is not something the

average home buyer knows a
great deal about but then
again, they dont have to, so long
as they employ a real estate
agent.

Agents are well-versed in the

language of home purchase
agreements and other legal
documents, meaning you dont
have to study up on real estate
law and, in turn, avoid headaches
during the home buying process.

26

Home Search Factors

Price
Narrow down
your search by
price point first
so you only view
homes for sale
you can actually
afford and dont
waste your time.

Location

Size & Style

Condition

Identify specific
areas, or even
neighborhoods
where you
would be
happy to lay
down a
foundation

Determining
size and style
preferences is
essential when
hitting the
market to check
out real estate
listings.

Its vital to
discover which
homes for sale
are in prime
condition and
which will
require some
investment to
fix.
27

Price

Now that you have a specific

budget
for
your
property
purchase, you now have a crystal
clear idea about how to conduct
your home search. Having said
that, there are still other financial
considerations to take into
account with any listing you plan
to bid on.

The silver lining to taking on these

payments is, you may be eligible
for some tax deductions for
mortgage principle and interest,
so consider that extra money
coming back to you as well.

28

Location

Wheres the closest public

transportation? Whats the quality
of the areas school? You should
ask these question as prospective
homeowners during the home
search.

Though you may fall in love with a

home, you also need to take into
account what the community can
offer you and your family not
only to ensure you live near great
and useful amenities, but also to
make certain youre paying the
appropriate price for a house.

29

Location Factors
Work Commute
Make sure you consider whether
its easy to get to and from work
when visiting property.
Indian
cities don't have infrastructure to
support most of people using
personal vehicle. You know this
from personal experience of
getting stuck in traffic on festive
eve, when most people who own
vehicle try to use it on same time.

You must see a home with

proximity from public transport. It
is recommended to choose a home
with public transport not more
than 1 kilometer. It is helpful for
you, not only leaving and arriving
on time for work and home but
also give freedom to your family
member in absence of individual
vehicle

30

Water and Power

Steady supply of water and power is important. Check with your
friends, relatives or other source. If your find later, it can spell
trouble

School System
Look for a home near a good school if you have school going kids, or
toddlers who will go school soon. For them not only getting admission
becomes easy, but going school too. The quality of a school system greatly
impacts home values and how a community evolves.

Security and Public Services

Discover all you can about nearby hospitals, local police, fire station, and
general municipal services to get a feel for the community. Your priority
sure depends on age and health of your family
31

Crime
The rate and total number of crime committed in an area can have a
drastic impact on home values in the long run

Shopping and Attractions

Knowing you have plenty to do and enjoy near your new home is just as
important as finding a suitable residence. On which Shopping malls or
Movie Theater you can hang out with your family and friends. Where are
the best clothing stores? Which are money saving grocery stores nearby?

32

Size and Type

It doesnt matter if youre a

growing family in need of an
upgrade or a couple looking for a
cozy retirement property, its
imperative to consider what
residence size and type is
acceptable and desired.

Each house has different size, and

style. Its important to know what
you want in your home, what you
can live with, and how much
space you actually need.

33

Condition

Whether youre interested in

property built in the last couple of
years or residences constructed
30 years ago, chances are there
are some blemishes. And perhaps
even some major issues that
require attention and action.

Here are the main home problems

to look for ..

34

Condition Factors
Strength of Property
Carefully look for structural
strength of building as a whole. On
visit to property take a closer,
deeper look at condition of
property. Any cracks, breaks, mold,
and pests discovered near a homes
foundation are big red flags that
indicate you should head to the
next listing on your list.

In Delhi / NCR most of houses are

built on plotted development. With
people
owning
plot
and
constructing without any uniform
structural
strength
guidance,
makes it unsafe to live. Threat is
further compounded by its seismic
zone 4 geographic location
(correspond to Richter scale up to
7.5), which makes it vulnerable to
high intensity earth quakes.

35

If you want to buy a plot and later build a house yourself, keep
eye of structural strength. While planning construction, take
help of architect, they have enough knowledge about
structural strength. Disaster prevention involves engineering
intervention to make building strong enough to withstand the
evil forces of nature.

Ventilation
Without proper ventilation, bacteria and stale carbon will make the indoor
air of your home more polluted than outside. Ventilation is necessary to
remove dirty air and moisture due to cooking. Good ventilation will keep
your home odor free and pleasant

Odors
Smell doesnt lie. If something in or around a real estate listing causes a
physical reaction whether its general air quality or a specific problem
area with mold it may not be an ideal choice.
36

Offer and Negotiation

After
youve
completed
a
comprehensive search across the
local market and zeroed in on the
home for sale you want, its time
to get the purchase process in full
gear. Of course, bidding on a
listing is just one step in the
buying a home.

Theres plenty to do once the

paperwork gets going.

37

BASE YOUR OFFER ON THE

HOME VALUE, NOT THE LIST
PRICE.

Offer
While seller have a specific list
price, that doesnt mean your
offer needs to meet their pricing
requirement. Rather, work with
your real estate agent to develop
a price point that youre
comfortable with and leaves room
for negotiation with the sellers.

Your bid should be what other

homes near the listing have sold
for in recent months and years.

38

For this you can do some research on internet. Check at what price similar
properties were sold in that locality. If they are listed again and again over
time, it means they are selling very slowly, then you are in stronger position
to put lower offer.

Be Prepared to compromise
Your price does not matters, you wont find a perfect house. You may have
to compromise on features and may be even on the big three: price, size or
location.

Dont get fancy on decor.

There are a lot of things that can be altered / renovated after purchase,
like hardware and glasses. Let the little things go.

39

Negotiation
FOCUS ON GATHERING
INFORMATION ABOUT
SELLER. MORE YOU KNOW
ABOUT HIM / HER, YOU CAN
PUT BETTER STRATEGY.
When you enter negotiations
prepared to compromise, youll be
a step ahead. Remember your
easy terms can be as important as
your offer. Making a bigger down
payment or changing the closing

date to accommodate the seller.

The fewer contingencies you
have more likely you are to get
better price.

40

Principle of negotiation is knowing you wont get all, but if you dont ask,
you get nothing. To negotiate better, focus on gathering information about
seller. More you know about him / her, you can put better strategy.

Invest quality time in research

Find out if property is being sold because of bank foreclosure. Check google
and determine whether the house has been on the market before and at
what price.

41

Time Can Be Essence

If seller has just purchased other
property, they would want quick
closing. If there are any business
losses / payment to third party is
involved, you can negotiate better.
But if seller has no specific urgency

/ is ok with longer closing time / ok

with renting back property you
cannot hard negotiate

42

DOUBLE-CHECK EVERY
DOCUMENT AND
AGREEMENT TO MAKE
SURE YOU AND THE
SELLER ARE ON THE SAME
PAGE.

Its Closing Time

Youre on the cusp of closing the

deal and owning your very own
home but its important to pay
attention to all of the minor
details that need to be handled in
order to make the purchase

official. Thankfully, your loan

coordinator and real estate agent
can help you with these tasks, like
facilitating paperwork between
your mortgage lender and signing
the requisite forms.
43

Of all times during the home

search process, this is the one
when its absolutely vital to
double-check every document and
agreement to make sure you and
the seller are on the same page.

Many deals fall through at the last

minute due to miscommunication,
so work with your agent diligently
to get the deal past the finish line
in a timely and efficient manner.

44

HOME LOAN IS LONG

TERM LIABILITY. FOR A
20 YEAR CONTRACT, YOU
MUST HAVE CONFIDENCE
IN YOUR INCOME
STABILITY FOR NEXT 5 7 YEARS

When It Is Ok To Be Tenant?
People prefer buying home than
renting. If you have built enough
saving to buy home in total cash,
then answer is obvious YES. But if
want to buy a home on loan, then

answer goes beyond down

payment and present income. If
you cant see stability for next few
years, for now renting makes more
sense to you.

45

MARKET MOVEMENT HAS

RESTRICTED SHORT TERM
INVESTORS FROM MAKING
QUICK RETURN. LONG-TERM
INVESTORS ARE SPECULATING
WHAT GROWTH REAL ESTATE
INVESTMENT WILL GIVE
OVER BANK INTEREST

If You Are Buying

To Invest
46

If You Are Buying To

Invest

Few real estate investor puts cash

down from their wealth. Many
invest with bank loan hopping
their property price will rise at
higher rate than bank ROI.

Market movement has restrained

short term investors from making
quick return. Long-term investors
are speculating what growth real
estate investment will give over
bank interest.

47

During the peak, the news about

someone making a 100 per cent
plus
return
on
property
investment in a year usually had a
viral effect. That time most of
surplus from all investors were
driven to real estate. Those who
gained fantastic return from short
term betting sometimes leveraged
almost everything they could
afford in real estate. Now those
investors are stuck with costly
loans and unsaleable property (Or

saleable at heavy losses).

I met a friend of my client Arun
Jain, in November 2015. He had
purchased 4BHK apartment in
under construction project at
Faridabad at cost of 75 Lakhs in
2012. Arun says - I have been
trying to sell my apartments for
the past two years even at 5 lakhs
less than cost. But no success.

48

To make matters worse, Arun is

paying interest on the loan and the
property is not giving him any
returns.
As I am writing this at end of 2015,
Delhi / NCR has largest unsold
residential inventory of more than
1.5 Lakh units. On other hand
some developers are launching
premium projects at amazing low
rates. If you are investor, this is
time of caution, but if you want

home to live, you can get highly

discounted house now. But my
word of caution is dont always
look for lowest price. It is possible
some developers are throwing
misleading schemes. Always check
a builders reputation and check
genuine-ness of project with all
resources available with you. Do
detailed research of property
before putting your money on it

49

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Real Estate Investment
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50

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51

About Author
Hi!!

I am Ravinder Bhutani, founder of

Joy Loan. I hope you found this
EBook informative and useful.

If you have got access of this

resource without subscribing to

our newsletter, than I will suggest
you to Click Here to subscribe our
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I greatly enjoy working with loan
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can get in touch with me on my
email hi@joyloan.in Or Click here
to submit your details
52

ULTIMATE
GUIDE TO BUY A
HOME IN 2016
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