Hidden costs to be aware of during home buying

3 years ago

Hidden costs to be aware of during home buying

Home buying is an ardent ordeal that has many facets to look into as it is one of the most expensive outlays that you are going to engage in your lifetime. You may be trying to do everything right but on the day of moving or as the days advance you can confront newer costs that can supersede your budget in all ways.  

After all, you cannot deny the fact that buying a home is of great excitement for all Indians and when the dream is finally realized our emotions knows no bound! You may be attempting to do everything right at the first instance, like setting your budget, choosing the right location, and even preparing for the housewarming ceremony but when the final day of shifting arrives you may be taken aback by the hidden costs that you may not have been aware from beforehand. 

These hidden costs are sometimes overlooked by most of the home buyers who buy apartments or homes in the excitement of a new home but these inevitably overshoot your budget in an inadvertent manner making you financially unprepared. Here are these hidden costs that are generally involved in home buying and being aware of them before purchasing a home can keep you rest assured in all ways. 

  • Home Inspection Costs

The home inspection cost is the cost you have to bear that is normally charged by the banks when you apply for a home loan. The banks would employ a third-party home inspector to cross-check if the property value is as per the price quoted by you. Whatever the final report on the property is, the banks normally charge the borrower of the inspection charges which can also be added to the monthly EMIs.  

  • Stamp Duty/ Registration Fee

The stamp duty or the registration fee is the fee that must be paid to the government by the purchaser of the property whenever you are about to register a property in your name. As registration is mandatory to achieve the legal validity of the transfer of the property but this may go up to 8 to 10% of the property value. As this is quite substantial, it is always prudent to keep this amount ready and within your budgets.  

  • Relocation Cost

The cost of relocation is the cost that is involved in transporting your home stuff and furniture to your new home. Some developers may give you this service or you may have to employ some service providers which certainly don’t come free. So this is an extra cost that you should consider before shifting and should allocate a budget for it to be on the safer side.  

  • Maintenance Deposits

Nowadays, it’s a trend for the builders to charge the maintenance fee in advance which is generally charged for 2 to 10 years in advance by various builders as that gives them a huge capital to work with. Maintenance charges can vary due to location, city, number of the amenities provided and various other factors but it is certainly an amount of concern that is an additional burden for the home buyer. Negotiations should be carried out with the builder to lower the maintenance costs as that would inflate the price of the property as that has to be paid at the time of the purchase of the home you are buying.  

  • Parking Space Costs

Parking space is an essential amenity that you would certainly need but that is not added to the cost of the apartment for sale. It is an additional cost that you have to incur and which essentially depends on the space that is going to be allocated to you for parking your cars. This is also a cost that is an addendum that you should keep in mind to set your budget right. 

  • Goods and Services Tax (GST)

This is one of the necessary taxes and fees that you need to pay while buying an apartment. GST is normally 18% but for under-construction flats and apartments for sale, the GST has been revised to 5% and for the affordable housing segment it has been revised to 1%. Even then it is a substantial amount that you have to shell out from your pocket which is an additional cost over and above your apartment price.  

  • Cost of Interiors 

Interiors in most cases seem very essential for the new home buyers for which they can appoint a professional service to decorate the interiors or they can do it themselves with the help of a carpenter. Whatever you do, the interior decoration of your home or the interiors is an extra cost that you should add to your budget before buying a home.  

  • Preferred Floors and Locality Charges

Builders have different blocks and they offer a different style of living in different blocks making you pay extra for the block you choose. In the case of high-rise buildings also, the higher you go the more you have to pay per square feet and even this is also true for penthouses. This is an extra charge that you have to include in your budget too.  

  • Broker’s Fees

If you buy a home or a house through an agent or a real estate broker you have to inevitably pay the broker’s fee which is an extra that should be budgeted as well. Online brokers and aggregate sites charge you less and offer you more options whereas an agency can charge you more depending on the property and its value.  

Either all of them or most of them are unavoidable and you have to incur these costs while buying a home but if budgeted properly before the purchase keeping provisions of each in a well-planned manner, your home buying can be smooth, hassle-free and exciting.