Buying Your First Home: The Steps, in Order

Buying your first home is mostly a question of order. Each step is easy on its own. Mistakes happen when a step is done too early, like paying a token before reading the papers, or picking a flat before knowing what the bank will lend. Here is a sensible order, written for a salaried first-time buyer with a ₹60–90 lakh budget in mind.

The idea behind the order

Do the cheap, reversible steps first and the binding ones last. That way, by the time you sign anything serious, you already know everything you need. At every step, ask yourself one question: if I stop here, what does it cost me?

Step 1: Rent versus buy, honestly

Write down your current rent and what a home loan EMI plus monthly maintenance would be. Then add the one-time costs of buying: your own contribution, stamp duty, registration and moving. If your job or city may change in two or three years, renting a little longer can be the wiser choice. If you plan to stay, buying starts to make more sense.

Step 2: Ask a lender, not just a calculator

An online calculator shows the EMI for numbers you type in. A bank tells you what it will actually lend, based on your salary slips, existing loans and credit score. These can be very different.

• Check your credit report first. Errors take weeks to fix.
• Keep one folder ready: ID and address proof, salary slips, bank statements, Form 16.
• Ask for the loan amount and its conditions in writing.
• Ask what loan-to-value limit applies to you. It is set by the Reserve Bank of India and can change, so take it from your lender.

Now you know your real budget, and how much you must bring yourself.

Step 3: Write your must-haves before visiting

Decide in advance: 2 or 3 BHK, commute limit, school distance, ready or under construction, and the most you will put in from savings. A list made before you see a lovely show flat is the most honest list you will ever write.

Step 4: Check RERA before the site visit

Section 3(1) of the Real Estate (Regulation and Development) Act, 2016 (RERA) stops builders from advertising, booking or selling a project that is not registered with the state authority. That gives you a free filter. On the state RERA website, check that:

• the project is registered;
• the builder named there is the company you are dealing with;
• the land details match what you are shown;
• the registration is still valid.

Step 5: Read the papers before paying anything

Section 19(1) of RERA lets you obtain the sanctioned plans and specifications. Ask for the full set, and have your own advocate read the title papers.

Document	What it tells you
RERA registration certificate	Who is building, on which land, and until when
Sanctioned plan	What the authority approved
Title deeds and mother deed	How the seller came to own the land
Encumbrance certificate	Registered sales and loans on the land
Khata or panchayat record	Which local body taxes the property
Draft agreement for sale	Payment schedule, carpet area, possession date, penalties

Step 6: Pay a small token, carefully

• Pay only after step 5, never to "hold" a flat while you check.
• Get a receipt naming the flat, the amount and the refund terms.
• Pay by bank transfer to the company named on the RERA certificate.
• Remember the limit: section 13(1) of RERA bars the builder from taking more than ten per cent of the cost before a registered agreement for sale.

Step 7: Sign and register the agreement for sale

Section 13(2) of RERA says the agreement must state the specifications, payment dates, possession date and the default interest each side pays. Read four things closely: whether each payment stage is something you can see on site, whether the interest clause works both ways, the carpet area of your exact flat, and the possession date.

Step 8: Registration, loan and handover

• Pay stamp duty and registration charges at the sub-registrar's office. Take the current rates from the Department of Stamps and Registration.
• Check whether TDS (tax deducted at source) applies to your purchase. On property above the threshold set by income-tax law, the buyer must deduct and deposit it.
• Your bank pays the builder in stages as construction progresses. Share the payment schedule with the bank early.
• At completion, ask for the occupancy certificate, inspect, list defects, then take possession.

A worked budget, before step 1

This is illustrative. Rates, fees and charges vary, so treat every number as an example of how to add things up.

Say the home you like costs ₹75 lakh, and your bank lends up to 80% of the value. Here is the cash you need from your own savings:

Item	How it is worked out	Example amount
Down payment	20% of ₹75 lakh	₹15 lakh
Stamp duty and registration	Assume 6% for illustration; check current Karnataka rates	₹4.5 lakh
Loan processing and legal fees	Assume a round figure	₹30,000
Moving and basic furnishing	Your own estimate	₹2 lakh
Emergency fund kept aside	Six months of expenses at ₹50,000	₹3 lakh
Total cash needed		₹24.8 lakh

Many first-time buyers plan for only the down payment, ₹15 lakh here, and are surprised by the other ₹9.8 lakh. Seeing the whole number early makes every later step calmer.

Common mistakes, step by step

• At step 2: counting a pre-approval as a promise. It is an estimate until the bank checks the property.
• At step 3: letting the visit decide your must-haves. Write them first, then visit.
• At step 4: trusting a RERA number printed on a brochure without looking it up yourself.
• At step 5: using the seller's lawyer. Your lawyer works for you.
• At step 6: paying a large token in cash. Pay by bank transfer and get a receipt that names the unit and the refund terms.
• At step 8: taking possession without a written list of defects.

A one-page checklist to print

• Total cash needed, written down, with your emergency fund separate
• Bank's in-principle letter, with the amount and the conditions
• RERA page for the project, saved or printed
• Lawyer's title report
• Token receipt with refund terms
• Registered agreement for sale, then registered sale deed
• Handover checklist and defect list

The short version

1. Decide honestly between renting and buying.
2. Find out what the bank will lend.
3. Write your must-haves.
4. Check RERA.
5. Read the papers with your own lawyer.
6. Pay a small token with a proper receipt.
7. Sign and register the agreement.
8. Register, disburse, inspect, move in.

To see what an EMI looks like on your own numbers before step 2, try our EMI calculator.