Step by Step Guide to Buy A New House in Dhaka

The housing market in Dhaka is flooded with various options that cater to the demands of different walks of people. If you are buying a house for the first time in Dhaka, you may find yourself in a confusing situation while choosing the best house for you. Here’s a small guide to help you through the process of buying your first house. 

Step 1- Research 

Buying a house is a lifelong investment. You cannot take a decision hurriedly while looking for your available options. Once you have decided to purchase your first house, you should begin your initial research immediately. You can start your research online, as most real estate businesses maintain a functional website. However, when you find your preferable house, you should visit the house in person to investigate it meticulously.

Make sure you have ample time in your hand to properly scrutinize all the available houses that suit your need. Keep a note of the houses that matches your preferences. Write down the pros and cons of each of the houses. Once you have picked a few houses, take time and thoroughly analyze your options. To get a better idea about the prices, compare them against similar houses in different areas. It will help you to get a better idea of pricing trends in the housing market in different areas of the city.

Step 2- Fix Your Budget

Buying a house is an expensive decision. A decent size flat in Dhaka starts from over 50 lakh Taka ends at a few crores. As the price range goes very high, it is better to fix a budget early. A fixed budget will narrow down the options available for you. Further, it will help you to find the optimum house within your budget.

As the price tag for houses is very steep, usually, people cannot pay the entire amount upfront. Rather, they choose to pay the amount in installments or take loans. If you opt for the latter option, you need to consider the down payment. To take home on loan, the maximum you can borrow is 80% of the property value. The percentage is capped. The rest, 20%, is the borrower needs to pay from his or her own pocket as a down payment. For example, if you apply for a home loan for a property worth 70 lakh Taka, the bank will provide you with a maximum amount of 56 lakh Taka. The rest, 14 lakh Taka (20% of property value), is what you will need to pay as a down payment. 

For a first-time homebuyer, a down payment may become a tough obstacle to achieving the dream of having a home. The down payment is the largest up-front expense while purchasing a home. Moreover, as the down payment is paid during the closing, it influences the tenure of the loan—usually, the less the down payment, the more the interest payment. You should also bear in mind that the interest payment is a long-term burden. By the time you will end up paying the last interest payment, you will find yourself paying a lot more than initially borrowed. You should consider your career progress and future income before taking home loans. 

Step 3- Decide Your Financing Option 

You can finance your first house in Dhaka in two ways. You can pay the price from your own savings, or you can take a home loan from the bank. If you finance you’re your first house with your own savings; there is no further hassle. However, if you are willing to take a loan to buy your first house, you need to be careful about certain aspects of a home loan. 

If you decide to buy your first home with a home loan, you need to select the type of interest rate that suits you. There are two types of interest rates- fixed-rate interest & adjustable-rate interest. Fixed-rate interest locks the rate for the entire tenure of your loan. It may become a burden if the market interest rate for home loans drops in the near future. Then, you will be paying a higher interest rate than the market rate. On the other hand, the adjustable-rate interest will continue to adjust your interest rate every month based on the market rate and your credit rating.

The floating-rate interest or adjustable-rate mortgages are usually the best options for first-time homebuyers. First-time home buyers are usually at an earlier stage of their careers. As the years will go by, their annual income will increase substantially. The adjustable-rate will continue to adjust with the annual income of the borrower. Thus, the borrower will end up paying EMI at a lower interest rate in the later years and save on the interest expense. However, it is important to understand that the borrower can only enjoy the benefits of a better credit score if the market interest rate for home loans remains relatively stable. The adjustable-interest rate may become a bone in the throat if the interest rate in the market increases greatly with time. The borrower will then end up paying mortgages at a higher interest rate as the rate will adjust with the market rate. However, the borrower may end up paying far less in mortgages than the initially anticipated amount if the market rate for home loans drops.

Step 4- Select Your Type of House

There are two types of houses available in the market to buy. One is a ready-made house, and the other is an under-construction house. The ready-made flats are fully completed, and you can shift in the right after purchasing. A major downside of ready-made houses is that you cannot customize their design. In the case of ready-made houses, you may need to pay the entire price of the flat upfront. On the other hand, the under-construction houses are available to book. As they are under construction, you can customize them as you like. In the case of under-construction houses, you can pay a certain amount which is called the “Token Money”, to book your new house. 

Step 5- Personal Investigation 

This is the most crucial step when you are buying a new house in Dhaka. Once you are done with your primary research, budget fixing, and selecting the type of house you want, you need to start your in-field investigation upon visiting these houses and check the crucial aspects of your selected house. Your thorough investigation will decide whether you made the right decision or not. Hence, you must not leave any stone unturned while doing your personal investigation on the houses you are willing to buy. 

Location is the major concern before choosing the house. The traffic in Dhaka has always been infamous. Commuting from one part to another part of the city is a headache for us all. While buying a flat, we dream that it will bring comfort to our lives. However, a bad location can ruin that dream and can prove to be a matter which induces negative feelings in our lives. Thus, a suitable location is very crucial. One should select the location based on their workplace and frequently traveled places.

The building structure is vital. Scientists have warned us that a possible earth-quack may happen in the near future. The good news is. Currently, we have the technology to withstand high earth quacks as well. Before purchasing a flat in Dhaka, the buyer must ensure that the developer has implemented earth-quack proof technology in the base of the apartment building. 

When we dream of our dream home, we dream of colorful rooms with ample daylight in them. However, considering the current scenario of Dhaka, apartment buildings are being made within a few feet apart from each other. As a result, the flats do not receive ample natural light and air. Flats with minimum air and light will cause a number of issues. It will hamper their health. In addition, it will increase utility bills. Especially in summer, living in a poorly ventilated flat can prove to be unbearable. So, the buyers must take caution and investigate the air and light flow in the flat before purchasing the flat. 

Step 6- Utility & Security

While one can expect to receive the basic utilities of water, gas, and electricity all the time, it may not be the case in some parts of the city. There are some parts of the city that severely suffer from the lack of gas and water. In some places, people get gas only for a few hours. At the same time, some other parts of the city suffer from a lack of water. Without such basic utilities, life can prove to be incredibly troublesome. Hence, it is very crucial to know about the utility service history of the area. You should confirm the availability of all the basic utilities in your house.

Parking space is a common area for all the owners of the flats. Usually, there is a guideline set by the majority regarding the use of the parking space. It is important to know about these parking rules and regulations before purchasing the flat as it may not suit all lifestyles. 

Dhaka is not free from burglars. Even the most secure parts of the city fall victim to home burglary from time to time. No matter the location of the flat, the apartment building must be highly secure. There should be ample security cameras surrounding the building. In addition, there must be competent security guards who will guard the building around the clock. 

Step 7- Perks & Amenities

Nowadays, modern houses come with extra perks and amenities for their residents. When you are buying a house for the first time in Dhaka, make sure your house features extra amenities. Modern apartment buildings offer a gym and pool within the apartment building. In addition, the rooftop is built in such a manner that the young people can play popular sports like football and cricket in the afternoon. 

Step 8- Neighborhood Analysis 

Neighborhood plays a crucial part in determining your happiness in your newly purchased house. If the neighborhood is not well developed, you may find it difficult to settle yourself. While the house provides you with a place to stay, the neighborhood will provide all your social needs. Hence, you need to ensure your neighborhood has super shops, good schools & hospitals. 

If the family has young members, it is important to ensure there are good schools nearby the flat. Unless the young member of the family will have a tough time commuting to the education institution. Hospitals are another crucial factor before purchasing a flat. The human body may fall victim to illness at any time. Older members of the family are more prone to health issues. People may fall seriously ill at any time. If there are no good hospitals nearby, it can cause serious consequences. Hence, it is important to purchase a flat that has a good hospital nearby. It is always a wise decision to prepare for bad days. 

Step 9- Coordinate Legal Paperwork

One of the primary concerns of flat buyers in Dhaka is the legality of the apartment. Flat buyers in Dhaka may face numerous legal hurdles such as inexperienced brokers, complicated laws, proper knowledge regarding the ownership of the flat, title defects, and many other issues. It is crucial to deal with legal issues systematically before purchasing a flat. You must check if the original title deed shows the name of the seller and ensure that only the seller has the right to sell it and no other party owns any portion of the flat. It is advisable that the buyer reviews the title deed by a lawyer to fully confirm the authenticity of the document.

Step 10- Close the Deal

Lastly, you close the deal of buying your first house in Dhaka by acquiring the sale deed. After the title deed, the sale deed is a document that the buyer must acquire. The sale deed is the primary proof of the purchase. Furthermore, the sale deed will specify all the terms of the purchase. You must carefully read through all the terms stated in the sale deed before closing the deal. It is better to review the sale deed by a lawyer to seek out if there are any legal loopholes.

Summary

Buying a house for the first time in Dhaka is not a simple process. There are complexities and hassles in each step. If you are not careful, you may end up regretting your purchase. As a buyer, you should take control over every aspect of the house buying process. If you follow the steps and carefully walk through each process, you will end up as a satisfied homeowner. 

F.A.Q

How can I buy a house in the best neighborhoods in Dhaka?

Ans: Usually, reputed real estate companies operate in the best neighborhoods in Dhaka. Your wish of finding your dream in the best part of the city can come true via Mir Real Estate. 

Can I cancel my house booking after closing the deal?

Ans: No. Once you close the deal, you become the rightful owner of that house. You cannot cancel the deal. However, you can sell your ownership to another party.

How can I get a home loan?

Ans: Please follow the guide to help first-time homebuyers with home loans.

Can I buy a ready-made house in installments?

Ans: Yes, you can if the seller provides that option. But you need to pay extra interest with each installment.

Is there any hidden cost in buying a house?

Ans: Some real estate companies may deceive you into paying extra charges. However, Mir Real Estate maintains a transparent deed and does not charge extra from clients.