How Tawarruq and House Hunting Work Together
Tawarruq Definition: As we’ve already stated when we’ve gone through these definitions, many Islamic financing terms correspond to Western models with a few differences. Tawarruq is one of these. On the one hand, it’s an Islamic financial product that lets people raise money in a convenient fashion. Of course, one of the basic tenets is sharia laws are all observed so there isn’t any usury present.
One of the rules that need to be followed here concerns tangible assets. For example, someone might buy a certain amount of metal from a financial institution. They might pay off the purchase in a year’s time. If they sell the metal back to the bank for an agreed-on amount, the sharia requirement that all transactions need to have a tangible asset is fulfilled.
Tawarruq is important to Islamic financing since it’s a vehicle that allows you to put money together—perhaps even for the purchase of your own home. Not everybody understands what to look for when they go house hunting. Looking for the perfect home can be a daunting challenge if you don’t have some of the right criteria to use.
That’s why we’ve put together a few boxes that you can check. Along with tawarruq and other forms of Islamic financing, these will help you accomplish your goal.
Finding the right neighborhood is a critical decision. Too often people are dazzled by a house and the amenities they find. It’s important to have a look around and use practical criteria to judge the neighborhood to get the whole picture.
During home values is one of the first things that you should do. Taking a look at what the other houses in the same neighborhood are selling for can give you a good benchmark. It’s also a good idea to ask about the monthly bills. Not only are we talking about utilities here but different fees if the house you’re thinking about is a condominium.
Tawarruq and The Insides
Taking a look inside the house is just as important as looking around the exterior. Three of the touch points that you should be looking at are floors, the windows and the ceiling. Any signs of age or updates can influence your decision.
If it looks like the windows are aftermarket, you should ask to backup any claims the seller has about how much they cost. The walls are another good indicator of how solid a purchase any home is. Make sure to look for brown stains that indicate water damage. If the paint looks like you’ll need to repaint it when you buy, you’ll want to negotiate for a lower price.
You should check to see if the walls are soundproof if you’re thinking about purchasing a semi detached home as well.
Finally, it’s a good idea to give the bathrooms in the kitchen the white glove treatment. Make sure to check all the faucets in both rooms to see if there’s any mold or mildew and if they leak. Check the bathrooms to make sure all things are working and the toilets flush and function.
We can help you find the right Islamic leasing product so any purchase you decide on is sharia compliant. Get in touch to learn more about tawarruq today.