A buyer should exercise utmost caution while buying property in India, be it for residential or commercial interests. Below is a real estate purchase checklist that includes tips for property buyers, discussion under specific categories.
Proximity afforded :- Whether location of property suits to your daily life schedule. Whether property is close to central business district, entertainment centres, hotels, restaurants, transport hubs, hospitals, market, schools, etc.
Quality of Construction :- Whether structural stability of the building, electrical systems, plumbing systems, drainage, sanitary fitting, roof, walls, ceiling, floors, paint work, foundation, doors and windows is sound or not.
Check the title and interest of seller :-
Thoroughly check and satisfy yourself with the marketability of the property title in terms of whether the owner is the original owner and whether the title deed is original. Obtain legal opinion through an Advocate of repute, who can examine the deeds to establish the ownership of the property by the Seller.
Similarly, if you are buying a resale flat, ask for the Purchase Agreement, which is the Agreement between the current seller and the previous owner and get it scrutinized by an Advocate. He/She will identify whether the seller is truly entitled to sell the property, whether any mortgage exists on the property and if it has been paid off and whether there is any lien on the property. Retain a copy of this document and also check the original.
Avoid engaging in negotiations over a disputed property.
Documentation :-
Ask for all the legal documents in original. Check whether a ‘No Encumbrance Certificate’ has been obtained to ensure that no mortgage exists/ has been existing on the property. Get a ‘No Objection Certificate’ from the Builder / Society.
Check for authentic approvals from government agencies like the land development, planning authority. Ask for original documents and certificates.
Get a full and true disclosure of all outgoings such as municipal and other local taxes, taxes on income, water charges, electrical charges etc.
Take a declaration from the seller on what add-on, if any, he is giving along with the property.
Make sure to include every conceivable clause in the Sales Agreement. A Sale Agreement is the only written evidence of the deal so it should-include everything from payment terms to exact description of the title.
Understand the finer details of the sale contract property to arm yourself with knowledge that shall be beneficial during and after the transaction is complete.
Take care that all the duties that are to be paid on the property like Stamp duty, Registration fees and taxes is included in the Sale Deed / Agreement to sell.
Ask for any other information and documents as may be prescribed under the law.
Post registration activities :-
Subsequent to the registration of the Sale Deed, you should:
Verify that all the taxes, statutory payments in respect of the property including power, water charges are paid till date.
Collect deposits receipts given by power and water supply agencies from the Seller. Without delay, apply to the power / water supply authorities to transfer the meters and deposits in your name.
Ensure that the records of the Local Bodies, AUDA or Municipal Corporation is transferred in your name. The original authorization letter of the Seller to be enclosed with the application of transfer.
Get a good idea of the costs of various components like monthly outgoings, costs of utilities. Do research on the mode of payment and the tenure for which you will be liable to pay taxes
Ahmedabad
Saturday, September 11, 2010
Property Documents required for Loan/purchase
1. Latest certified copy of 7/12 extracts
2. Latest certified copy of village form no. 6 (record of rights),
3. Latest certified copy of village form no. 8A (statement of account),
4. Allotment Letter/Agreement/Deed
5. Possession Letter
6. Receipt of payment made to Builder
7. Copy of registered Sale Deed of Land purchased for development.
8. Copy of Approved Plan
9. Construction Commencement Certificate (Rajja Chithi)
10. Copy of Development/Construction Agreement
11. Title Clearance Certificate and detail report of Advocate
12 Building Use (BU) Permission
13. Share Certificate (For Co-operative Society)
14. Copy of NA certificate
15. Society Registration Certificate.
16. For Resale Property No dues Certificate issued by the managing committee of the society
17. For Resale Property No dues Certificate from financial institution if the seller has availed loan
18. For Resale property, Original Sale Deed of the Property by the current seller & previous owner
19. For Resale property, latest receipt of Municipal/Auda tax and Electricity Bill
2. Latest certified copy of village form no. 6 (record of rights),
3. Latest certified copy of village form no. 8A (statement of account),
4. Allotment Letter/Agreement/Deed
5. Possession Letter
6. Receipt of payment made to Builder
7. Copy of registered Sale Deed of Land purchased for development.
8. Copy of Approved Plan
9. Construction Commencement Certificate (Rajja Chithi)
10. Copy of Development/Construction Agreement
11. Title Clearance Certificate and detail report of Advocate
12 Building Use (BU) Permission
13. Share Certificate (For Co-operative Society)
14. Copy of NA certificate
15. Society Registration Certificate.
16. For Resale Property No dues Certificate issued by the managing committee of the society
17. For Resale Property No dues Certificate from financial institution if the seller has availed loan
18. For Resale property, Original Sale Deed of the Property by the current seller & previous owner
19. For Resale property, latest receipt of Municipal/Auda tax and Electricity Bill
Factors to be considered for Home Loan
How much should you borrow?
Borrow only as much as you can repay easily. Over indulgence can lead you into a debt trap recovering from which may be difficult. Apart from monthly EMI payments, you must be able to save some percentage of your income for contingencies. This will be of use in case of emergencies
What are the tax Benefits?
The repayment a borrower makes towards his home loan can significantly reduce his tax liability. The tax benefits are a big draw for the salaried class to invest in a property.
Under Section 80C of the income Tax Act, Principal repayment up to Rs. 1 lakh on your home loan for purchase (or construction) of a residential property will be allowed as a deduction from the gross total income.
A deduction up to Rs. 1.5 lakhs towards the total interest payable on the home loan towards purchase (or construction) of a house can be claimed while computing the ‘income/loss from house property’ as per section 24(b) of the Income Tax Act. This is in case of a self-occupied property
Which scheme is good for you?
To fix or float is the greatest dilemma that most home buyers face. A floating rate may appear cheaper and enticing. However, the borrower must remember that the rates may go up any time. Hence, he must set aside buffer funds to meet any sudden increase in EMIs. Many borrowers feel that lender is quick to pass on an increase in rates and hesitant to pass on the benefits of reduced rates. Talk to borrowers about their lenders while choosing one.
Pure fixed rates are offered by very few banks and the interest rates are quite high. Scheme like fixed for three years are increasingly becoming popular. At the end of three years, the borrower is automatically switched from fixed to floating scheme at the rate prevailing at that point of time.
You can benefit from the attributes of both fixed and floating loans in a hybrid loan. Here, the borrower locks a part of the loan under fixed and exposes the remaining to floating rate fluctuations.
What is EMI?
Equated monthly installment (EMI) can be broken down into two components – interest and principal. During the initial years of a loan repayment, it is mainly the interest payments that are being made while the principal amount is much less. Towards the end of the repayment tenure, a bulk of the repayment is made towards the principal component.
Larger the loan amount, higher the EMIs that borrowers have to repay month after month. Increasing the tenure of the loan can bring down your EMI
Borrow only as much as you can repay easily. Over indulgence can lead you into a debt trap recovering from which may be difficult. Apart from monthly EMI payments, you must be able to save some percentage of your income for contingencies. This will be of use in case of emergencies
What are the tax Benefits?
The repayment a borrower makes towards his home loan can significantly reduce his tax liability. The tax benefits are a big draw for the salaried class to invest in a property.
Under Section 80C of the income Tax Act, Principal repayment up to Rs. 1 lakh on your home loan for purchase (or construction) of a residential property will be allowed as a deduction from the gross total income.
A deduction up to Rs. 1.5 lakhs towards the total interest payable on the home loan towards purchase (or construction) of a house can be claimed while computing the ‘income/loss from house property’ as per section 24(b) of the Income Tax Act. This is in case of a self-occupied property
Which scheme is good for you?
To fix or float is the greatest dilemma that most home buyers face. A floating rate may appear cheaper and enticing. However, the borrower must remember that the rates may go up any time. Hence, he must set aside buffer funds to meet any sudden increase in EMIs. Many borrowers feel that lender is quick to pass on an increase in rates and hesitant to pass on the benefits of reduced rates. Talk to borrowers about their lenders while choosing one.
Pure fixed rates are offered by very few banks and the interest rates are quite high. Scheme like fixed for three years are increasingly becoming popular. At the end of three years, the borrower is automatically switched from fixed to floating scheme at the rate prevailing at that point of time.
You can benefit from the attributes of both fixed and floating loans in a hybrid loan. Here, the borrower locks a part of the loan under fixed and exposes the remaining to floating rate fluctuations.
What is EMI?
Equated monthly installment (EMI) can be broken down into two components – interest and principal. During the initial years of a loan repayment, it is mainly the interest payments that are being made while the principal amount is much less. Towards the end of the repayment tenure, a bulk of the repayment is made towards the principal component.
Larger the loan amount, higher the EMIs that borrowers have to repay month after month. Increasing the tenure of the loan can bring down your EMI
Tips for first-time Home buyer
Are you a first-time homebuyer? If you are, surely you’d agree that it is not easy at this stage for you, a first-timer, to get the perfect deal; but with a few basic tips on some proven techniques, a first-time homebuyer could successfully go through the buying process in a breeze and with minimal stress.
Buying a home is not just the biggest and the best investment that we make but also the realization of a dream. Here are a few guiding principles that one can keep in mind while acquiring a home for you and your loved ones.
Get your finances in order :- Your budget decides the square foot area and the locality for your home. Straighten Money matters by making sure that you have the right amount to make the down payments and the closing costs.
Be realists :- There is no prefect home. Keep in mind your practical needs while buying a home.
Choose your property broker wisely :- Select an agent who has an experience with buyers, is well versed with the neighbourhood and is not “pushy” and provide you the right facts while giving youenough space to make a choice.
Think Long Term :- Are you looking for a house with the idea of shifting base a few years or do you hope to stay in this home longer? This decision may dictate what type of home you will buy as well as the type of home loan model you take.
Do not over-extend your resources :- If you stretch yourself out to buy the biggest home you can afford, you’ll have no money left for maintenance, decoration or to save money for other financial goals.
Be sure of what you want :- Don’t ask too many people for opinions. It will drive you crazy. Select one or two people to turn to if you feel you need a second opinion. After you have done all this, trust your instincts and take that decision!
Buying a home is not just the biggest and the best investment that we make but also the realization of a dream. Here are a few guiding principles that one can keep in mind while acquiring a home for you and your loved ones.
Get your finances in order :- Your budget decides the square foot area and the locality for your home. Straighten Money matters by making sure that you have the right amount to make the down payments and the closing costs.
Be realists :- There is no prefect home. Keep in mind your practical needs while buying a home.
Choose your property broker wisely :- Select an agent who has an experience with buyers, is well versed with the neighbourhood and is not “pushy” and provide you the right facts while giving youenough space to make a choice.
Think Long Term :- Are you looking for a house with the idea of shifting base a few years or do you hope to stay in this home longer? This decision may dictate what type of home you will buy as well as the type of home loan model you take.
Do not over-extend your resources :- If you stretch yourself out to buy the biggest home you can afford, you’ll have no money left for maintenance, decoration or to save money for other financial goals.
Be sure of what you want :- Don’t ask too many people for opinions. It will drive you crazy. Select one or two people to turn to if you feel you need a second opinion. After you have done all this, trust your instincts and take that decision!
Revised Jantri may Impact Gujarat's Realty Market
Aimed at bringing the much-needed transparency in Gujarat’s real estate, the revised Jantri prices — a ready reckoner for stamp duty — may further put pressure on realty prices.
There is a mixed opinion on whether Gujarat’s real estate sector, which is showing signs of a slowdown, would see a price correction. However, a group of developers believe this may happen in the next three months.
Developers say the crash in the stock market may affect realty market in the coming days. And, the revised jantri rates may only make things worse as it will result in higher stamp duty making the transactions costlier.
As such, very few major land deals had been struck in the last one year or so, sources said.
In some distant pockets of Nikol and Vastral, the new jantri prices are 40-50-fold higher than the existing rates.
“There are some land parcels here where the actual price is Rs 119 per sq yard but the revised jantri puts it at Rs 4,000 per sq yard. Our business will get impacted due to this,” said Motibhai Prajapati of Madhav Group and member of the Eastern Builders Association.
Vijay Shah, a city-based developer said, last year in February, jantri prices were revised by 50 per cent and every April this was hiked by 5 per cent.
“There is no logic for such a steep hike in many places is it at Surat, Vadodara, Rajkot or Ahmedabad. The sector will itself see a correction of 15-20 per cent within the next three months,” he felt.
However, the revised jantri, would keep away speculators and see a rise in actual buyers, said Shrenik Shah, CEO of Space Management. “The number of transactions will come down and supply side will go up,” Shah added.
In a residential scheme, the number of investors is about 70 per cent, according to market estimates.
Some investors, who have been allotted residential properties in the upcoming schemes at a discount by the builders, are now exiting at a price, which is lower than what is being quoted by the builder, sources said
New Jantri In Ahmedabad
Gujarat is likely to be flooded with lakhs of new jantri rates for the entire state in about a week's time. The rates will decide stamp duty to be charged for each real estate deal.
Supposed to be government assessment of market value of real estate, the state revenue department has submitted the final draft of approximately 7.79 lakh grids, each containing a separate rate, for a final nod to Chief Minister Narendra Modi. "While some areas will see a rise in rates, others will witness a fall", a senior official said. "We are expecting government nod for the new rates any time after the by-elections to seven Assembly seats come to an end on September 10", a senior bureaucrat said.
The official added, "The grids include approximately 20,000 value zones identified in the state's urban areas. While land in rural areas has been divided into irrigated, non-irrigated, wasteland, residential area and so on, value zones of urban areas have been assessed on the basis of their commercial value."
Originally supposed to be kilometer-wise jantri for 1.97 lakh square kilometers of the state's area, the government decided to divide each kilometer into at least three parts to provide a more realistic assessment of real estate property.
"Plans are now being worked out to put each of the grids, including their survey numbers, on the web, so that anyone wanting to buy land can know the government's assessment of its market value", the bureaucrat said, adding, "Banks offering loan on real estate property, too, will find it easier to make an assessment."
The new jantris will simultaneously make it easier to calculate premium for converting land from new tenure to old tenure. New tenure land was allocated to poor farmers during the land reforms days. They are not allowed to sell the land directly to anyone without premium being charged by the government for converting the plot's land tenure status.
As for old tenure land, buyers can purchase land straight from the land owner. The new jantris will also tell the government the actual rate of government land before allocating it to anyone for educational or other social purpose.
Supposed to be government assessment of market value of real estate, the state revenue department has submitted the final draft of approximately 7.79 lakh grids, each containing a separate rate, for a final nod to Chief Minister Narendra Modi. "While some areas will see a rise in rates, others will witness a fall", a senior official said. "We are expecting government nod for the new rates any time after the by-elections to seven Assembly seats come to an end on September 10", a senior bureaucrat said.
The official added, "The grids include approximately 20,000 value zones identified in the state's urban areas. While land in rural areas has been divided into irrigated, non-irrigated, wasteland, residential area and so on, value zones of urban areas have been assessed on the basis of their commercial value."
Originally supposed to be kilometer-wise jantri for 1.97 lakh square kilometers of the state's area, the government decided to divide each kilometer into at least three parts to provide a more realistic assessment of real estate property.
"Plans are now being worked out to put each of the grids, including their survey numbers, on the web, so that anyone wanting to buy land can know the government's assessment of its market value", the bureaucrat said, adding, "Banks offering loan on real estate property, too, will find it easier to make an assessment."
The new jantris will simultaneously make it easier to calculate premium for converting land from new tenure to old tenure. New tenure land was allocated to poor farmers during the land reforms days. They are not allowed to sell the land directly to anyone without premium being charged by the government for converting the plot's land tenure status.
As for old tenure land, buyers can purchase land straight from the land owner. The new jantris will also tell the government the actual rate of government land before allocating it to anyone for educational or other social purpose.
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