Background

Buyer Guide

Buying a property is perhaps the single biggest investment made by a person during his lifetime. Thus, you need to exert due caution in buying a house which lets your precious sayings go down the drain. After zeroing in on the desired property, you still have to wade through a formidable maze of tedious legalities and endless paperwork. Therefore, in order to cruise home in style, you ought to acquaint yourself with various legal jargons and other technicalities. Find out more about buying the property in India.
The title deed is the investigation into the title of the land, over a period of 30 years, states whether the property is unencumbered and has a clear and marketable title. The detailed report should be prepared for the seller by his lawyer and should be checked by the purchaser's lawyer. If the title is not clear and marketable, most of the major financial institutions would refuse to finance this property. Hence, you should approach a financial institution in order to check if they would provide a loan for that particular property.
For a project under construction, you should ask for the allotment letter and development agreement. The allotment letter contains details regarding the agreed price, payment and construction schedule, house plans, delivery date and builder's liability in case of late completion or problems after possession. It is issued to the buyer upon the payment of the 15% of the property value to the developer. The development agreement is linked between the builder and the land owner and contains details regarding the terms and conditions on which the landowner has permitted development of his property.
In case of the constructed properties, you should ensure that the seller has the title and the possession of the property as well as the rights to transfer the property. Check if the construction adheres to relevant planning authority requirements. Ensure that there are no tenants and get a declaration that the property was purchased from the seller's funds and is not mortgaged. Check whether dues such as property tax, society water and electricity bills etc. have been paid in full. Make sure to take possession of all the relevant documents and the original allotment letter, completion certificate, occupation certificate and all the other documents, given by the original builder.
The stamp duty is usually a percentage of the transaction value levied by the state government, on every registered sale. The agreement to sell clearly states the stamp duty, which is usually paid by the buyer, and he gets his name registered in the land revenue records. The final sale deed should be stamped and registered at the appropriate local area office. Both the developer/seller and the purchaser need to be present at the sub-registrar's office, for registering the agreement.
Bank and housing finance Companies offer various home loans with tailor made options to suit different payment capabilities. A simple understanding of home loans can help loan seekers in applying for suitable options. Why Home Loans?
  • Because rarely do people have the money to buy their dream home
  • Because one can avail the loan of up to 85- 95% of the total property cost
  • Because home loan offers tax benefits
  • Because one can take the property loan ranging from 1- 20 years
Types of Home Loans There are several types of home loans for different needs of the prospective loan seekers
  • Home Purchase Loan: Basic loan used to purchase new property.
  • Home Improvement Loan: To renovate or modify the existing property
  • Home Construction Loan: Given to construct new home
  • Bank Transfer Home Loan: These are usually new loans with lower interest rates, which are used to repay the old loan.
  • Land Purchase Loan: These are opted to buy fresh land for construction of new homes.
  • Bridge Home Loan: When people want to sell to sell their existing property to buy a new one.
  • NRI Home Loan: Popular home loan which aids NRIs in buying residential property in India.
Interest rates play an important role in determining whether it would be prudent to opt for a home loan. Interest rates on home loan is calculated on the monthly or yearly basis, either floating or fixed.
When the interest rates charged remain constant throughout the tenure of the loan is known as Fixed Interest Rate. It does not depend on the prevailing market rates. Opting for the fixed rate protects the loan seeker from the fluctuating interest rates in the market.
On the other hand, floating interest rate depends on the market rate. It is directly linked with the bank interest rate and the rise and fall in the prevailing market rates.

Different banks require different sets of documents for processing a home loan. Broadly, banks require following documents

Proof of Income
  • Copies of balance sheet, profit and loss account, computation of income and income tax records for last 3 years.
  • Salary certificate and form no. 16 for last 3 years
  • TDS certificate for last 3 years
  • Bank statements for entries of salary/ professional fees received for past 12 months.
  • Professional Qualification Certificates etc.
Title of the flat
  • Copy of the flat sale deed
  • Title report by the solicitor
  • Valuation report
  • NOC from Builder/ Society
  • Amenities Agreement
Other Documents
  • Age Proof- Copy of Passport, driving license etc
  • Proof of Residence- Copy of ration card, passport, society letter
  • Photographs with signature
  • Guarantor Documentation, if any