I'm writing this blog which provides basic knowledge while buying property.
Please check the following points or documents prior to buy a property (I mentioned these based on my experience and/or knowledge). There might be some more things I might have missed.
1) Encumbrance Certificate (Or) Certificate of Encumbrance, in short known as EC.
2) Lawyer Consultation
Its better to give some thousands of rupees (as fees) to the lawyer instead of giving some lakhs of rupees to the Builder, Housing Construction Company, etc.
3) Approved Plan
4) Strict Agreement thereby if the property is not handover in the specified or in agreed time, the Constructing Company or Builder should return the money.
5) Sometimes verification can also be done by Financial Institutions (Banks, etc) for some fees thereby will know whether we can get the loan or not. Beware that some Financial Institutions might have links with the corresponding Construction Company or Builder or Real Estate Broker and might cheat us.
6) Background check of the Builder
The STORY behind this:
Most of the people's dream is having a home and it can be any form like Flat, Plot, Group House, etc. Similarly for me also. Decided to buy a Flat in my native place and identified a 2-BHK flat at 17.75 lakhs.
As per the initial agreement with the Builder, 3 lakhs to be paid in the beginning (before Registration), 5 lakhs at the time of Registration and the remaining amount later. Also the Builder agreed that he'll help us in getting the home loan. Of course no need of his help. If the plan is correct and we are eligible to get Home Loan, then Loan will be issued. We checked / roamed / tried with several Public Sector Banks and they rejected as the Initial Plan is different from the Constructing Plan.
In the mean time, Builder asked us to pay another 2 Lakhs as the processing of Loan would get late. Then after some negotiations we paid 1 Lakh. Thus we paid total 4 Lakhs from March 2011 to August 2011.
Later we tried with Private Financial Companies such as Sundaram Finance. Initially this finance company agreed for the amount (around 11 Lakhs) which we asked. Prior to start from my current location the Manager told Technical Evaluation was cleared, and hence traveled to my native place which is of 15 hours journey. At the time of signing the papers (i.e., terms and conditions), the person indeed Manager's assistant told the final amount to be decided only after the Technical Evaluation which means Technical Evaluation is not yet completed!!! Then I didn't sign. Called the Manager (who is in different branch), this time the Manager said that he already informed the same to me; but he didn't (He might have some sync up with the Builder, thereby will sign on the documents and return).
Important point(s):
The interest we paid for Home Loan can be shown under Income Tax as savings if and only if the full amount is dispersed, not on the partial amounts. Suppose in my case If I'm eligible to get 9 Lakhs after Technical Evaluation and Gross Salary, then the total amount will be dispersed in 3 installments (3 Lakhs per installment). The last installment will be released only if we get the Electricity and Water to our Flat (property) and we have to show the corresponding proofs to the Financial Institution. If the plan is not proper, again we need to give bribe in each and every stage. After all, we tend to give some amount (for us its 500 rupees) per month as maintenance charge!!! We'll loss our money if we buy these kind of properties. Instead of happiness of acquiring home, we'll cry later why we bought the property. Beware friends!!! Thus my years of savings amount is given to someone.
Finally this year i.e., in June, 2012 we decided to step back from taking the Flat and informed the same to Builder. First he tried to convince, but we didn't. If we ask about money, then for the first two months he told no one has come to buy the Flat. He used to tell whenever there is a party then he'll give the money. Next two months, he didn't pick up the call. Then from next month onwards his number is not working!!! By the time of posting this blog, the money is not yet received. Hope I get my money.
Being the native of our town, Graduate and doing job, but deceived by someone. Because unaware of some of the precautions to be taken while buying property.
These kind of things can happen anywhere irrespective of state or city or town or village. Please follow the necessary steps to buy property (and don't be hurry), and have a Home (Property)!!! All the best.
Note: Return to the main list, listOfBlogs
Please check the following points or documents prior to buy a property (I mentioned these based on my experience and/or knowledge). There might be some more things I might have missed.
1) Encumbrance Certificate (Or) Certificate of Encumbrance, in short known as EC.
2) Lawyer Consultation
Its better to give some thousands of rupees (as fees) to the lawyer instead of giving some lakhs of rupees to the Builder, Housing Construction Company, etc.
3) Approved Plan
4) Strict Agreement thereby if the property is not handover in the specified or in agreed time, the Constructing Company or Builder should return the money.
5) Sometimes verification can also be done by Financial Institutions (Banks, etc) for some fees thereby will know whether we can get the loan or not. Beware that some Financial Institutions might have links with the corresponding Construction Company or Builder or Real Estate Broker and might cheat us.
6) Background check of the Builder
The STORY behind this:
Most of the people's dream is having a home and it can be any form like Flat, Plot, Group House, etc. Similarly for me also. Decided to buy a Flat in my native place and identified a 2-BHK flat at 17.75 lakhs.
As per the initial agreement with the Builder, 3 lakhs to be paid in the beginning (before Registration), 5 lakhs at the time of Registration and the remaining amount later. Also the Builder agreed that he'll help us in getting the home loan. Of course no need of his help. If the plan is correct and we are eligible to get Home Loan, then Loan will be issued. We checked / roamed / tried with several Public Sector Banks and they rejected as the Initial Plan is different from the Constructing Plan.
In the mean time, Builder asked us to pay another 2 Lakhs as the processing of Loan would get late. Then after some negotiations we paid 1 Lakh. Thus we paid total 4 Lakhs from March 2011 to August 2011.
Later we tried with Private Financial Companies such as Sundaram Finance. Initially this finance company agreed for the amount (around 11 Lakhs) which we asked. Prior to start from my current location the Manager told Technical Evaluation was cleared, and hence traveled to my native place which is of 15 hours journey. At the time of signing the papers (i.e., terms and conditions), the person indeed Manager's assistant told the final amount to be decided only after the Technical Evaluation which means Technical Evaluation is not yet completed!!! Then I didn't sign. Called the Manager (who is in different branch), this time the Manager said that he already informed the same to me; but he didn't (He might have some sync up with the Builder, thereby will sign on the documents and return).
Important point(s):
The interest we paid for Home Loan can be shown under Income Tax as savings if and only if the full amount is dispersed, not on the partial amounts. Suppose in my case If I'm eligible to get 9 Lakhs after Technical Evaluation and Gross Salary, then the total amount will be dispersed in 3 installments (3 Lakhs per installment). The last installment will be released only if we get the Electricity and Water to our Flat (property) and we have to show the corresponding proofs to the Financial Institution. If the plan is not proper, again we need to give bribe in each and every stage. After all, we tend to give some amount (for us its 500 rupees) per month as maintenance charge!!! We'll loss our money if we buy these kind of properties. Instead of happiness of acquiring home, we'll cry later why we bought the property. Beware friends!!! Thus my years of savings amount is given to someone.
Finally this year i.e., in June, 2012 we decided to step back from taking the Flat and informed the same to Builder. First he tried to convince, but we didn't. If we ask about money, then for the first two months he told no one has come to buy the Flat. He used to tell whenever there is a party then he'll give the money. Next two months, he didn't pick up the call. Then from next month onwards his number is not working!!! By the time of posting this blog, the money is not yet received. Hope I get my money.
Being the native of our town, Graduate and doing job, but deceived by someone. Because unaware of some of the precautions to be taken while buying property.
These kind of things can happen anywhere irrespective of state or city or town or village. Please follow the necessary steps to buy property (and don't be hurry), and have a Home (Property)!!! All the best.
Note: Return to the main list, listOfBlogs
