Buying a property is a single largest investment that comes after a lot of deliberation and caution. Just having the funds in place is not sufficient to buy a house. It is important to ensure that all documents are legally and technically sound so that you enjoy hassle free ownership.

Primary property

If the property is under construction, it is first essential to find out the credentials of the builder, his past history and his ability to meet timelines.

It is critical to find out if the builder has all the requisite legal approvals that are required for uninterrupted construction of property. Things such as allotment letter, development agreement, NOC from the municipal corporation, electricity board, and sewage board are among other things that should be in place. It is always not easy for buyers to check all of this because the builders are not very forthcoming and also buyers do not have the technical expertise. One way of getting some confidence in the project/builder is by approaching a financial institution to check if they would be willing to give a loan on the property. Lenders will do a thorough due diligence of the property before approving the loan because they have vested interest.

Many banks/FIs have a list of preapproved properties. If you buy a property from the pre-approved list, not only will the loan approval process be faster, you are also relieved of the headache of finding out the authenticity of the project.

Buying a house put up for resale

Seek the purchase agreement i.e. the agreement between the current seller and the previous owner to make sure of the title of the property. You should ensure that the seller has the title and possession of the property as well as the right to transfer the property. Find out if there are any claims, court litigation, zonal regulations, mortgages, loans on the property.

Ask for the original copy of the sale deed. If the seller has the original copy, it is an indication that the house is not under mortgage as the lending institution normally retains the original copy of the sale deed till the home loan has been repaid. Check whether all the dues such as property tax, water charges and tax, other society tax and electricity bills have been paid. In case the house is in a co-operative housing society, ask for a NOC and no dues certificate from the society.

Sale agreement

After the price and other terms and conditions have been negotiated with the builder in case of primary property or with the current owner, it needs to be formalised. This is done by an agreement between the buyer and the seller. This is prepared so as to ensure that none of the parties involved retract on any of the agreed clauses. The agreement has to be made on a stamp paper worth Rs 50.

The agreement will contain key details such as the down payment, total consideration, the payment schedule dates and quantum. In addition, the agreement will also contain details such as the size of the house, the location, the delivery date or the completion date in case of a property under construction and details of the buyer and seller. In addition, two independent witnesses would also have also to sign the document. Both the buyer and seller have to retain a copy of the agreement. From a buyer?s perspective, he should make sure that everything that is agreed upon forms part of the agreement as this is the only written evidence of the deal.

Sale deed

A sale deed also known as the conveyance deed is a document that gives the buyer absolute and undisputed ownership of the property. By executing this document the seller transfers his right to the purchaser, who, in turn, acquires an absolute ownership of the property. A sale deed comes into effect only at the time of possession of property. This document is executed subsequent to the execution of the sale agreement and after compliance of various terms and conditions detailed in the sale agreement.

Stamp duty & registration

The next step is to get sale deed registered in the presence of the buyer, seller and two witnesses at the office of the sub-registrar of assurances by paying stamp duty The duty is payable for both new and resale property and it a percentage of the transaction value. In case of resale, the change of title has to be registered in the name of the buyer and in case of a primary property; the buyer will be the holder of the title.