STEP1 – Be
clear about your objective
What are you going to do with the land? - are you going to
build a building or leave it vacant for re-sell?
What is your budget? And importantly, what is the source of
fund? – Source of fund has implications on taxation (income tax, capital gains
tax etc.)
In whose name would it get registered? – Some states provide
discount in stamp duty for female owners.
How would the property be used for - Commercial,
residential, Industrial or Mixed? Check the city planning zones to verify if
mixed use is permitted or not.
STEP2 –
Based on your requirement, make a short-list
First start from choosing the location. Location is the
single most important factor in real-estate.
It always wise to short-list a few properties and do
preliminary screening for more than one property, because some of them are most
likely to be rejected at later stage due to some or other issues.
It is useful to consider current and future economic
activities in the surroundings, connectivity to public transport, proximity to
market, bank, hospital, schools etc.
Do personally visit the property during day and night time
as well do assess the locality and surroundings better. It would be a good idea
to take your spouse and kids also with you. They may notice somethings that you
might have missed or ignored e.g. garbage dumping near the site, a bar nearby
or things like that.
Hot-Tip – Once you start looking for different
options at multiple locations, you tend to gather new information about future developments
and other factors that you might have missed.
STEP3 – Be well
prepared for the negotiation
Once you are ready with your short-list, be well prepared
for price negotiation. Normally, the negotiations would happen before you go for further for legal and
other verifications. Do your home-work properly and gather information on
prevailing market condition and rates for that locality. Usually, the work done
during previous should provide sufficient basic information for this step.
Also, you should clearly specify the amount of brokerage that you would pay, if
applicable.
Hot-Tip – Local real-estate agents and online
portal are good point to start with.
Hot-Tip - Prefer to do negotiation with the
rightful owner and not with his agents.
Hot-Tip – Do not try to close deal in hurry.
There is always time to go for second round of negotiations.
STEP4 -
Take Legal Opinion
It is an essential step to make sure that the property has
clear marketable title, has all necessary government approvals and free from encumbrances.
Get ready with the documents when you approach the legal
expert.
Useful list of some important documents -
- Sale Deed/Mother Deed and all deeds of transfer in between Government Approvals – DC Conversion, Betterment charges Receipt
- Khata Certificate/Khata Extract
- R.T.C extracts, Mutation Records (MR) copy
- Land Sketch/City survey sketch/Map
- Municipal/Panchayat Tax paid receipts
- Encumbrance Certificate (EC) for past 33 years
- Power of Attorney (POA) attested by Embassy Official, if seller is NRI
Hot-Tip – Getting legal opinion from SBI empanelled
lawyer is cost effective, even if you are not taking loan from SBI. Also ensure
that the lawyer provides you the written title investigation and search report.
Hot-Tip – Better to get legal opinion from two
lawyers, if you are not sure about the lawyer’s credentials.
Hot-Tip – Get the certified copies of all past
sale deeds and encumbrance certificate yourself. Do not blindly trust the
documents given by owner.
Hot-Tip – Do all possible online searches/checks,
as far as possible. E.g. Cases pending in high court, RTC and MR data, Tax paid
data etc.
Hot-Tip
- Take extra caution if the land is inherited due to complicated inheritance laws.
If there are more than one owner, it would be wise to get a "release
certificate"/NOC from everyone involved before going ahead with the process.
Hot-Tip
– Also, verify that the land is in peaceful possession of the current owner.
Sometimes, papers are all correct but possession lies with another person (legally
or illegally). Better to avoid such properties.
STEP5 - Do
Physical measurement and local verification
Measure the property and make sure its dimension and
boundary description matches with the details in the documents.
Also, do enquire about the property from neighbors and try
to find out about any litigation or other issues (e.g. past history of the land
- burial ground/lake bed etc.)
Hot-Tip – Do not make monetary commitment before you are sure about the above points.
STEP6 – Enter
into the “Agreement to sale" deed
Applicable, if the title transfer is not going to happen
immediately. Ensure the exit clause for you and seller is clearly specified and
agreed. It also the time to approach financial institutions for loan, as the case may be.
Hot-Tip – It is always advisable to make all
payments by cheque/DD/Banking channel.
Hot-Tip – Take professional help for
documentation.
Hot-Tip - It might be helpful to get some activity done on the land to verify the prossession- e.g. you may get some type of fencing done or digging the foundation for compound wall etc.
Hot-Tip - It might be helpful to get some activity done on the land to verify the prossession- e.g. you may get some type of fencing done or digging the foundation for compound wall etc.
STEP7-
Title Transfer or Deed of Absolute Sale
When you are ready for title transfer, get the deed document
prepared with a professional, do thorough proof reading and pay proper stamp
duty as per law and get the title transferred along-with conveyance and
possession.
Hot-Tip – Take professional help for documentation.
Some useful resources collected from Web-
Bangalore-Development-Authority-Zoning-Regulations-RMP2015 -
https://drive.google.com/open?id=0B_HgBcXidHgNVDVqNkxESlFuZzQ
https://drive.google.com/open?id=0B_HgBcXidHgNVDVqNkxESlFuZzQ
Fundamentals of Documentation and Registration -
https://drive.google.com/file/d/0B_HgBcXidHgNV29uRjRmdmg0TTQ/view?usp=sharing
https://drive.google.com/file/d/0B_HgBcXidHgNV29uRjRmdmg0TTQ/view?usp=sharing
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