Home Buying Guide

BUYERSGuide

BUYERS

INDEXTO BUY OR NOT?

Owning Vs Renting? Investing in Real estate? Dos & Donts

HOME BUYING PROCESS

How to start? Everything first time home buyers need to know Things to consider before investing in a plot All about building approvals Check your payment plan Final property purchase checklist Choose the right location Technology that helps with property search Seek expert assistance

THE LOAN PROCESS

Pre-approved loans Documents required Pre-Payment of loan EMI Home Loan Insurance

01

03

11

NEGOTIATING & CLOSING THE DEAL

POST PURCHASE

Legal Assistance & registry and documentation Purchasing land from NRI Owner

RETURN ON INVESTMENT& WHEN TO EXIT

How to make the most of your investment? What is the right time to exit?

GUIDELINES FOR NRIsSELLING PROPERTY IN INDIA

VAASTU & FENG SHUI

Guidelines to ensure your property is vaastu compliant Doing up your homes with Feng Shui

19

21 GLOSSARY

13

14

18

16

1. OWNING VS. RENTING

Reasons For Renting

A question that plagues every potential first time home buyers mind is this - Should I just stay in a rented accommodation or should I take the plunge

and buy a property? There are advantages and disadvantages attached to both these property decisions. One must take certain factors into

consideration before making this crucial commitment as it will have a bearing on your overall financial well-being.

FlexibilityRenting a property gives a level of flexibility that owning a property cannot. If you are thinking about switching jobs and moving to a new city then

obviously purchasing a property is not something you should consider. The same applies if you dont have a stable job. Buying a property ties you

down to a specific location. While renting a property you can choose one which is close to work and within city limits.

Low rental ratesRental rates are low in India. Typically they amount to only 3 to 4% of the value of the property. One can save a huge chunk of money and if this

is invested wisely one can reap great benefits. If one is to think about purchasing property through home loans, a down payment which equals to

20% of the value of the property has to be made. And this is only if your credit rating is good. If it isnt, then the bank might ask you to pay more.

Then come the payments that need to go towards the registration process which would include stamp duty, registration fee etc. You would need to

deal with the EMIs (Equated Monthly Instalment) as well. Interest rates on loans tend to fluctuate and you might have to shell out more money down

the line. This is not to say that rental rates dont tend to fluctuate because of inflation. But if you dont have the kind of money that is required for

purchasing a property then renting might be the way to go.

No maintenance costsMaintaining homes is an expensive affair and can eat up your savings. If you rent a property you dont have to worry about maintaining it as the

responsibility falls on the landlord to fix any problems that may arise.

Reason For BuyingAssetOwning a property is one of the biggest investments a person can make

in his/her lifetime. Properties tend to witness capital appreciation over

time and are hence considered to be one of the top investment choices

alongside gold and mutual funds.

StabilityHaving a roof over your head tends to give you certain stability. You dont

have to deal with pesky landlords and their whims and fancies. When you

know that you are going to lay down your roots in a particular city, owning

a home there makes more sense.

Tax deductionsIf you have taken a home loan on a property you are going to live in, the

principal amount repaid up to 1.5 lakh qualifies for deduction under

Section 80C; while up to 2 lakhs of interest paid is tax-deductible under

Section 24.

Control over propertyYou have creative control over the property you own, which is not possible

with a rented property. If you want to carry out even the tiniest

modification to your rented accommodation you will have to get the go

ahead from the landlord. That is not the case when you own a home.

01

TO BUY OR NOT

1. OWNING VS. RENTING

Reasons For Renting

A question that plagues every potential first time home buyers mind is this - Should I just stay in a rented accommodation or should I take the plunge

and buy a property? There are advantages and disadvantages attached to both these property decisions. One must take certain factors into

consideration before making this crucial commitment as it will have a bearing on your overall financial well-being.

FlexibilityRenting a property gives a level of flexibility that owning a property cannot. If you are thinking about switching jobs and moving to a new city then

obviously purchasing a property is not something you should consider. The same applies if you dont have a stable job. Buying a property ties you

down to a specific location. While renting a property you can choose one which is close to work and within city limits.

Low rental ratesRental rates are low in India. Typically they amount to only 3 to 4% of the value of the property. One can save a huge chunk of money and if this

is invested wisely one can reap great benefits. If one is to think about purchasing property through home loans, a down payment which equals to

20% of the value of the property has to be made. And this is only if your credit rating is good. If it isnt, then the bank might ask you to pay more.

Then come the payments that need to go towards the registration process which would include stamp duty, registration fee etc. You would need to

deal with the EMIs (Equated Monthly Instalment) as well. Interest rates on loans tend to fluctuate and you might have to shell out more money down

the line. This is not to say that rental rates dont tend to fluctuate because of inflation. But if you dont have the kind of money that is required for

purchasing a property then renting might be the way to go.

No maintenance costsMaintaining homes is an expensive affair and can eat up your savings. If you rent a property you dont have to worry about maintaining it as the

responsibility falls on the landlord to fix any problems that may arise.

Reason For Buying

Investing in real estate can be a very tricky proposition. In most instances people tend to put in all their savings, plus take loans to purchase a property. This being

the case, one has to exercise extreme caution at all stages of the purchase, to ensure that the money one sinks into real estate does not go to waste.

It is best not to invest in far flung locales which lack even basic amenities such as roads, water supply and drainage system. Do not get swayed by promises of upcoming

infrastructural projects and invest your money. Infrastructural projects take time to kick off and it is best not to pin too much hope when you are yet to see proof.

IndiaProperty realizes the crucial part these factors play when it comes to making property choices. The site provides expert analysis of localities based on these factors through

micro market reports and its locality pages.

Checking credentials of the builderThe real estate industry is littered with builders who are upstarts and are unreliable. If you come across an offer that is too good to be true from a small time builder, it is best

not to funnel your hard earned money into that project. The best way to go about checking the credibility of builders is to look at their past projects. This will give you a clear

idea about how a particular builder works and if you can trust him with your money.

Legal documentsTitle deeds are the key to any property transaction. If the seller does not have a clear title deed, then do not purchase the property

Absence of a clear and marketable title deed is a deal breaker as it will lead to legal hassles in the future

Insist on seeing the original title deed and have it verified by your attorney before buying the property

Ensure that all clearances related to the property are in place before you acquire the property

If you are looking to purchase an under-construction property, get the builder to handover the allotment letter and the development agreement

The allotment letter has details such as the price of the property, floor plan, delivery date of the project and details of the liability incurred

by the builder if there is a delay in delivering the project

The development agreement lists out the terms and conditions under which the landowner has allowed the builder to use his property

Ensure that all the taxes related to the property you are about to purchase have been cleared before you actually buy the asset

Whenever in doubt, it is always advisable to take expert assistance

Delay in deliveryWhen you decide to purchase an under-construction property, chances are that the project may be delayed. A delay of 6 months is acceptable but anything that goes beyond

a year or more is bad news for you. Picking projects which are in the pre-launch stage are considered to be very risky. To mitigate such risks, check the delivery track record

of the developer and look out for projects which are in the under-construction or ready to occupy stage.

2. INVESTING IN REAL ESTATE? DOS AND DON'TS

BudgetBefore taking the plunge and buying the property you have your eyes on, it is essential

to get your finances in order. Set yourself a budget and try not to stray far away from

it. Remember not to spend money that you cannot afford to spend in the first place.

You should ensure that the EMI going out of your pocket is not more than 40% of your

monthly income.

ResearchNow that you have gotten your finances in order, it is important for you to do your

homework. You will know your requirements, so work with localities which are a

match for those requirements. Some of the basic criterias one should keep in mind

while researching are:

Location

Access

Existing and proposed infrastructure projects

Connectivity

Presence of social infrastructure

Safety

02

HOME BUYING PROCESS1. HOW TO START?Starting your property search is always a tough task. You might come across a number of unfamiliar circumstances and situations. It can be an

intimidating process, especially when there are so many legal and technical jargons that are thrown at you. Be prepared to handle any legalities

that come your way. Have this guide handy for any property search queries and requirements.

Types of property ownership:In India, two types of property ownership rights exist- freehold and leasehold.

03

2. EVERYTHING FIRST TIME HOME BUYERS NEED TO KNOW

In India the profile, age and socio-economic status of the first-time home owner is gradually changing. Planning to buy a home starts very early on.

However, what remains unchanged is the hesitation and trepidation that comes with making such a major decision. First-time home buyers in India need a lot of caution

and due diligence before signing on the dotted lines of a home buyers agreement. The following tips are intended to guide first time home buyers as they finalise one

of the most crucial investments.

Financial planningIt is essential to ensure proper financial planning before you make the decision to invest in a property. The first step would be to review your current financial obligations

such as student loans, life insurance or any other commitments to get an essence of your true monthly income. Your budget for buying your home should be based on

your household budget and how much money you can afford to put aside for the EMI of a home loan. Besides the EMI you should have a healthy savings account that

can pay for the additional incidentals such as stamp duty, registration, car parking, club house charges and other sundry charges by the builder. An important advice

by financial experts is to set aside 4 to 5 EMIs as reserve funds for unforeseen circumstances such as loss of employment or any situation that exerts pressure on financial

resources available at your disposal.

Assess your future needs and goalsWhen deciding to invest in a property, its important to not only have a clear picture of your present needs but also take into account your future needs and goals.

Some of us are just looking for a home for our family, some of us want capital appreciation through a long term investment. Some just want to be part of a new upcoming

complex or some want to move closer to their workplace. When we invest we should be clear about our goals to ensure we make an informed choice.

For e.g. if you are planning on raising a family, investing in a bigger house, with good schools and parks in the vicinity would be an important consideration.

Learn about different interest rate optionsA common dilemma for the first-time home investor is choosing between a fixed rate of interest and a floating rate of interest. A consumer has to choose between peace of

mind by opting for fixed home loan where the interest rate remains constant during the entire loan tenure and does not change with market fluctuation or should they take a

risk by going for floating loans. In this scenario the interest rate is dependent on the market and fluctuates according to the economic situation in the country.

A new option that is growing in popularity is the fixed-floating home loans that come with a fixed interest rate in the initial years and floating rates thereafter. This option gives

customers stability on their EMI outflows for the first few years, thus helping them plan finances better and provides protection against future fluctuations in interest rates.

Experts believe that given a choice,

a buyer should prefer freehold property

over leasehold as the title is absolute and

clear. Additionally, freehold properties

are more stable and are likely to increase

in value in the longer term. Also a

freehold property has better marketability

and can be sold, mortgaged or kept for

standing security, which cannot be done

with leasehold property.

A freehold property ownership is the most common

form of property ownership in India. It essentially means that the buyer has complete legal ownership rights over the property. He can stay,

sell or transfer the ownership to another party.

Freehold property

Leasehold properties cannot be transferred

easily like freehold properties. They always require a Power of Attorney for conducting transactions, which ceases to

exist with the death of the owner or the seller.

Transfer of property

If your property requirement is short

term or only for a few years, you can easily get access to a property by

way of negotiating a lease.

Short term investment

In a leasehold form of

property ownership, you just own the building and not the land. This ownership is for a stipulated period of time ranging up to 99 years. Once the set period in the

lease expires, the property reverts to the original

owner.

Leasehold Property

If you are delaying your

decision to buy a property just because the price is too high,

but you are ready to sacrifice your absolute ownership, you can easily get access to the property by

way of negotiating lease.

Financial limitations

A freehold property gives the complete legal

ownership of the property to the buyer, whereas in a

leasehold property ownership, the buyer is not an owner but

only a lessee, with limited rights.

Absolute ownership

A freehold property makes for a better

investment choice as there is no uncertainty about the future of the property. This ensures

better marketability of the property. It can also be sold

or mortgaged in a financial crisis.

Investment choice

04





















Experts believe that given a choice,

a buyer should prefer freehold property

over leasehold as the title is absolute and

clear. Additionally, freehold properties

are more stable and are likely to increase

in value in the longer term. Also a

freehold property has better marketability

and can be sold, mortgaged or kept for

standing security, which cannot be done

with leasehold property.

Improve your CIBIL scoreCIBIL is Indias first credit information company, also commonly referred to

as a Credit Bureau. The CIBIL TransUnion Score plays a critical role in the

loan application process. After an applicant fills out the home loan

application form and hands it over to the lender, the credit score and

credit report of the applicant is immediately checked. If the credit score is

low, the lender may not even consider the application further and reject it.

However if the applicant has a good credit score, he is considered

credit-worthy and this improves the chances of the loan being approved.

A high CIBIL score also can make the loan available at a cheaper

interest rate.

Go loan shoppingShopping around for a home loan will give you a great market insight

and help you select the best suited financing option. Comparing loans

and negotiating with banks can save you a lot of money. Once you know

what each bank has to offer in terms of rates and fees, negotiate for the

best deal. These days, banks also offer home loan insurance as a bundled

product along with your home loan that protects your family from loan

liabilities in case of your unfortunate demise within the policy term.

When selecting for a lender, it is also advisable to check the prepayment

penalty and foreclosure charges. You can also consider co-ownership

between two family members to get a bigger loan amount.

Get a pre-approved loanA pre-approved home loan means that the bank or financial institution has

carried out their due diligence checks on your credit report and have made

a virtual confirmation of the loan and the loan amount. This pre-approved

home loan boosts the confidence level of the purchaser and gives him

a clear idea of the budget within which he will be able to buy a house.

The buyer will also have clarity in terms of EMIs that will need to be paid and

can accordingly plan their finances. However the buyer must be aware that

once he gets the pre-approval for a loan, he has only a limited time-frame

within which to finalise the property, failing which the pre-approval can be

cancelled.

Research locationsLocation is another key factor to consider before making an investment.

It is always prudent to buy in a high-growth area where there is potential

for growth and subsequent capital gains. Keep things like connectivity to

business areas, proximity to educational institutions, malls, hospitals and

other important social infrastructure in mind. It is also important to be

aware of future planned developments in the area that could have

a positive or detrimental effect on the future value of the property. At the

same time, the location should be suited to your personal requirements

and budget. A healthy mix of the above two considerations will guide you

towards your ideal location.

Credibility of the builderBefore purchasing a property one should look into the credibility of the

builder. This essentially means checking on the developers past projects,

their previous projects, quality of construction, rate of appreciation in

value, current demand in the market and number of future projects that are

being undertaken. It is also an added advantage if the developer is

affiliated with a governing body like CREDAI.

Understand your payment planFor a new property it is also advisable to check with the builder on

a construction-linked payment plan or a time-linked payment plan and the

cash versus cheque component. This will have an effect on your cash flow

and other aspects of your personal finance.

A. Construction linked payment planUnder this plan you are paying an initial booking amount

upfront while the rest is linked to construction milestones, say 10% with

each floor constructed.

B. Time linked payment planYou pay according to a set timetable, whether the construction is on time or

not. Under this plan you are contractually bound to pay your instalments,

even though the property has been delayed.

However, the RBI recently issued a circular asking banks to desist from

upfront disbursal of sanctioned housing loans to builders and instead link

housing loans to stages of construction of a project to protect the home

buyer and the lender from additional risks. This is primarily to protect

the home-buyers against endless delays in the construction of new projects.

Legal due diligence on the propertyOne must also check all the sanctions, plan approvals and agreements to

ensure that the builder has completed regulatory and legislative

obligations before investing in a property. Any deficiency on this front

can lead to serious consequences for the buyer.

Carpet, built-up and super built-up areaDuring purchase of a flat/property, there should be no ambiguity related

to carpet area, built-up area and super built-up area.

The carpet area is the space available for flooring a carpet,

the built-up area is the carpet area including the wall,

balcony space and other areas.

The super built up area is the built area plus the corridor,

parking space etc. It also includes the area for common use like lobby,

lifts, staircase and alley.

This difference between the super-built up and carpet area is called

loading. When you are buying a property, it is important to ensure that

you are paying for the carpet area and not for the super built up area

that sometimes has a loading of nearly 30-40%.

NegotiateDo not hesitate to negotiate better rates. Sometimes builders might be

willing to offer promotional discounts during festive seasons or if their

sales are slow. Also when buying a new property in the initial stages of

construction, do enquire about special pre-launch and launch

offers and prices.

Allotment letterOnce you have selected a property and made the initial payment, you

will receive an allotment letter from the builder. This allotment letter

includes the details of the flat that has been allotted to you, such as the flat

number, area, price the payment details, any extra charges levied to you

on amenities such as car parking, club membership and maintenance

charges to be levied at time of occupancy.

If you have a preference for a certain floor or view, then you must request this

from the builder at the time of the initial application with the builder. Once the

allotment letter is given to you, your flexibility to change your unit might be limited.





















05

Understand your payment planFor a new property it is also advisable to check with the builder on

a construction-linked payment plan or a time-linked payment plan and the

cash versus cheque component. This will have an effect on your cash flow

and other aspects of your personal finance.

A. Construction linked payment planUnder this plan you are paying an initial booking amount

upfront while the rest is linked to construction milestones, say 10% with

each floor constructed.

B. Time linked payment planYou pay according to a set timetable, whether the construction is on time or

not. Under this plan you are contractually bound to pay your instalments,

even though the property has been delayed.

However, the RBI recently issued a circular asking banks to desist from

upfront disbursal of sanctioned housing loans to builders and instead link

housing loans to stages of construction of a project to protect the home

buyer and the lender from additional risks. This is primarily to protect

the home-buyers against endless delays in the construction of new projects.

Legal due diligence on the propertyOne must also check all the sanctions, plan approvals and agreements to

ensure that the builder has completed regulatory and legislative

obligations before investing in a property. Any deficiency on this front

can lead to serious consequences for the buyer.

Carpet, built-up and super built-up areaDuring purchase of a flat/property, there should be no ambiguity related

to carpet area, built-up area and super built-up area.

The carpet area is the space available for flooring a carpet,

the built-up area is the carpet area including the wall,

balcony space and other areas.

The super built up area is the built area plus the corridor,

parking space etc. It also includes the area for common use like lobby,

lifts, staircase and alley.

This difference between the super-built up and carpet area is called

loading. When you are buying a property, it is important to ensure that

you are paying for the carpet area and not for the super built up area

that sometimes has a loading of nearly 30-40%.

NegotiateDo not hesitate to negotiate better rates. Sometimes builders might be

willing to offer promotional discounts during festive seasons or if their

sales are slow. Also when buying a new property in the initial stages of

construction, do enquire about special pre-launch and launch

offers and prices.

Allotment letterOnce you have selected a property and made the initial payment, you

will receive an allotment letter from the builder. This allotment letter

includes the details of the flat that has been allotted to you, such as the flat

number, area, price the payment details, any extra charges levied to you

on amenities such as car parking, club membership and maintenance

charges to be levied at time of occupancy.

If you have a preference for a certain floor or view, then you must request this

from the builder at the time of the initial application with the builder. Once the

allotment letter is given to you, your flexibility to change your unit might be limited.

06

Site visitsMaking regular site visits to your property when it is under construction is important so that you can check the status of construction and quality of materials used.

If you want to make minor non-structural changes such as the layout of the kitchen or change the plumbing fixtures, this would be the best time to get it done.

Sale deedA sale deed is one of the most valuable legal documents in purchase or sale of a property. It is governed by the Registration Act and is an important document for

both the buyer and the seller. The purchase or sale of property is not legally complete until a sale deed is signed between the buyer and the seller. Usually a sale

deed is signed only after both the parties are satisfied and comply with the terms and conditions in the agreement.

Verify all legal documentsThere are a lot of important legal documents without which the sale of a property is not complete. It is the duty of the buyers to verify all these documents and ensure that

they are duly signed. Some of these legal documents include - share certificate, sale agreement, society documents, sanction plans and encumbrance certificate.

Possession and registrationThe final step that will complete the purchasing process is possession and registration. Possession is the physical transfer of the property, but is not sufficient to

establish legal transfer of ownership. For this you will have to get the property registered in your name with the local authority, with the seller documenting that the

property is being transferred to you. At the time of registration you will also have to pay a stamp duty which is a government tax levied on property transactions.

Maintenance by the builderWhen the construction is complete the developer receives an Occupancy Certificate (O.C) by the local body that confirms the hand-over of the property to the buyer.

From the date of receiving this certificate to the next 18 months the developer is responsible for the maintenance of the building. This includes general cleaning,

security, payment of electricity charges for the common areas, property tax, running costs of generator sets and any repair or maintenance works.

Formation of the housing societyThe developer initiates the formation of a housing society. The builder normally creates a bank account in the name of the society and transfers the unspent money

on the project. The society elects it representatives and takes the responsibility of the maintenance of the building and collection of maintenance charges.

Property search routeNewspapers today are cluttered with property ads, realty brokers have offices in every site and there is no dearth of property information online. But with todays

busy schedules, sieving through the market and gathering information can be a daunting task. Understanding this challenge, IndiaProperty.com has designed a

special tool to guide you as you navigate the property markets. Assisted Property is a unique service that assigns a dedicated property search manager to research,

review and shortlist properties suited to your requirements.





















To know morecall Assisted Property on3333 7777Not only will this service help you save valuable time in short listing properties,it will also book site visits for you, evaluate your selected property and help you source home loan and legal assistance if needed.

Site visitsMaking regular site visits to your property when it is under construction is important so that you can check the status of construction and quality of materials used.

If you want to make minor non-structural changes such as the layout of the kitchen or change the plumbing fixtures, this would be the best time to get it done.

Sale deedA sale deed is one of the most valuable legal documents in purchase or sale of a property. It is governed by the Registration Act and is an important document for

both the buyer and the seller. The purchase or sale of property is not legally complete until a sale deed is signed between the buyer and the seller. Usually a sale

deed is signed only after both the parties are satisfied and comply with the terms and conditions in the agreement.

Verify all legal documentsThere are a lot of important legal documents without which the sale of a property is not complete. It is the duty of the buyers to verify all these documents and ensure that

they are duly signed. Some of these legal documents include - share certificate, sale agreement, society documents, sanction plans and encumbrance certificate.

Possession and registrationThe final step that will complete the purchasing process is possession and registration. Possession is the physical transfer of the property, but is not sufficient to

establish legal transfer of ownership. For this you will have to get the property registered in your name with the local authority, with the seller documenting that the

property is being transferred to you. At the time of registration you will also have to pay a stamp duty which is a government tax levied on property transactions.

Maintenance by the builderWhen the construction is complete the developer receives an Occupancy Certificate (O.C) by the local body that confirms the hand-over of the property to the buyer.

From the date of receiving this certificate to the next 18 months the developer is responsible for the maintenance of the building. This includes general cleaning,

security, payment of electricity charges for the common areas, property tax, running costs of generator sets and any repair or maintenance works.

Formation of the housing societyThe developer initiates the formation of a housing society. The builder normally creates a bank account in the name of the society and transfers the unspent money

on the project. The society elects it representatives and takes the responsibility of the maintenance of the building and collection of maintenance charges.

Property search routeNewspapers today are cluttered with property ads, realty brokers have offices in every site and there is no dearth of property information online. But with todays

busy schedules, sieving through the market and gathering information can be a daunting task. Understanding this challenge, IndiaProperty.com has designed a

special tool to guide you as you navigate the property markets. Assisted Property is a unique service that assigns a dedicated property search manager to research,

review and shortlist properties suited to your requirements. 3. THINGS TO CONSIDER BEFORE INVESTING IN A PLOT

Investing in plots has always been considered a lucrative financial option. While apartments and villas have been the most popular property

investment choices, there are many buyers who prefer investing in plots especially for the capital appreciation it offers. A plot that is bought in a

high growth neighbourhood or a new market, is attractive for all sectors - from residential to commercial. As the suburb nears its growth potential

and begins to saturate, plots increase in value and offer good value for the seller. Any new infrastructure development in a neighbourhood will also

drive prices upwards. However when buying a plot, it is important to understand the various factors that influence the price of plots.





















Floor Space Index (FSI)The floor space index or FSI gives an indication of how much built up space

can be constructed based on different parameters of setbacks, road widths

and ofcourse, the plot size. This is often determined by the local authorities

and has a direct effect on the price of the plot. The higher the FSI, the

greater is the space available for construction and hence higher the value.

Soil Type It is necessary to ascertain the soil type and ground water of a plot before

buying it. If the plot is unsuitable for deep digging, unstable or extremely

rocky, it would make the plot geologically unstable. This means the ground

would not be able to support any structure. The absence of sufficient

ground water would also be a major drawback, negatively effecting

the price of a plot. Before investing in a plot, it is essential to do

a basic site visit to understand the property with reference to the metrics

given above.

Location This is the most primary consideration when determining the price of the

property. The prevalent price trends will also be applicable to the plot.

In a high growth or a popular location with many new infrastructure

development, the prices will be higher than in an emerging neighbourhood.

ConnectivityAnother prime determinant of the price of a plot is the connectivity factor.

This is not only to the main roads and highways but also the other parts of

city through road and rail.

Civic Infrastructure The development of local civic infrastructure with amenities like water

supply, electricity, power, sanitation, drainage system, street lights and

mobile coverage make for a more appealing plot investment when

compared to buying land without any of these basic civic amenities.

07

08

4. ALL ABOUT BUILDING APPROVALS

Getting the necessary approvals to construct is one of the toughest task when it

comes to buying a property. Before getting to the construction, you have to check

the land title to see if it is clear. If the title is not clear, the project might not take off

and the investor will land in trouble. Just remember that there are a number of

agencies is involved in the approval game and the investor will be in trouble even

if one approval has been withheld. Delays in project approvals translate into an

escalation of 35-40% in the construction costs. The customers can also benefit with

a saving of 15-25% merely by cutting down the delays in the approval processes.

Why do you need approval?

For multi-storied apartmentsIn case of a big residential projects, 40 different approvals are required from central

and state government agencies. Approvals are required from central and state

government agencies. Approvals are required for land conversion and land use as

well as for environmental clearance. These two categories take the most amount of

time to obtain. In the case of tall buildings in the vicinity, approval has to be obtained

from the Airport Authority of India, if the building is to developed near a heritage

building, then the approval has to come from the Archaeological Survey of India and

so on. Each agency will study the impact of the project and then approve it.

Approvals have to be obtained by the builder. Before you enter into an

agreement with the builder insist that he shows all the letters of approval from the

various government agencies. It is the best if you have a written agreement with

the developer. The agreement should clearly set out the following:

Specification of the apartments.

Terms and conditions

Payment plans

Date on which the builders will hand over the apartment

Penalty clause if either party defaults

Ask if there are any hidden costs as otherwise you

may be in for rude surprise later on.

For plotsIf the land has been purchased though a government agency, such as the City &

Industrial Development Corporation (CIDCO) in Navi Mumbai or the Delhi

Development Authority (DDA) in Delhi, ask for the allotment letter.If the land is

acquired from a farmer, ask for the title deed which mentions his name and how

he came to inherit the property.

For resale propertiesIn case of an old house, the buyer must get the following:

Vacant possession - it refers to a legal obligation to ensure that the property

is a state fit to be occupied at a given point of time.

Encumbrance certificate (EC) - It is an evidence that the property

in question is free any monetary and legal liabilities.

Property tax receipts.

In case of a newly constructed house, one should ask for Occupation Certificate

(OC), to make sure that sewage, water and electricity connections are in place.

The OC from a government agency is important as it means that the building is fit

for human habitation and that all the approvals have been obtained and that the

builder has kept all the norms.

In case of purchasing a resale apartment, you must ask for the share certificate

which is given by the society. The share has to be transferred to your name and

this certificate will be part of the ownership deed. You will have to check the No

objection certificate (NOC) issued by the society.

Buying though power of attorneyPurchasing a property can also be done through power of attorney. In most

cases it is done to evade stamp duty. The title of the property remains in the name

of the original owner but the right to use and enjoyment of the property goes with

the buyer. The buyer can also transfer the land to another buyer later on. But the

title will remain in the name of the original owner. This leads to fraud and is one

reason why banks dont lend to people whose land has been purchased through

power of attorney. It is always better invest in a freehold property from a person

who legally owns it and register it in your own name.

Other approvalsCompletion certificate.The completion certificate issued by the municipality or the corporation is easily

the most important approval which has to be got. This certificate will prove that

the builder has complied with rules such as height of building, distance from the

road and adherence to plan. The occupation certificate should also verified to

ensure sewage, water and electricity connections.

These are few approvals are a must before any project gets the green signal:

Building plan and floor plan approvals.

Structural safety certificate.

NOC ( No Objection certificate ) from the civic authority.

Urban land ceiling certificate

Commencement certificate.

Title deed.

Occupation certificate.

A team at AssistedProperty carries out a thorough check to see if a property has

received all the approvals listed here. AssistedProperty only recommends

properties which are approved by the government.

Sign-up with AssistedProperty today or call the IndiaProperty customer

services team on (+91) 9281 00 11 11 to avail this service.





















Floor Space Index (FSI)The floor space index or FSI gives an indication of how much built up space

can be constructed based on different parameters of setbacks, road widths

and ofcourse, the plot size. This is often determined by the local authorities

and has a direct effect on the price of the plot. The higher the FSI, the

greater is the space available for construction and hence higher the value.

Soil Type It is necessary to ascertain the soil type and ground water of a plot before

buying it. If the plot is unsuitable for deep digging, unstable or extremely

rocky, it would make the plot geologically unstable. This means the ground

would not be able to support any structure. The absence of sufficient

ground water would also be a major drawback, negatively effecting

the price of a plot. Before investing in a plot, it is essential to do

a basic site visit to understand the property with reference to the metrics

given above.

5. CHECK YOUR PAYMENT PLAN Over the last decade, the scale of development in all Indian Tier I and Tier

II cities has been colossal. In recent times, the real estate sector has proven

itself to be a lucrative investment platform. Real estate also follows the high

risk-high return game motivating buyers to invest in a property during

early stages of construction for higher returns.

With increasing borrowing rate from financial institutions, developers

have started devising new schemes to fund their projects. They offer

innovative payment plans for the buyers. In reality, sometimes these plans

usually end up entrapping the buyer.

The most widely used payment plans today are the 80:20 Plan, Flexi Plan,

Down Payment Plan and Construction Linked Plan. With difference in their

execution all these payment plans target buyers for bulk payments.

80:20 PlanThis plan is similar to the Subvention Plan, except the buyer pays 20% of

the property value at the time of booking and rest is paid by the bank. The

base price for such schemes is higher compared to the actual base price

for the project. Also, such projects have higher probability of getting

delayed. Moreover, even after 2-3 years the principal loan amount for the

buyer remains the same. So, eventually you are paying more as cost of the

property is higher than normal and so is the interest paid.

Down payment planHere the buyer pays 95% of the property value during initial months of

booking (usually within 1-3 months duration). In such cases the builder

gives a discount to the buyer (around 10-15% on the base price).

Flexi planIts a combination plan where the buyer pays close to 40-50% of the

property value initially and the balance amount is paid in equal

instalments or the balance amount gets coupled to the construction

linked plan. Here also buyer is given a discount.

Construction Linked PlanAs the name suggests after booking the property, the disbursement of

future payment is dependent on the construction of the property. Usually

these stages are as per laying of the structural slab at various levels. But

for under construction linked plans, around 80-90% of the payment is

taken by the developer within first few years of the purchase and mostly

post structural work show a slow progress. Under normal circumstances a

construction linked plan is logical as the payments are disbursed in parts

and interest paid is less than other plans. Also if the buyer has savings in

the future he neednt use the whole loan value.

Risks involved Many times when projects face heavy execution delays, there are

chances of developers taking the buyers for a ride. With no progress

or super slow progress of the project, huge sum of buyers money gets

trapped. In the end a buyer pays EMIs or higher interest on loan, but

has no clue when he would get possession of his house.

Its a buyers duty to keep his eyes open even after purchasing the

property. He should at regular time intervals visit the project site to check

the progress of the project. Also keeping a record in form of pictures is

a good option to compare the projects progress over time. In cases

where a buyer is an NRI or lives in some other city he should make sure

that a friend or relative is doing the same on his behalf.

In case of a township having multiple towers, the buyer should ensure

that he is paying as per progress of his tower and the developer is not

misleading him. Also, at regular intervals especially before releasing the

next payment, a buyer should open and check his payment plan to verify

the agreed upon timelines. For a better home buying experience - be an

informed and active customer rather than an ignorant one.

6. FINAL PROPERTY PURCHASE CHECKLISTThe task of buying a property is tedious. The buyer must not base his

property buying decision on locality and budget alone. He must

consider other critical aspects such as the appreciation value of the

property, investment benefits from that property, builder reputation,

home loan approvals and the legal hassles involved, if any.

So here is a check list for you that will come in handy while you buy your

property.

Parties involved in the property purchase Check if the property that you wish to purchase is in the name of the

sell or if there is a joint venture development involved. The name and

land title must be in the name of the seller.

Get the identity and address proof of the seller.

To avoid any future disputes from children of the seller (who are not

minors), their signature must be obtained on the bond/agreement.

Any claim over the property by blood relatives of the seller, in the future,

must be handled by the seller and a clause ensuring the same must be

inserted in the sale deed.

Through every stage of negotiation and purchase, check to see if there

are any third party interests, suppression of previous transaction, prior

agreement or litigations involved.

Previous dues paid and settled Check if all dues like Land Revenue, Municipal Tax, Water Tax, Electricity

Board Charges etc. have been paid before the purchase is made.

Also check if any loan has been obtained on the property. If yes, then

include a clause in the sale deed stating that the seller is responsible for

all the dues dated before the purchase.

In case of future disputes involving the seller, add a clause in the deed

holding him responsible to clear and settle all such disputes.

Important Documents Ask for the parental document

(also called the moola pathram in many states)

The sale deed must clearly show the details of

the property - door/flat/Plot no., land area etc.

Obtain the No Encumbrance Certificate.

Obtain receipts of all payments made and the receipts

of tax payments made - water, property, corporation,

municipality, electricity, revenue etc. onto the date of purchase.

Confirm the originality of stamp papers. Check to see if the

date of purchase of the stamp paper matches the date of documents.

Now that you have a checklist, what are you waiting for?

Start your property search now with AssistedProperty.com. Just log onto

www.assistedproperty.com and let us help you find your perfect home.

09

10

In case of a township having multiple towers, the buyer should ensure

that he is paying as per progress of his tower and the developer is not

misleading him. Also, at regular intervals especially before releasing the

next payment, a buyer should open and check his payment plan to verify

the agreed upon timelines. For a better home buying experience - be an

informed and active customer rather than an ignorant one.

6. FINAL PROPERTY PURCHASE CHECKLISTThe task of buying a property is tedious. The buyer must not base his

property buying decision on locality and budget alone. He must

consider other critical aspects such as the appreciation value of the

property, investment benefits from that property, builder reputation,

home loan approvals and the legal hassles involved, if any.

So here is a check list for you that will come in handy while you buy your

property.

Parties involved in the property purchase Check if the property that you wish to purchase is in the name of the

sell or if there is a joint venture development involved. The name and

land title must be in the name of the seller.

Get the identity and address proof of the seller.

To avoid any future disputes from children of the seller (who are not

minors), their signature must be obtained on the bond/agreement.

Any claim over the property by blood relatives of the seller, in the future,

must be handled by the seller and a clause ensuring the same must be

inserted in the sale deed.

Through every stage of negotiation and purchase, check to see if there

are any third party interests, suppression of previous transaction, prior

agreement or litigations involved.

Previous dues paid and settled Check if all dues like Land Revenue, Municipal Tax, Water Tax, Electricity

Board Charges etc. have been paid before the purchase is made.

Also check if any loan has been obtained on the property. If yes, then

include a clause in the sale deed stating that the seller is responsible for

all the dues dated before the purchase.

In case of future disputes involving the seller, add a clause in the deed

holding him responsible to clear and settle all such disputes.

Important Documents Ask for the parental document

(also called the moola pathram in many states)

The sale deed must clearly show the details of

the property - door/flat/Plot no., land area etc.

Obtain the No Encumbrance Certificate.

Obtain receipts of all payments made and the receipts

of tax payments made - water, property, corporation,

municipality, electricity, revenue etc. onto the date of purchase.

Confirm the originality of stamp papers. Check to see if the

date of purchase of the stamp paper matches the date of documents.

Now that you have a checklist, what are you waiting for?

Start your property search now with AssistedProperty.com. Just log onto

www.assistedproperty.com and let us help you find your perfect home.

7. CHOOSE THE RIGHT LOCATION

When and where to buy?Location is one of the most important considerations to make when purchasing

your home. Irrespective of whether you are purchasing your home for an

investment or as an end user, the location of your home not only determines the

future value of investment, but it also affects your familys lifestyle. We bring you

a few factors to consider when selecting a location.

Neighbourhood: While selecting the neighbourhood of your future home,it is

imperative to select one that matches your lifestyle and personalitya place

where you will be comfortable and will meet likeminded people.If you are

moving to a completely new locality do your research to get more information

about the locality including present issues, planned developments etc.

Future Infrastructural Developments: Over the past decade, it has been

noticed that infrastructural improvements have had a direct and positive effect

on property prices. This is especially evident in the case of upcoming metros,

airports and highways driving growth in city suburbs across India. It is therefore

prudent to check for planned developments around the locality to ensure you get

the maximum appreciation from your investment.

Social Infrastructure: There is a strong connection between the

socialinfrastructure in a neighbourhood and the emotional and social well-being

of residents. Having good quality educational institutes, malls, health care

facilities,hospitals, libraries in close proximity helps promote social and cultural

well-being and thereby a better lifestyle. An ideal locality should have a

well-balanced social infrastructure.

Basic Civic Amenities: Another important aspect to keep in mind is the basic

civic amenities such as sewage, sanitation, power, water etc. However

attractive a locality or a real estate project is, the lack of these basic amenities

will greatly hinder the development of the area and your individual quality of

life.

Connectivity: Ensure that the locality you are investing in is well connected to

other parts of the city. Ideally it is best to invest in an area that is close to the

metro station, highways, train and bus stations so that you are well linked to

parts of the city.

8. TECHNOLOGY THAT HELPS WITH PROPERTY SEARCH

A) Just a click away from locality info: Online real estate portals today

employ a 360 degree approach to property search. You can get all the

information about each locality in the dedicated locality pages rating each area

based on parameters like sanitation, utility, mobility, public amenities and

environment; all of which are indispensable in determining the overall appeal of

the locality. This data is obtained by exhaustive customer surveys conducted in

the respective city. For e.g., KYN (Know Your Neighbourhood) feature on

IndiaProperty.com gives the users a comprehensive analysis of the location of

their choice, so that they can weigh and compare the information about localities

before investing.

B) Your smart phone is the new property search tool:

In todays day and age, everyone is constantly connected using their smart

phone. Real estate portals give you an option to search for properties on-the-go.

Get your property listings, post requirements and explore the Visual Search

feature powered by augmented reality on India Propertys mobile and tablet app.

This free app ensures ease and access and simpler property search.

9. SEEK EXPERT ASSISTANCEIn conclusion, it is important to do your checks and balances while selecting a

locality to invest in. However with todays busy schedules, sieving through the

market and gathering locality and property information can be a daunting task.

Understanding this challenge, IndiaProperty.com has designed a special service

to guide buyers as they navigate the property markets. Assisted Property is a

unique service that assigns a dedicated property search manager to research,

review and shortlist properties, suited to each individual buyers requirements.

Expert assistance has many benefits Unbiased reviews

Saves valuable time in short listing properties and researching

about localities and builders

Evaluation of properties, making the selection easier

Access to complete property information

Assistance on procuring home loans, sourcing legal opinions and site-visit services

We all dream of owning the perfect home, while some have the means

to purchase one, others dont. And that is where home loans come into

the picture. A home loan could be either taken to buy a new house, to

redo an existing property or to construct a building from scratch.

Establishments like banks or financiers help procure a home loan.

No matter how well aware you are about loan procedures, there are

many points that miss the eye and cause a lot of hiccups in the lengthy

process. For all those who want your loan application process to be a

hassle-free experience here are a few things you should be well aware of.

1. PRE-APPROVED LOANSWhen banks approve an in-principal amount on the basis of your profile

its called a pre-approved loan. A pre-approved loan is usually offered

to those individual/customers who have a clean track record.

Some establishments also go on to offer loans to individuals who havent

taken a loan at all. Repayment of previous loan on time and clearing

credit card transactions within the given date are a few factors that

help zero down tentative customers for the bank. Pre-approved loans

are usually divided into two section -- unsecured and secured.

While unsecured pre-approved loans are of personal loans, the latter

could be used as car and home loans.

Pros: Most of the time pre-approved loans are processed quickly, thereby

saving you from missing out on the opportunity to buy your dream

house soon.

There are a number of discounts offered on the interest rate of a

pre-approved loan. So ensure you cross-verify before availing a loan.

Having a pre-approved loan will help you negotiate with your sellers

as they are aware that your finances are prepared.

Once the pre-approved loan is sanctioned, you can focus on looking

for your perfect property, as pre-approved loans are a better deal

compared to the loan your builder offers.

Cons: Because pre-approved loans are valid for a limited period you will be

forced to hunt for your home at the earliest. If the decision to

purchase a home is taken in haste, there are a number of long-term

impacts that may affect you.

Some banks charge a processing fee to process your pre-approved

loan. Remember, if you miss out on the time span, you might end up

paying the fee twice.

Given the opportunity and the freedom to look for a home based your

maximum eligibility, you tend to go overboard in spite of

your stringent budget.

At times the interest rates are subject to change without prior information.

Check if the loan amount is suitable for you. Most of the times the bank

provides loan based on your credit history, so the sum that is approved

may not be of what your required. So check if the loan amount

is suitable for you.

2. DOCUMENTS REQUIRED You need to submit your bank account statements, your PAN card and tax

return details along with your pay slips to the bank.

Loan documents checklist To make the loan process convenient its important to maintain a perfect

loan file. Here are a few documents that are required for the sanctioning

of your home loan.

The application form along with a photograph that has been signed

across.

You must also provide your identity, age and residence proof. You could

submit any of the following for the same - voters ID card, driving license,

PAN card, a credit card with a photograph or an employee ID card.

You will also need to file your bank statement for the last six months.

Any pass book that shows your salary or income credited

could also be submitted.

Salaried individuals need to submit their last three months salary slips.

Proof of business existence and educational qualification certificate need

to be submitted for the self-employed professionals or businessmen.

Self-employed professionals and businessmen need to submit their last

three years Income Tax returns. And for all those who are in the service

sector, you could submit Form 16.

Six months bank statements or last three years profit and loss and

balance sheet need to be submitted too.

Processing fee cheque should also be submitted.

THE LOAN PROCESS

11

12

Some banks charge a processing fee to process your pre-approved

loan. Remember, if you miss out on the time span, you might end up

paying the fee twice.

Given the opportunity and the freedom to look for a home based your

maximum eligibility, you tend to go overboard in spite of

your stringent budget.

At times the interest rates are subject to change without prior information.

Check if the loan amount is suitable for you. Most of the times the bank

provides loan based on your credit history, so the sum that is approved

may not be of what your required. So check if the loan amount

is suitable for you.

2. DOCUMENTS REQUIRED You need to submit your bank account statements, your PAN card and tax

return details along with your pay slips to the bank.

Loan documents checklist To make the loan process convenient its important to maintain a perfect

loan file. Here are a few documents that are required for the sanctioning

of your home loan.

The application form along with a photograph that has been signed

across.

You must also provide your identity, age and residence proof. You could

submit any of the following for the same - voters ID card, driving license,

PAN card, a credit card with a photograph or an employee ID card.

You will also need to file your bank statement for the last six months.

Any pass book that shows your salary or income credited

could also be submitted.

Salaried individuals need to submit their last three months salary slips.

Proof of business existence and educational qualification certificate need

to be submitted for the self-employed professionals or businessmen.

Self-employed professionals and businessmen need to submit their last

three years Income Tax returns. And for all those who are in the service

sector, you could submit Form 16.

Six months bank statements or last three years profit and loss and

balance sheet need to be submitted too.

Processing fee cheque should also be submitted.

3. PREPAYMENT OF LOANS Prepayment of loan is when the entire loan amount or a part of the loan is paid off by the borrower before the due date. While some banks allow prepayments,

others might charge a penalty fee because prepayment of loans upsets the banks profit calculation from the interest. Below are a few factors why borrowers

should consider prepaying their loans:

Why you should opt to prepay Hang on to your loan if you just have a few years left. It might be a better deal for you to invest that amount somewhere else rather than prepaying our loan.

Your loan benefits decline as the loan period shortens.

Prepayment of lower interest rate loans will not be able to produce the same savings when compared to prepaying for loans at higher interest rates.

And for all those who want to save a few bucks, prepaying your loans might force you to lose a few benefits like mortgage interests which is tax-deductible.

4. EMI EMI - Equated Monthly Instalment is a repayment sum monthly payable to the lending institution. Both interest and principal are a part of the EMI. However, EMIs have

higher interest component than the principal amount. If your EMI is less than 50 percent of your salary, then you might not want to consider prepayment as the interest

rates would fall within 15 months.

Advantages of EMI EMI helps you buy anything and everything.

Salaried individuals can now afford to buy something that is way beyond their reach and pay for goods in an equated sum.

Giving the liberty to pay in equated amounts every month, EMIs are becoming popular with the common

Banks too introduce many schemes and charge minimal amounts for commodities like mobile phones and air conditioners.

Many individuals are unaware of how much the banks are charging them as EMI. EMI calculators help you cross-check the same.

Disadvantages of EMI Until you pay off the principal amount you will be under debt. Some loans such as home loans are extended for 20 years,

so you must be prepared to be under a long-term debt.

Because you are liable to pay off the principal amount first, you might have to stop purchasing other luxury products.

Even if you can afford to clear the principal amount in one stroke, there are certain banks that do offer early payment as the banks might lose out on the interest.

If individuals skip paying EMI, the establishments could take drastic measures like prepossessing your property.

Laying down penalties and legal action could also be taken against the individual.

5. HOME LOAN INSURANCE A plan that covers the borrowers outstanding loan liabilities is termed as a home loan insurance. After the demise of the borrower, these proceeds are used to pay the

remaining loan amount. Usually these covers reduce as the loan amount is paid off. Once you buy a home loan, you will be offered a home loan insurance because

of the tie-up the insurance companies have. You could also opt to buy a home loan insurance cover separately too.

Key pointers If you want to increase your regular outflow of cash, pay the premium instalment on time.

The premium is usually doubled when a joint application is applied.

The insurance company is liable to pay for the losses even after the demise of any one of the joint applicants.

You could pay the premium all in one shot or decide to pay them in regular instalments.

Your age and medical records, the loan amount and the duration of your loan detects your premium.

Under Section 80C, you can get a tax deduction as you are paying a life insurance premium.

If you are paying the premium with your EMI, you will not be able to avail the insurance benefit.

But the amount paid towards the principal could get a deduction under Section 80C and the interest payments under Section 24.

Tax exemptions The tax benefit in terms of interest can only be availed once the construction of the property is completed.

You can avail maximum deduction towards an interest of Rs 2 lakh once your flat is considered to be self-occupied.

For a property that has been let out, your entire interest sum is allowed as deductions against the rent.

For deductions on the principal of your home loan, there is still ambiguity. However, once the property is constructed you could get your tax benefits under Section

80C. But remember, the overall limit is Rs 1.5 lakh per financial year.

If you have availed a home loan from a bank for the first time, up to Rs. 25 lakh between 1 April 2013 and 31 March 2014, you will be entitled to an additional

deduction of interest of Rs 1 lakh. IndiaProperty has a dedicated section for home loans.

A team of experts take your credit history and all these factors into consideration and works out the best interest rates for you.

VAASTU AND FENG SHUI1. GUIDLINES TO ENSURE YOUR PROPERTY IS VAASTU COMPLIANTVaastu is an ancient Indian science of space, architecture and

construction that was primarily used in temple architecture. Today modern

Vaastu Shastra has proven to be an aesthetic way of construction to

propagate a free flow of cosmic energy in your homes. It has gained

immense popularity in the recent past, forcing builders and home owners

to construct a vaastu compliant home due to its increasing demand.

Here are a few pointers to keep in mind to check if your property is

Vaastu compliant.

For a residential site The residential site should be a perfect square or a rectangle. A land cut

in corners is not recommended.

If it is not a square or a rectangle, then the south-west and the south-east

side should be at an angle of 90 degrees from each other.

L shaped, triangular, diamond shaped, oval or round plots are

considered inauspicious.

The south-west and south-east side of the property should be in line with

each other. The south-west portion should not go beyond the south-east

part of the plot.

Similarly an extension on the north-west part of the property is

considered to be ominous.

The only favourable extension is the north-east side. It is believed to

bring wealth and prosperity. Ensure that your site is not short on the

north east direction.

The entrance of the plot can be narrow compared to the rear end, but

the reverse is considered to be unfavourable.

Always begin the construction of the house from the north-east side and

move towards south.

Leave considerable amount of open space in the north-east side. Avoid

planting trees in this direction.

Any elevation on the site should be restricted to the west and south. It

should be definitely avoided in the north and east directions.

Plots situated beside two larger plots should be avoided. It is said to

bring poverty.

It is also important to check if roads run straight at any four sides of the

house. It can however run parallel on any side.

For your home The main door should be in the north-east zone.

The rest of the doors should not be bigger than the main entrance of the

house.

All the doors must open inwards, so that the energy remains in the

house.

The property must not have three doors aligned in one line. This disrupt

Home Buying Guide

Documents

Transcript of Home Buying Guide