Buying a property is quite long-winded and cumbersome work in India. Normally its a big fuss to buy a property due to complex legal processes and absence of very Estate Regulator. Besides this there is no centralize database of house units in India and due to corruption big no of projects are in legal embroil. Though majority of property transactions are through Home Loan but considerable no of place transactions are executed without Home Loan. In my post on How to buy House with Home Loan i discussed steps relevant to property purchase by availing Home Loan. In this post, we will discuss how to buy property without Home Loan i.e. entire payment is being made by the buyer from own sources of fund .
Upper hand of Buyer
When a buyer is buying a property without Home Loan, Buyer has upper hand in the transaction. Reason being, transaction can be completed very fast and seller will get funds without much delay and harass. The lead clock for seller in Home Loan fund transaction is approx 45 – 60 days whereas without Home Loan, transaction can be completed within 10-14 days time. Buyer should take advantage of this situation and may demand dismiss on quote price .
Normally builders / sellers are willing to offer discount of upto 10 % and in few cases upto 20 % if buyer is pooling money from own sources. typical exemplar is revised 80:20 / 90:10 outline of builders. It is besides referred as Down-Payment design. If a buyer is will to pay 80 % -90 % funds upfront then builder is will to offer deduction of upto 10 % -15 % on property. Reason being, builder will get bum funds. If he borrow from grocery store, he will pay pastime of upto 24 %. second builder is hedging his risk as he is recovering entire cost which is approx 70 % of quote price and booking 10 % profit upfront. He can afford to offer 10 % deduction and balance 10 % can be recovered at the time of self-control .
In casing of resale, seller prefer buyers who can pay upfront in single installment without going into harass of Home Loan. It is always advisable for buyer not to disclose his cards on negotiation table. Best way to negotiate is to finalize the price and then ask for 10 % -15 % discount for upfront payment i.e. to close place transaction without Home Loan.
Title of Property
property transaction without Home Loan is high gear Risk Transaction. Reason being, when buyer avail Home Loan the legal verification is done by Home Loan supplier before Home Loan is sanctioned. In case buyer is paying from own sources then this imp pace is skipped. Therefore it is absolutely necessity for buyer to obtain “ Title Certificate ” from local competent property lawyer. besides it is more safe to buy property on which Home Loan was availed in past. Normally lawyer complete legal confirmation within workweek ’ second prison term therefore buyer should not be in a haste to close the property transaction. second, Buyer may ask for all crucial documents like List of original documents with Seller, Encumbrance Certificate, NOC & No Due Certificate from society, latest Khata Certificate, Property Tax Receipt, Copy of Electricity Bill, Copy of NOC from bank if property was mortgaged in past etc .
Steps to Buy Property without Home Loan
You may follow following steps to buy property without Home Loan
Step 1: Sign Sale Agreement
many buyers make a error of immediately executing Sale Deed. It is crucial to sign a Sale Agreement and list down terms and conditions of property transaction. Token measure, max equivalent to 10 % of transaction respect can be paid to the seller. Time-line for closure of transaction can be 14-21 days meter which include 7 days buffer. The sale agreement can be Notarized. The seller should keep all the documents ( as listed in former section of this mail ) ready for legal confirmation at the time of execution of sale agreement to save time. One of the elf clause in sale agreement should be that blockage of transaction is discipline to open “ Title Certificate ” from lawyer .
Step 2: Title Certificate
Buyer may take photocopy of all the master documents and other elf documents like EC, Property tax receipts etc immediately after signing sale agreement. He can get it verified from local anesthetic place lawyer and obtain Title Certificate
Step 3: Legal / Surety / Indemnity Bond in Court
One more pace which can safeguard the pastime of buyer is to execute Legal / Indemnity Bond in court by the seller. samara clauses of this legal / surety / indemnity bond can be
( a ) place is complimentary from all encumbrances and seller has not mortgaged it privately or taken any loanword against the place
( boron ) Legal heir of seller will not have any claim on property under any circumstances
( speed of light ) last but not the least, seller should financially and legally indemnify buyer from any future claims on the property
Step 4: Sale Deed
After following above mentioned steps, Sale Deed can be executed and buyer can pay balance sum to the seller at the time of execution of sale act .
Word of Caution
In any place transaction with or without Home Loan, stallion hazard associated rests with the buyer. It is important/critical to follow all legal steps and take caution of following points
1. Home Loan of a Seller: If you are buying a property which is presently on Home Loan then it is advisable to hold 10 % requital till Home Loan Provider of seller acquittance & hand over all the original documents to buyer and issue NOC. Reason being, Home Loan is closed on date of sale deed and deposit will take 2-3 weeks to release all original documents and issue NOC. A article related to this can be included in sale deed .
2. Under construction property from Builder: If you are paying 80 % -90 % total upfront from your pocket and buying a property from builder under 80:20 / 90:10 system then Risk of delay is high therefore insist on categoric rigorous compensation article in case of delay. second, it is not advisable to buy place during Pre-Launch time period when stick out approvals are not in position though discounts offered are high. You will be risking your capital .
3. Payment through Cheque / DD: Payment to builder / seller should only be through DD or Bankers Cheque. I never suggest or recommend any CASH deal in property transaction. You will be risking your money .
4. TDS: last but not the least, if you are buying a place from own sources of fund then don ’ thymine forget to deduct 1 % TDS if seller is nonmigratory indian or 20 % TDS if seller is NRI .
Each property transaction is different and above mentioned guidelines are general in nature. One shoe doesn ’ thymine fit all therefore thorough home plate work and inquiry is required before a buyer sign below dot line. furthermore its your hard earned money and you will not mind a delay of few days or spending few thousand rupees more to buy peace of mind .
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