Investing in a property or land is a lifetime decision as it requires a hefty investment amount, financial preparedness, and also comes with certain risks. Thus, for first-time buyers, it is always advisable to make a final call to buy land only after due consultation with financial experts, family members, and taking into consideration all your expenses, income, and long-term financial goals.
Moreover, plot deals often involve various complexities such as ownership disputes, fake documents, and instances of corruption. However, these complications should not dissuade you from investing in your dream plot or land at your preferred location. In this article, we will discuss five crucial things that you should not ignore before buying a plot/land in India.
5 Key things that you should never ignore while buying land in India
1. Background Verification
Before buying any piece of land, it is essential to check if the land is free of legal disputes. Conduct a detailed background check to get a confirmed legal status of the land and obtain a release certificate from all owners (in case there is more than one) to save yourself a lot of heartburn and headaches later.
2. Identity Verification of Seller
Check if the person(s) selling you the plot/land has the legitimate right to do so. Ensure they possess all the required legal documentation confirming this. Verify all documents before taking the final call.
3. Get a Copy of the Title
Whenever a real estate agent or landowner lists a property for sale, the initial step is to obtain a copy of the land title. Locate the Register of Deeds using this copy to ensure the land is free of encumbrances such as mortgages, claims, or other issues. Verify that the copy matches exactly with the records at the Register of Deeds to confirm it is lawful and problem-free.
Also Read: Documents required for a Loan Against Property
4. Sign a Deed of Sale
If the land is problem-free, proceed to execute a Deed of Sale or “Contract of Sale.” Both the seller and buyer need to sign the contract, and it must be notarized. Buyers are advised to make the payment for documentary stamps within one month from the notarization of the Deed of Sale.
5. Transfer Fees and Title Transfer
Once you have the Certificate of Authority to Register, take it to the Register of Deeds and pay the Transfer Fees. Ensure the title transfer is completed smoothly.
Additional Considerations
Test the Water in the Soil
Do not forget to test the water in the soil to determine if it can properly support a foundation. You can hire a licensed civil engineer to carry out this test to ensure that the land is suitable for building your home. Soil engineers can also be hired to perform soil testing.
Know Your Floor Area Ratio (FAR)
The Floor Area Ratio (FAR) tells you how much space you can use to build out of the total area of the plot. Understanding FAR is crucial for planning your construction effectively.
Suggested Read:
- What are the Tax benefits on Loan Against Property
- 3Ps of Loan Against Property
- What are Fees and charges on Loan against property
Bottom Line:
If, as a borrower, you want to fund your land purchase via a loan, you can apply for a land loan at your existing bank. However, do not forget to review certain clauses wherein banks usually ask buyers to start construction within six months of buying the plot. For first-time buyers, it is advisable to understand all the terms and conditions stipulated by your bank beforehand.
To navigate through the land-buying process, you can also contact OneNDF, the leading online loan marketplace in India.
