How to Buy Ready to Move Property in India - Documents and Process - YouTube

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Namaskar, My name is Mukul & you are welcome to Asset Yogi

Where we unlock the knowledge of finance rather than locking it

Many of you asked me, How to invest in property

What is the process, what are the documentations, either for a plot or an agricultural land

Under construction property or a ready to move property

So, I have decided to make a full video series on this topic

We will cover all the property in 4-5 videos

So, watch this video

In this video, I am going to talk to you about Ready to move property, the Process of buying it from start to end

What type of documents of the seller you should check?

We will talk about all this in detail

So, watch the full video so that you don't miss any important point

I understand that you may already know the maximum points in this

But still there can be a point you may have missed

So, watch this video till the last, let's move to the blackboard

The buying process of ready to move property is same for apartments & commercial property

For example, I have taken this picture of ready to move apartments

But it is the same for commercial property, here, we are talking about both

How to buy a ready-to-move property, either residential or commercial?

Firstly, we will see a process or overview of this

You should firstly identify, why do you want to buy a property, is it for investment or for self-use?

So, if you want to buy a property for an investment, then I suggest you should see the economic growth in that area

That, how is the infrastructure growing or is there any job growth

That means, are there any industry or company coming or not

So, wherever more jobs come, people will have money to buy a house or a commercial property

You will get more growth in that area

For example, there have been many jobs in the last 10-15 years in Gurgaon, Noida

White field area in Bangalore, Navi Mumbai

In these areas, the economic growth is very fast which is why real estate has appreciated fast

So, if you want to buy a property for investment, then you should see such areas

After you identify your purpose, after you identify an area, you should start property search

You can search property in that area in 2 ways

You can go directly to the online portal to search sellers, who advertise their property on these portals

There are many portals such as, 99 Acres, Makan.com, common floor, India property, Magic bricks, etc.

On which you can directly search online

Or you can search for property with the help of a real estate agent or a broker

When you search for a property, a physical site visit of that property is important

You should see the physical condition of that property that is that property raw or its interiors, is it completely done

Is wardrobe & kitchen done in that, so that you can pay a premium for that

After you identify the property, checking its due diligence, documents & background is very important

I have already talked about this, many times there are frauds in these

Most of the cases are of properties that are going on in the courts

What are things that you should see in this?

Firstly you need to see the clear title, that the owner of the property real owner or not,

title is clear or not

if there any encumbrances or the third party claim

third party claim can be in the form of loan or weather his property is on the lease or not

this types of claim can be lots of property tax dues

unpaid water bills or electricity bills are all types of encumbrances can be claim of third party

you need to make sure that this type of encumbrances should not takes place

In some states, no encumbrance certificates are also available

otherwise, you can check it with the help of an advocate, for ensuring the third party claim

Thirdly the type of ownership of the property

Whether it is freehold property or leasehold or the type of GPA

GPA means general power of attorney

It is a freehold property means it has no rights oof government or any individual

But in leasehold property there is right of a government or private developer until you convert it in freehold

That's why I recommend you to make a choice of freehold property

Otherwise in leasehold property or general power of attorney, you may purchase them but you need to understand their risks

on freehold and leasehold property, I have made a detailed video about merits and there demerits

We will discuss GPA in detail when we talk about document checks.

So after due diligence, we need to understand the process

After due diligence and checking the background of the property you need to price negotiate about its real price and value

You need to give right property value

As a buyer, you are not willing to pay huge price so it is necessary for the right price valuation

Now I have discussed 3 type of methods property price valuation, you can watch them in detail about real valuation

After deciding price value and the agree consent of the seller

Now you need to pay 10% advance on the property value

Generally, 10% advance is given

now this 10% is not a rule but it is a market practice of 10 % as an advance

Once after paying advance you need to do is an agreement for sell, under which all the terms and conditions are written

In which methods of selling, details of property, address, areas, price to pay are mentioned

Then the terms of payment comes in which as a buyer you will get 2 to 3 months for making payment

You can make step by step payment, and also no need to pay lumpsum

Let us say first you make 20% then 30 %, you will get 2 3 months it is negotiable but not a rule,

Generally, it is a market practice of 2 3 months

Then in default penalty when a buyer or a seller back out from the sell, then the penalties are mentioned

When the buyer back out, his advance of 10% will get forfeit

But when seller back out from the transaction he will get 10% more extra from the buyer

10% plus 10% additionally as a penalty, it also a general market practice

There can be a different practice if you want but this one is general market practice

Afterward for making payment you will get 2 to 3 months

After making payment you need to make sale deed

The Sale deed is registered in the sub-registrar office, for this, you need to pay stamp duty and registration fee

This money goes to the government and generally, it is up to 4 to 10% of the property value

on the stamp duty and registration fee and sell deed, I have made a detailed video

After Sale deed that is final ownership document the ownership will transfer to you

The seller will handover all the document to you

All the documents such as society, up to date property tax bills, electricity bills, water bills, complete chain of title

I have mentioned with complete chain of titles you will be handovered

It means, from the time when the property is first sold then till now all the documents must be collected from the seller

After sale deed, collecting all the document and the chain of titles

Finally in official documents you need to change the name , there are types of official documents

Firstly you need to update your name in property tax in municipal corp. in your city

Second, you have to update the name on a share certificate

If you brought a house in C.G.H.S, which is a cooperative group housing society

Society gave you a share certificate, you have to update it and update your electricity bill

This is a complete process to buy a ready to move property

As I sad it is important to do Document checks

I tell you in detail about it, what types of documents should check before purchasing

First to check ownership document

Ownership document mainly is of two types

1. Sale deed- how the previous owner acquire that property

Owner has a sale-deed, in which transfer of ownership should be checked, seller is a genuine owner or not

2. conveyance-deed- In many states if you directly buy property from a development authority

In that case, then you have a conveyance deed. I already made a video on conveyance-deed so watch that video.

You should check conveyance-deed if the seller ownership come from that

Gift Deed- if someone's relative gifts a property then ownership is transferred by this deed

Ownership can be transferred by a Will also. let's say your mother or father transferred an ownership

To you then you can claim an ownership by will

Many property is sold by General Power of Attorney

As I said earlier general power of attorney had a risk.

Let me tell you that, GPA generally used to sell property in an unauthorized colony

The unauthorized colony which are not

Approved by the government, established on agricultural land by private players

That slowly will be authorized, which is a political issue also.

As you see back in the news it was a big issue in Delhi

There is a risk in the unauthorized colony, as

Back when the supreme court bans transactions in an unauthorized colony, bans GPA transaction

This type of ban can be imposed

You should know this GPA is a risk associated property, although GPA property sales a lot in the market

But it is my duty to inform you about these types of risk

By chance, if you purchase a GPA property it is important to know about the seller is a genuine seller or not

Many time some people sell a property which on an of gram panchayat or common land

You have to cover that risks also

Once when you confirm the ownership documents, after that you have to confirm the exact area of the property

Many times people say the area is 1500sqft. when you check it in papers it comes out 1200sqft.

For that, you should ask for a layout plan, what the exact area or see a property tax document for the exact area

Next, you should check the chain of title, as I told you earlier the chain of title is

All sale documents from the first sale to sale up to the today dates, you must have to collect this

And also have to check it

If any document in between is missing, it generates a red flag for you, maybe some fraud there

That may be deposited as security somewhere for some loan on that property

That's why it is important to collect all documents related sale of the property

Next, the No Encumbrance Certificate, which is available in some states, I earlier discussed.

Generally, you can extract it from 12 up to 30 years, should be taken out for at least 12 years if is available

In this, you get documents related to transfer, how it is transferred

So, the chain of tiles is also reflected in no encumbrance certificate

With that, it also reflects if it has any mortgage or lease

One thing to note here is encumbrance certificate does not ensure that there is no other encumbrance

Or third party claim on a property, it informs about registered claims only

A Registered claim which is in any public record, let's say, any mortgage, lease deed which is registered, you get it

in encumbrance certificate

If it is a lease of 11 months which is not reflected in it because it is not mandatory to register it

By encumbrance certificate, you make sure due diligence of a certain level but it, not a 100% surety

We take these steps to become 100% sure

To buy a genuine property.

Assume if the current owner has take a loan on a property from a bank, then you

Should ask for NOC by a bank and a list of documents from the owner.

Mortgage document, when bank deliver loan

Mortgages a property and deposits original documents including sale deed

Sale deed, layout plan, or any other receipt if deposited in a bank, it gave all list of documents.

You should ask for that list also

You make sure that all taxes and bills like property tax, electricity, water, gas,

Or society maintenance dues are up to date

If it is not up to date, then before the final sale deed, it should be clear by the current owner

After that, you should ask for some documents related to society & RWA

One is a share certificate, assume if you purchase a house in a cooperative group housing society

It has a share certificate, you should check that it is in the name of the current owner

No dues from society, you asked the owner to clear all dues to the society

Otherwise, society will not let you enter you as an owner because dues are not clear, and then you have to pay those dues

you make sure the current seller pay all their dues

You should ask for the completion certificate of that society

Or occupancy certificate, possession certificate

These certificates are generally delivered by the municipality when construction is complete

A possession certificate is given by the development authority when they hand over possession

You should ask for these certificates from current the seller

Lastly, if you think this can not be done by yourself then you can seek help from professionals like broker, advocates

I tried to cover all major points in this video

If any point is missing, or you want to add something in that

or you have any suggestions related to this video and channel

then, please comment below

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