What Could Derail Your Home Purchase Plans?

There is a typical pattern that is followed while carrying out property transactions. However, every property is unique in some way. Similarly, every transaction has unique features. This uniqueness of the transaction might also give birth to certain complexities that might temporarily wobble your property-buying plans. Let us discuss what kind of unique issues you might face while buying a property and how could you act accordingly to let any complexities not derail your plans that is made up with so much emotional drive and enthusiasm.

Time is of essence

Time plays an all-important role in property deals. That is why all experts speak of giving it a good time and due diligence before you finalise a deal. Typically, if a seller is in great hurry, you might look at it as red flag. However, there could be cases where the circumstances do not permit the seller to spend too much time in carrying out the transaction. If the seller, say, is an NRI, they would understandably be in great hurry to finish the task and leave to their current country of residence. If the seller, say, is an elderly couple needing urgent money owing to some health-related emergency, they would also press for a quick deal. The same would be true if a middle-aged couple is trying to sell their property to fund the wedding of their children. If the urgency shown by the seller is not just an eyewash, and if you do wish to purchase this property since you like it quite a lot, you must be ready with some arrangement that would speed up the deal. This is one reason why many buyers get a pre-approved loan. Being in touch with a lawyer and a chartered accountant could also speed up the process in case time is money.

Money does matter

In a typical process, the buyer initially pays 10 per cent of the property sale as earnest deposit after which an agreement to sale is created.  Before the property is registered, the buyer must pay the entire amount. However, some sellers might ask you to pay a token amount as soon as a verbal agreement is reached. This amount could be a couple of lakhs of less. While experts tell you refrain from paying any money till an agreement to sell is created, sometimes you risk losing the property if certain personal whims of the seller are not met. If such a situation presents itself while you are at the receiving end, you may consider meeting the sellers demand. However, it must not be done without creating an agreement to sell ─ a contract could be created at this juncture, too. Under no circumstances, however, should you pay the money in case. Do note here that the government has banned use of over Rs 20,000 cash in property transactions. Holding cash of over Rs 2 lakh is also banned.

Also be mindful of the fact that several big and small expenses would emerge out of nowhere while your purchase is underway. So this purpose, you need to keep some money aside. In case you are buying a property for Rs 30 lakh, rest assured you would end up spending Rs 35 lakh at least (we are factoring in here only stamp duty, registration charges, loan –processing fee, etc., and not renovations).

This is the sort of mathematics involved in the process, make purchase plans according to your savings.