5 Precautions To Take When Buying A New House

By Adhil Shetty | April 6, 2018

You should exercise caution and check whether the builder has all the necessary paperwork done before you invest in a project. Read on to know more.

5 Precautions To Take When Buying A New House

Buying a house is a significant event in one’s life as it involves shelling out a huge amount of money. While many manage buying a home through their savings, others depend on a bank loan to fulfil their dreams of possessing a house.

Most of the consumers tend to rely on the builder’s reputation to buy a house. But it’s a wrong approach as perfect paperwork should be the only criterion to buy a new house. You should exercise caution and check whether the builder has all the necessary paperwork done before you invest in a project.

Besides, it is also important to verify the builder’s credibility across various forums. You can check his past or current projects or post queries online to check about a builder.

In this article, we list out certain precautions that you must take before buying a new house.

Title Deed 

It is of utmost importance to check the title deed of the land on which the property or project is based on. This deed will give the consumers or the investors the clarity whether the builder owns the property being sold and he has the right to sell or transfer the ownership. This deed will also tell whether any litigation is on concerning the property. Do take the help of a lawyer to get the title deed examined.

Intimation Of Disapproval 

These are permission or approvals and No Objection Certificates that the builder must obtain from various bodies such as Storm Water and Drain Department, Sewage Departments, Forest Department, Environment Department, Traffic and Coordination Department, among others, at various stages of construction. Along with it, you must insist on seeing the commencement certificate. This certificate allows the builder to start actual construction work legally. Any construction without a commencement certificate is considered illegal, according to experts.

Encumbrance Certificate

You would not like to invest in a property that has any pending litigation or any legal or monetary liabilities. Brokers and builders would like to hide this fact from the actual consumers or investors. But you should exercise due caution and insist on seeing an encumbrance certificate to confirm that the property is free from any legal issues. Investing in a property that has any litigation and other issues is not worth it and can create a lot of problems in the future.

Layout Plans

With real estate scams hitting the market, consumers’ should exercise caution and verify all the documents before investing in a new house. You must verify that important documents like the layout plans have been approved by the concerned authorities as there have been cases of builders deviating from the approved plans and causing problems later. Insist on checking the occupancy certificate as this implies that the developer has built the project as per the approved permissions.

Purchase Agreement

When you have cleared all the above processes, check if everything you were promised has been written down in the purchase agreement. It should have all the details regarding the construction, payment details, apartment specifications, deadlines and penalty if any party defaults. Do remember that it is on the basis of this purchase agreement that you can hold the builder responsible for any misdeeds or variance from the promised infrastructure.

Buying a new house is a big investment decision of your life. By keeping above discussed points in mind, you can ensure that your investment is safe.

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About Adhil Shetty

Adhil Shetty is the Founder and serves as the Chief Executive Officer of BankBazaar.com. Adhil has a Master’s degree in International Relations with a specialization in International Finance and Business from Columbia University in the City of New York, and a Bachelor’s degree in Engineering from the College of Engineering Guindy, Anna University. Adhil is an expert in Personal Finance (Car loan/Home loan and personal loan) and he majorly consults on investment and spends rationalization for the Indian loan borrowers. His guidance is number based with real time interest rate calculations and hence useful for consumer’s real time query.

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