Building your dream home!

By | May 12, 2014

Buying a piece of land and building their first home is the biggest dream harboured by many Indians. So, when Prabhat told his mother that he was buying a plot of land, she was proud of him, something she did not show when he invested in the flat.

Buying a plot of land has become a very tricky affair, especially when considering the blatant corruption surrounding the deals including creating fake documents, demand for half payment in cash and also issues of disputed land sales. So, if you are ready to buy a piece of land to build your first home, it is advisable to be very cautious and thorough.

Also, the steps and procedures are quite different from purchasing a flat and hence require a careful analysis before setting out on the path.


Buying Land

Plots are scarce in big cities, though you can still get a good piece of land in smaller towns or even the peripheries of the cities. If you are planning a loan, then a land loan can be availed that are offered by banks for the purchase of residential plots. Some banks have a clause that requires the buyer to start construction within six months of land purchase. So, it would be advisable to plan your future course beforehand. You may procure a personal loan, but that might be a little more expensive.

Watch Out For…

In India, the real estate sector often pilfers with the law governing it. Therefore, it is advisable for land buyers to check for the following factors thoroughly and even get them examined by a legal expert before making the actual purchase:

  • The Deed Title: Check if the deed title is in the name of the seller and he has the full right to sell it. Insist upon looking at the original and not just a photocopy.
  • Encumbrance Certificate: This document can be procured from the sub-registrar’s office where the deed is registered. It declares that the land is free of any legal hassle and unpaid dues.
  • Property Tax Receipts and Bills: Ask for the originals again and ensure all the payments have been made as this could lead to legal complications and more expenditure in the future.

Apart from these, you must also check that the loans on the land are repaid with a release certificate issued by the bank and get the property valued for the exact land measure.


To purchase a piece of land, the following documents are required from the seller’s end:

  • Original Land Deed of the current owner, known as the 7/12 document and also the previous owners with the proper names on the title
  • An Encumbrance Certificate from the Sub-registrar’s office for the last 30 years at least
  • Release Certificate from the bank, stating that the loan on the land has been completely repaid
  • Original property tax receipt and other bills relating to the plot

For the buyer, the documents required include:

  • The Title Deed after it has been transferred to the buyer’s name written by a Government licensed Document writer
  • Receipt from payment of stamp duty charges

Now, you can get your land registered in the sub-registrar’s office or have your name added in the village office records, as may be the case.


House Plan Approval

The State Municipality Act requires that a prior sanction be obtained by a person who wants to undertake construction activity for building a new house or modifying an existing one. The process has been made automated in most states and isn’t time consuming. Your contractor, engineer or architect needs to take care of this. The architect needs to submit the Building Plan along with a prescribed fee for getting the building plan approval done.

Factors for Construction Cost

The construction cost involved in the project includes:

  • Architect/ contractor’s fees
  • Building material costs
  • Labour cost
  • Interior fittings such as light fixtures, bathroom fittings, tiles, etc.

These will be the actual costs involved; however, the cost escalators will be the choices you make such as the construction plan itself, the material be required for building your house will vary according to your plan, the material quality and so on. Sometimes, it is better to pay extra at the time of building and save maintenance and repair expenses later.

Smart Ideas For Saving

Outstripping your budget plan is inevitable while constructing your own home and there are very rare unheard of cases where this hasn’t happened. You can apply the following tricks to cut corners though:

  • Keep your construction plan simple and don’t make too many changes once the construction work commences.
  • Get materials and fittings with long term savings in sight.
  • Pick the materials when prices are low even if you require them at a later stage.

Finally, get what you need and not what you want. Cost cutting is very important from your end as there will be many unforeseeable expenses that will crop up. Sticking to the original construction plan as much as possible is the best way to finish the project early or on time.Apply for home loan online today

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