The land is a scarce commodity nowadays and people will to buy it. There is a sense of pride associated with the purchase of a plot. And why not? You can begin construction as per your choice. You design your home and give it the look and feel you have always dreamt of. Thus, buying a plot is a dream for many. However, before you approach an NBFC for a Land Purchase Loan, here are some points that you need to keep in mind before you buy a land or plot in India:
- Ownership of property: The first question when you decide to buy a plot is whether the builder possesses the legal rights to sell the land? It is essential for you to know about the current owner of the land. Is it the builder who is the owner or is he in partnership with the previous owner through joint agreement? You do not want to get caught with these ownership troubles as they are pretty stressful and time consuming. Moreover, you will lose a lot of money during the legal battle. Thus, do not be a victim of the fraud.
- Builder’s affiliation: The bank loans are availed by builders for the construction of plot and residences. If you find that a builder is affiliated with a bank, then it is a good sign as it showcases that he is serious about the construction and completion of the project. This will further help as the builder is not completely reliant on the advance money provided by the buyers as he already has the support of the bank.
- NA order: In India, all the land area is agricultural by default, unless mentioned otherwise. Thus, it is essential that the plot you are buying falls in the non-agricultural area, viz. commonly known as NA in terms of real estate. It is also important to know that the NA status differs, thus, one cannot directly start with the construction as it is sub-divided into commercial, resort, IT, warehouses, etc.
- FSI for the plot: The concept of Floor Space Index is applicable in construction. One cannot afford to neglect this. FSI determines how much construction you can carry out on a piece of land. For instance, if you have a plot of 1000 sq. ft. then with 100% FSI. You can build a house of 1000 sq. ft. However, this differs a lot. Know that exceeding the FSI will lead to the violation and would be deemed as an illegal construction.
- Builders’ credibility: You can get hold of this by understanding about the other projects undertaken by the builder. You should ask your agent and other locality members about the same. See what are the qualities of the previous projects? Was he involved in any legal hassle? These are few basic questions that need to be answered.
- Verify the sale deed: You often hear about “agreement to sale’’. This happens when you book your flat and get done away with the initial payments to purchase the plot. During this period, you pay stamp duty and registration charges. Remember that agreement to sale does not make you a valid buyer. It is important to get the sale deed done. Get the plot registered in your name, without which you will never be the rightful owner of the property.
These are the basic points that you need to take care of before you buy any plot. It is essential to follow the above points before you opt for a Home Loan. And make sure you fulfill these needs to avoid legal hassles.