Having an upper hand on the property transaction might be a cause of worry in future if not accomplished in a careful manner. Otherwise, buying a home without the help of a loan and solely based on one’s own funds, accelerates the deal closure within 10 to 14 days from the usual 45 to 60 days when using a home loan for your purchase. As the seller or builder in this case, does not have to wait for funds, this advantage of his must be utilized by you to get a discount on your buy.
What is the Buyer’s Risk in Not Using a Home Loan?
Availing a home loan requires legal verification to get it sanctioned and the process is thus, carried out by the loan provider that assures a safe transaction of your property. But this procedure goes ignored when the buyer is paying the entire amount from his own pocket.
Usually, the legal verification related to property purchase take a week’s time so do wait instead of closing the deal in haste. You must manage to obtain the property’s Title Certificate from a proficient property lawyer. Besides, you also need to collect the various important documents for avoiding any loss in future, such as:
Non Occupancy Certificate
No Due Certificate
Copy of Non Occupancy Certificate in case of a mortgaged property
Electric Bill copy
Receipt of property tax payment
Encumbrance Certificate
List of original documents between you and the seller
What to Follow when Not Using Loan to Buy Your Home?
Sale Agreement
Don’t commit the mistake of executing a Sale Deed without first signing a Sale Agreement where the terms and conditions of your property purchase must be listed. Remember to include in the clauses of the agreement that the deal closure is conditional upon obtaining the Title Certificate from the lawyer.
Title Certificate
Use all of the documents mentioned in the list above such as NOC, Encumbrance Certificate and their copies to acquire Title Certificate from a lawyer following the verification of these documents.
Indemnity / Legal Bond
The execution of this bond in the court by the seller is another option to protect your interest with the following conditions:
The property you purchase has been devoid of any mortgage or loan against it previously, and is free from encumbrance.
No circumstance should allow the seller’s legal heirs to claim on the property.
Assured legal and financial security by the buyer to the seller in case of future claims on the property.
Sale Deed
Only when you have undergone all these steps, should you execute the Sale Deed during which, the payment of balance amount can be made to the seller.
Other Important Tips to Avoid any Regrets Regarding Your Home Purchase, in future.
Avail of TDS
As a buyer purchasing property without a home loan, you have the right to get a tax deduction of 1 and 20 percent if the seller is a resident and a non-resident Indian, respectively.
No Dealing in Cash
If you don’t wish to put your hard earned funds at stake then you must pay the seller only through a DD or a Banker’s Cheque.
Purchase of Under-Construction Property
Don’t get lured by the attractive discounts offered by the seller for a property in its pre-launch stage since the non-availability of the project approval can result in a higher risk for your capital.
Besides, you must add a strict clause of compensation by the seller on the occasion of delaying the delivery when purchasing property under the 90:10/80:20 scheme of the seller and need to shell out 90 percent of the upfront payment from your own sources.
Property with Previous Home Loan
Make sure to retain 10 percent of the entire payment till you receive all the original documents from the seller’s home loan provider and the NOC is issued. This is to be done if any loan was taken against the property that you are buying.
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