Basic due diligence everyone can do before making an offer to buy an apartment

So at this stage you have finalized the apartment you wish to buy. Met with the seller and have a verbal understanding of the negotiated price. As explained in previous post you have collected some information from the seller which will help you in this due diligence.

So first step is from information collected in the "sale deed of apartment", you can do a basic title search of the same. You can also find if there was any other registration done after that sale deed was executed, to make sure you are dealing with the latest sale deed only. You can also get an idea on at what rates the deals are done for other apartments in that plot.

https://esearchigr.maharashtra.gov.in/testingesearch/Login.aspx is a site where you can do this simple search. Just register to the site and there you can enter the details from the date of sale deed to current date and the area of the building and also enter SurveyNo./CTSNo./MilkatNo./GatNo./PlotNo. obtained from the sale deed to do this search.

The list can span across multiple pages and you need some patience to glance through all the pages to get this information. You should be able to find the following:
1. Listing of your sale deed. The registration number should match the number listed on the site. Clicking on the link (index II) for the sale deed, the name(s) should match the seller name(s). The same link should also give you an idea as at what value was the deed executed.
2. As you scan through pages, you should not see any other registration for the same apartment listed. If one is listed then there was a sale made after that too which seller has not made you aware off. This is a red flag.
3. Further as you move towards current year you can click on other links to see as at what consideration were other apartments in the same area negotiated at. This can give you an idea of your negotiated price and see if it is not too high from recent market value.
5. Further note that the listing will show all kinds of registrations done on that plot. Each listing will clearly mention what kind of document was registered. You should look at "deed of apartment" types of documents. If you work on the site for some time, you would get a hang of what you need to look at.

So after you are satisfied w.r.t. the "sale deed of apartment", and the name of sellers match the owners of that apartment and each owner has a valid PAN, Aadhaar next step would be to see if the said apartment is properly registered with CIDCO.

Note that in Navi Mumbai almost all land is owned by CIDCO and everyone is allotted the land and apartments constructed in buildings on them on lease as per the conditions of the lease agreement. So when someone sells an apartment they essentially transfer the same conditions upon you. Hence every sale needs to be notified to CIDCO and transfer charges are to be paid to it.

So property tax receipt is a good document to verify if all is in order. Property tax for the apartment in question is issued by NMMC meaning NMMC is assessing that property which inturn means that OC (occupancy certificate) has been received on the same. Also on the receipt the name of lessee is mentioned meaning who is registered under CIDCO as rightful lessee of that apartment. Now this should again match the name of sellers.

So all this should give you some confidence into entering into transaction with the sellers and also give you some idea on the negotiated price.

Now there is more to the final price you end up paying on top of the negotiated price. This is usually 10% higher than the negotiated price.
This 10% includes various duties and charges and various fees payable to broker, lawyers, agents, bank (if loan is taken).

So before making a final offer, keep this in mind. What makes up that 10% I will post next soon.

Keep tuned ...

Very first steps towards buying your dream house

Today the scenario is that there is a huge supply of houses in Mumbai region but not much demand. However funny thing is that prices are still not falling. Biggest single factor that prevents a deal to be sealed is the price. You can find your dream house in the location or building of your choice, its is the price that may keep you away from making a deal.

Now I don't have much help to offer on price part, I think it all depends upon your negotiation skills and how desperate the seller is in disposing off the property. I however has few factors to keep in mind before making an offer with token money.

Apart from the price another very big part in buying an apartment is the "seller". A real estate transaction takes around 3 months to complete and all that time you need cooperation of the seller. Of course if a broker is involved he would help you with the necessary documentations and contacts but he would also need seller to cooperate. So first question is is this the seller you can deal with? Can he/she be your friend for next three months. Now it all depends upon how good you are judging people but just in case you find something not right with the seller's attitude, it is better to walk away from the deal.

Lot of times many things are agreed upon mutual understanding like when would seller actually give you the physical possession, what all items would be left behind by him/her. There have been cases when seller have actually sold a furnished apartment, but before possession left with all the furniture. So if someone wants to cheat he will cheat, what you can do at best is deal with people you are comfortable, someone with whom your frequency matches.

So lets say you are OK with the seller and you have somewhat agreed upon on the price too. To initiate a deal you would have to give some token amount. It can be few thousands rupees to say 1 - 5% of the total price. Now if there is some problem with the deal, you can get the token back, but by exercising some caution you can minimize the risk. Here are this first set of documents (or copies of them) you can ask seller to just show them to you before giving the token. If seller is genuine I am sure he won't have any objection.

1. The registered sale deed in the sellers name.
This is the most important document, specifying that property is registered in their names. If this is not there, be very cautious in dealing, I would suggest don't take the deal further. From this document, just note
   a) the sellers names
   b) the serial number of the document
   c) the plot number on which the building exist.

2. The copies of PAN/Aadhaar of the sellers. This will just verify that people mentioned in the deed exist. If there are multiple sellers then ask them for some MOU that all sellers have agreed to sell the apartment. There can be cases due to some internal dispute all may not have agreed to sell. Better to get some idea of this right at start.

3. The latest property tax for the apartment paid to NMMC.
In Navi Mumbai all the houses constructed are governed by laws NMMC and CIDCO. This is one such document that will help you relate the sellers with the two authorities.

So what to do with the information you just collected. Stay tuned and I will post this soon.

Steps towards buying a property in Navi Mumbai

For past year or so I had been looking for a suitable apartment in Navi Mumbai for self residential use purpose. Very recently I finalized one and this entire process of executing the transfer from seller to buyer is now taking place. I hope all goes well and I get a clear and marketable title upon possession. This is my very first real estate transaction and unlike financial market transactions these are very cumbersome. There were many steps and technicalities that I learned in due process and I wish to enumerate all at one place for potential benefits of others.
As I was my self researching on the internet on various aspects of a real estate transaction particularly in navi mumbai, I could not one "know all do all" site, hence I felt a need to create this page. So without further adieu lets jump into what all it takes to buy a property in Navi Mumbai (apart from truck load of money). ;-)

First lets consider that you are buying a resale property and after lot of search you have identified one. Note when looking for an apartment, apart from your personal preferences, two things you should keep in mind
1. Reputation of builder who executed that project
2. Has a housing society/condominium been formed and registered or not. This usually happens when builder conveys the said plot in the name of the society members. A formed society does take care of lot of hassles, which I will try to illustrate later.

So a typical transaction happens in three steps (and entire process may take anywhere from a month to three months).
1. Is usually an understanding phase between buyer and seller where seller can handover copies of apartment documents and buyer typically pays a small token money signalling is interest and having an assurance that seller won't again try to sell the same to anyone else. This is just an understanding phase based on trust.

2. Agreement to sale. Here buyer executes and registers an agreement to sell. This is a legal phase. Here buyer pays balance money (ie total sale consideration minus the amount he has taken a loan for). Seller here hands over all the relevant original property documents to buyer (or the bank making the loan). This happens usually 30 - 45 days after agreement to token money phase.

3. Sale deed. This is again a registered document where buyer with sellers help transfers the flat into his name (CIDCO and society transfer), bank gets all the needed NOCs to make the disbursement of loan. Seller now transfers the physical possession of the apartment to buyer and now buyer becomes new owner. This again usually happens 30 - 60 days after agreement to sale.

So in next several posts I would be explaining as what buyer should do before executing each steps and also some insights in costs and processes involved. I would also try to list some pitfalls to avoid.
I may also do some write up in case you are buying directly from builder. Since I am buying from an owner I don't have that a great depth insight into that kind of transactions, but basics are same and should give you all a fair idea.

Keeping you posted ....

Sachin