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Update Date : 31-Dec-2022

Created Date : 31-Dec-2022

Category : Home Loan E-Book (Promotional_New)

If you are planning to buy a house, here’s how the process should flow

Buying a house always sparks a mixed feelings of excitement and anxiety.

After all, it’s a place where you and your family will reside.

Hence, finding a good property that is free from all legal impediments, meets all of your family’s requirements and most importantly, affordable become a priority.

You may also be investing all of your life savings into it and paying loan EMIs for many years to come.

Hence, it’s natural to feel anxious and have a strong desire to put your best foot forward and make this investment work as much as possible.

That being said, to help you make your home buying experience more seamless and secured, here’s the flow we recommend by which you can execute the transaction more effectively and more securely.

1. Get your home loan pre-approved – As it is rightly said, the best time to make a home loan application is when you make a decision of buying a house.

Getting your loan pre-approved rules out any possibility of losing your time and money in case, your home loan application for any reason is turned down or delayed.

Also, when the calculations are sorted, you can easily figure out which of the shortlisted properties is the best fit for you.

Hence, if you are planning to buy a house on loan then getting your loan pre-approved should become the starting point of the transaction.

2. Performing property search – By now, you would have got a fair idea about how much money your bank is willing to lend you on a given property and how much margin money you are required to arrange.

So accordingly, you start looking out for the property and shortlist the one that fits your budget and meet all your requirements.

3. Payment of token money – Once you identify the property and get through the negotiation stage, you can then proceed to pay a small token amount to the seller as an expression of interest in exchange for copies of all property related documents.

4. Performing due diligence on the property – Once all of the property related documents are obtained, you must then get them verified by performing due diligence on the property.

Performing a pre-search & pre-valuation on the property confirms that the property you are buying has a clear title and is being fairly valued.

5. Preparing a draft agreement – Once all of the essential checks are completed to your satisfaction, you can then proceed to prepare the draft agreement and pay the remaining portion of your margin money to the seller.

Be very sensitive while drafting the agreement as a minor error if goes unnoticed can hinder your loan disbursement.

Errors like an incorrect or misspelled name or missing out on any of the critical details will then have to be corrected by executing another agreement known as a “Deed of rectification”.

Hence, it’s in the best interest of both parties to get the draft checked thoroughly before getting the same registered.

6. Property registration and loan disbursement – Once the draft is validated and approved, both parties can then get the agreement for sale registered.

The buyer retains the original document while a copy of the same is required to be submitted to the bank for processing the loan disbursement.

7. Executing a sale deed and handing over of possession – Once the loan is disbursed and the seller receives the entire payment as agreed upon, he/she will then have to relinquish all of his/her ownership rights from the property in favour of the buyer by executing a final agreement called as “Sale deed”.

Once, the sale deed is executed, the buyer becomes the new and absolute owner of the property and becomes entitled to occupy it.

A sale deed is the final document of the sale transaction that replaces the agreement for sale.

While the buyer retains the original document, it is advisable that the seller also retains a copy of it for future reference and taxation purpose