In the second quarter of 2022, land rates in Delhi-NCR have seen a 20% year-on-year rise. Whether you wish to buy a fresh plot in this region or elsewhere in India, the best tip is to get a plot loan. No matter how high the cost of the chosen plot is, the loan can help finance it. If you apply at a reputed bank in India, you can borrow up to Rs 1,00,00,000 to buy a vacant plot for the construction of a residential property or a resale plot. The loan can even help you buy a plot in most-desired areas like talukas with easy access to markets, schools, and hospitals. However, learn how much you need to save for the down payment, registration charges, and stamp duty of the chosen plot.
But before getting a loan, you must keep a few things in mind to buy a plot of land. Here are the top 5 tips to follow.
1. Establish the Seller’s Identity
Check and verify the seller’s identity before applying for a plot loan. Check the seller’s nationality and residence certificate. See whether the permission of the authorities is needed to sell the land. In case the seller is a company, see whether it is allowed to own and sell a property.
2. Learn About the Documentation
The following documents are usually needed for land purchase and should be checked carefully:
- Title Deed: If the deed is questionable or suspicious, consult a property lawyer. Make sure that the seller has original documents. Be doubly sure that they are duly registered and stamped at the sub-registrar’s office.
- NA Order: Every land in this country is, by default, considered agricultural land. So, if you buy a plot for residential purposes, you must get the NA-Residential order.
- Encumbrance Certificate: It helps verify that the plot doesn’t have any legal dues. So, procure this certificate to ensure no litigation or pending dues on the land.
- Release Certificate: If you buy a resale plot, there’s a possibility that it was pledged to get a loan against commercial property or residential property. Once it is paid off, the lender gives a release certificate to confirm that no dues are left. Get a copy of it before going ahead with the purchase.
- Property Tax Receipts: It’s important to check the property tax receipts for the last few months. This helps confirm that the property has no outstanding tax payments.
- FSI of the Plot: It is the ratio of the covered areas that can be constructed on the land to its total area.
3. Procure Construction Approvals
This is another crucial thing to do before getting a plot loan. See whether the municipal body has approved the building and layout plan. Check government approvals for amenities like electricity, water, parks, and sewage treatment before proceeding with the purchase.
4. Learn About the Maintenance Charges
After being handed the plot, you need to pay an amount annually for the maintenance of the amenities. Learn about the annual maintenance charges in advance to save an unpleasant surprise. Instead of trusting the salespeople blindly, better visit the plot to check everything in person.
5. Check the Location’s Connectivity
Before purchasing a plot, check the current and proposed options of connectivity. Functional connectivity with essential means of transport like buses and metros can improve the living conditions and the future resale price of the property.
Make sure to do enough proper research and opt for a plot that is projected to offer good returns in the long run. Then you can either resell it or use it as a security to apply for a loan against residential and commercial properties.