Land purchase procedure in Bangalore

   Recently purchased a small site in Bangalore and the procedure was not that easy. It really needs lot of time and effort from you if you don't have any prior experience. There are people who will delay or miss lead you during the process especially if you are going for a loan. I will explain the events and steps that are involved from identifying a property  until getting it registered in your name.

   I have purchased a BDA property from the first owner. I applied for the housing loan from SBI for site + construction. The steps are as below, ensure that you are not busy in office and have some time to take off if needed during the process. In the entire process, you will have to do lot of running around to get things done.

1. Once you found the property suitable for you, negotiate the price and pay a token advance.

2. Get all the documents from the seller (Might be a 3rd person known as broker):  All previous title deeds, khatha, khatha extract, tax paid reciepts and latest EC.

3. Consult a lawyer and ensure that the title is clear

4. Get into an agreement with the seller mentioning how much you are paying in advance and how much on the date of registration. Ensure that the price that you are registering for is above the BDA fixed rate at that area. (Lawyers/Mediators have that information) . The stamp-paper value needs to be 0.1 or 1% of registration value if going for loan (check with the bank)

5. If you are not going for a loan, skip to step 22.

6. Get an application loan application form an apply for the loan. The maximum loan eligibility may vary from bank to bank and time to time. Usually you will get 80% of the property value or 50% your monthly income whichever is lower. For eg, if your income per month is 50k you can get loan upto 25lakhs, this usually varies based on your repaying capacity and repayment period.

7. Bank needs copies of all the above documents mentioned in step 2 and the sale agreement mentioned in step 4.

8. Additional documents like your employment offer letter, last 2 months pay slip, 2 years tax returns, 6 months bank statements, address proof, id proof and 2 photos are also required. They might insist for a gaurntor, in which case you need to get all these from him as well. Seller's id, bank account, address proof is also needed.

 9. Have to pay processing fee in form of cheque as needed to the bank

10. Once you apply for the loan, bank starts processing it and the procedure involves legal opinion, valuation, document processing, loan approval, documentation and disposal.

11. The bank process can take from couple of weeks to more than a month depending upon some unforeseen situations. Ensure that in step 4, in the agreement, you borrow enough time from the seller. It is a good idea to mention the date of registration as 2 months after the date of agreement.

12. The bank has it's own lawyer and valuator. It might instruct you to go to them or send the docs to them directly. In my case, I had to go myself and it can again take couple of days.

13. The lawyer might ask for originals of all the docs which are with the seller. So, you might have to take the seller to the lawyer's place. Lawyer verifies everything and does a verification in sub-registrar office. This is to ensure that the latest EC mentions that the property is still with the seller. After this he gives a detailed report mentioning the documents he verified and gives a go/nogo to the bank.

14. Property Evaluator  needs to visit the place and he takes few photos and estimates the price of the property. This will dictate how much loan you will get. He will also give a report which you need to submit at the bank

15. Bank will also send few verifiers to your residence, office and the site and you will have to answer all questions.

16. All the reports reaches to the bank and they start processing, it is possible that the process might be in a different branch, Ensure that you keep following up be calling them or visiting them frequently. It might not move otherwise.

17. Once the loan is approved, you will need to visit to the bank for documentation with all documents that you have. (If SBI, it is RACPC in st Marks road). You will have to take the EC again till date since there might be one month delay from the date of registration. This is required by the bank to ensure that the property is still with the seller.

18. The total cost for registration as of nov-2010, includes 6.72% stamp duty + 1% registration charge, The bank loan amount can include this. So total cost will be x + 7.72 * x/100. The bank might give 80% of this. The rest you will have to pay at the bank.

19. If you don't have an savings account in bank, it is better you open the account in advance and credit rest of the amount in that (20% of total cost).

20. During the documentation, you will have to sign around 70 places and it is a half day process.

21. You will need to clearly mention the  3 DD amounts in  a letter which the bank gives on that day. One for the seller, one for 6.72% to the stamp duty and 1% for the registration, both addressed to the sub-registrar, 'your registration office'. The registration offices are different based on your land address . Total stamp duty should be 6.72%, so for the agreement in step 4, if you have paid 0.1 or 1% that can be deducted and the DD can be for 6.62% or 5.72% accordingly.

22. Create a sale deed with the help of lawyer. He might need the DD number mentioned in the seller's DD.

23. On the date registration, seller, you, and the bank authority(in case of loan) should go the the registrar office. The bank will give the DD directly to the seller (or you, if no loan)  and collect all the original documents from him. The other 2 DD will be submitted at the registrar office.

24. At the registrar office, photos will be taken of both the parties and it will appear in the sale deed. The sale deed mentioned in 22 needs to be produced and back side of first few papers will be printed with registration details. You need to take the copies of that immediately since the original needs to be submitted to the bank immediately(in case of loan)

25. All the documents will go the bank and they will give an acknowledgment letter. You need to get a letter from bank stating they have all originals and they dont have any objections in you getting khatha transfered to your name.

 Now the land is in your name :). Next step would be to get the ec, khatha etc transfered to your name so that you can start construction related work. Will have to do house planing , plan approval and again apply for  loan for construction!  I am yet to do this and think it will be good enough material for another blog!

Hope this helps some one who is looking to purchase a site, Best of luck!

Thanks,
Murali