Thursday, August 7, 2008

How do you go about buying property in Bangalore?

{This post is aimed at Newbies in the field of property purchasing in Bangalore. I'm documenting this, so that others don't have to re-invent the wheel. This post will be continuously updated, as necessary.}

First question is whether you want the plot in Bangalore North, South, East or West. Obviously there is no correct or wrong answer for this question - it depends on where you're currently living, because the site will need weekly-monthly visits to watch out for encroachments, and looking after (removing grass, weeds, garbage etc.) once you purchase it. Also, at the budget of Rs. 1000/- per sft, lot of property is available inside a 18-25 km radius from Vidhana Soudha, so you have quite a lot of choice.

Next, check out with your bank on loan eligibility amount (if this is a constraint). This is a major limitation on many people's purchasing ability.

Next, you need to decide which reputed developer to go with in the area you have selected. There is plenty of property available at great locations, but owned by greedy-unscrupulous developers. Moreover at first glance everyone appears honest and transparent. You need to be very careful to only invest money after thoroughly checking the developer's antecedents through friends. You can search for negative feedback on on-line forums, though. You need to keep in mind that your relationship with the developer is only beginning when you buy the site. He will need to maintain your layout and site, and provide the promised civic amenities such as park, club house, swimming pool, compound wall, tarred roads (of promised width) etc. which could easily take 2 years or more from the date you purchase, as all that will only be done when people start building houses in that layout and an association of residents is formed.

Also, dealing with developers directly usually means the demand for part-payment in black money (hard cash, no receipt). One possible way out is to only buy re-sale sites from people who have already bought it from a developer. Some of them would be willing to settle for an all-white deal, which is necessary if you want maximum bank loan.

An interesting phenomenon you may come across, is that resale plots are often available for lesser price than the developer's quoted rate. This is because these people would have bought the property during launch period when the rates were lower, or through negotiation.

Third, please read up as much as possible on the following terms: Gramthana site, revenue site, DC conversion, AC conversion, Gram Panchayath, BMRDA, BIAPPA, BBMP, BDA approval and differences between them, BDA NOC (two types), Survey Number (of the land you have identified), Plan Sanction, Registration, Khata, Tax Paid Certificate, Encumbrance Certificate, Betterment Charges, BBMP Master Plan 2015 (specifically Green Belt, Green Zone, Yellow Zone, Blue Zone etc. and clauses related to land zoning), BDA Acquisition notification, BMRDA acquisition notification, SEZ notification, de-notification (many more terms could be added to this list). Unless you know the true meaning and limitations of these terms very well, you are liable to be cheated by unscrupulous elements in the market. You could check out various blogs, forums, official government websites for this info, or better still, contact your family lawyer.

Next, shortlist a few properties from reputed developers based on the 3 L's of real estate: Location, Location, Location! Some broad parameters of shortlisting could be Bangalore N.E.W.S, plot is East Facing, North Facing, South or West Facing (not preferred by many buyers), nearby development, possibility of development in next 2-4 years, the other investors in the project (these could be your neighbours in the future).

Next, study the market and identify the relative merits-demerits of the various properties you have shortlisted. Some parameters are ease-availability of local transport, hospital, temple, good schools, drinking water supply and drainage from BWSSB, Water table depth (so you don't have to drill a very deep bore well), groceries, lifestyle locations, nature of neighbourhood (posh, upper middle class, middle class, lower), slums nearby, near railway track, too close to religious institution, parks, approach road condition, etc. Please make sure that apart from searching the net, you speak to dependable locals in the area for this information.

Then do final shortlisting.

Then take your mom,dad,wife,husband and show them the 3-5 properties you have finally shortlisted, and answer their numerous questions about the property. Please don't be surprised if they consider many points which had been earlier ignored, at this stage. Get them to rank the properties in order of their preference.

Based on all this, rank the property in your order of preference.

Then bargain with developers in order of preference, on money, check-cash split (black-white), payment duration, etc.

Then get the documents from the developer and have them legally verified by your lawyer - not developers or bank lawyer.

Then take a few days of peaceful meditation on the decision, till you are satisfied that you have done everything possible from your end.

Finally settle the financials, register the plot, build compound wall, and sit on your nest egg.

Other experts, please feel free to modify, add, delete to above if required


raman said...

Very Useful Article. Keep updating.
It's a real social service !!!


Kevin Peterson said...

Thank you for the fantastic service provided and helping me find a niche home at an affordable price. Your project was just what I was looking for; appreciate your sales team for providing hassle free service.
Properties in Bangalore