Category: How to-Guide

Buying Land or Plot in India? – Here is a 10 point checklist which you should know before purchasing any property in India

Posted on by Jagoinvestor

Are you looking for buying a plot or a piece of land? If not today, maybe you have this dream of owning a plot sometime in the future.

Buying land or plot has in a way to become a premium thing these days especially in big cities because the land is scarce commodity and the pride is associated with having your own plot where you can build the house as per your wish.

In this article I will tell you 10 important things that you should know before purchasing any property in India.

buying land or plot

If you happen to visit any real estate exhibition, you will come across many plots projects along with the residential apartment schemes. These plots are generally within 20-100 km of the city radius and often marketed as a second home or vacation home.

On top of it, the pricing is attractive (often within 5-20 lacs) and there is also the facility of installments which makes it too easy to own a plot. The deal is often paying a token amount and pay the rest amount in parts (EMI).

However, a common man is often not aware of the risks associated with buying land and the complexities involved in it. Buying a land is a very different kind of ballgame altogether compared to buying a flat (which is much safer), and today I am attempting to make things easy for you to understand.

My Personal Experience

I have personally visited a few plot schemes myself over the last few years (near Pune). I have interacted with the salespeople and have some experience in this area. Hence, I will try to share what I know with you. If you can also add to my points, I would love to incorporate it into the article.

This article will mainly help a newbie with the simple checklists which they should look at before buying a plot or when they go to visit a scheme or if they are interacting with the salesperson (here is a checklist for buying apartments).

Note that this article is mainly keeping in mind plot schemes or gated communities, but most of the things will also apply for a standalone piece of land.

1. Is the land on the name of the builder?

The first question you should ask the salesperson is that if the builder has legal rights to sell the land or not. Find out who is the current owner of the land? Is it a builder himself or not?

A lot of builders either buy the entire land from the previous owner or enter into a joint agreement with the owners to sell or develop the land and sell the plot scheme. No matter what, make sure that this part is clear. Ask for the documents which clearly show the builder has legal rights on the plot himself.

Here is a story on how small builders do frauds

2. Has the developer taken a loan from Bank for the project?

Builders often take a bank loan for the Plot schemes and even residential schemes. It’s a sign that the builder is more serious about the project and it’s also a positive sign, because if there is the money with builder which will be specifically used for the project development.

The builder is not dependent fully on the advance money the home buyers. It shows that there is a cash flow dedicated to the project and the issue of cash crunch will be minimized.

It’s not always the case the scheme has a bank loan, but still enquire about it. If bank loan is there, it’s proof that the bank has done thorough verification from their side on the legalities and only then granted a big amount (often in crores)

3. Where is the NA order?

By default, all the land in India is ” AGRICULTURE LAND”, unless it’s defined for some other purpose by the govt. So a piece of land is either agricultural or non-agricultural (commonly called as NA in real estate industry)

Agricultural land can be used for Agri purpose, whereas if you want to do any other thing other than agriculture then one has to first convert that Agri land to non-agricultural (NA)

However just because a land has got NA status, does not mean that one can start using it for residential purpose, because there are various types of NA like

  • NA – Commercial
  • NA – Warehouses
  • NA – Resort
  • NA – IT
  • NA – Residential (this is the one where one can build a residential house)

So if a plot of land is type NA – Resort, that means that that one can build a resort there, but can’t make a residential scheme. If a plot is NA – warehouse, then one can build a warehouse there for commercial purposes, but can’t make residential schemes and sell to the common man.

So you need to look for “NA – Residential” Plot

So, the point is that you need to ask the builder/salesperson, if the plot of land you are planning to buy is “NA-Residential” or not? Ask them for a copy of that. A lot of other kinds of NA plots are sold as “NA plot, collector approved” which is a misleading thing.

I am attaching a sample NA order below (from Maharashtra) for you too just get a feel of how it looks like

na order sample copy

Another thing you have to be very cautious is “Proposed NA” schemes. A lot of builders try to sell a non-NA land telling you that its a proposed NA land, means he has initiated the process of converting a land into NA scheme, and the papers are already in process and “very soon”, the land will become NA-residential and how you will then reap the benefits of the high prices.

While there are chances that the conversion happens, but in most of the cases, its a gimmick to sell a cheap land at high prices and often buyers are stuck in the project, because the land is nothing more than a piece of crap later.

Don’t fall for it, because converting an Agricultural land to NA-residential is a very lengthy process in which a lot of approvals needs to be taken for it. There are cases where it’s been 10-15 yrs and it’s “still in process”

I suggest you read the following experience to understand more about this point.

Proposed NA plots

So, ask the salesperson to show you the NA order papers. Have a look at it yourself and do not fall for the promises like its coming in 2 months or next week or anything like that. Don’t get stuck into those kinds of deals.

Understand one thing very clearly, NA plots with clear title are limited and scarce, & often you will have to pay good price for it, If the land price is dirt cheap and it’s promised as NA-residential, there is a good chance that it’s fake or very very far away from the city limits.

4. What is the FSI for the plot?

Suppose you bought a plot of size 2000 sqft for building the house on it.

How much construction can you do?

Here comes the concept of the FSI or Floor space index. FSI simply means how much construction can be done on a piece of land and it depends on the location of the plot.

FSI of 100% means if you have a plot of size 2000 sqft, you can build a house of 2000 sqft on that. If the FSI is 75 %, then you can only build 1500 sqft of house on that 2000 sqft land.

The project I recently came across:

I recently came across a project called Royal Purandar near Pune when I went to visit a plot exhibition. The lady at the counter told me that the plot sizes start from 5000 sqft and go up to 40,000 sqft (which is very big). I was shocked to hear about so big plot sizes because 5,000 and 10,000 sqft plots are quite big.

However, when I asked her what is the FSI of the plot, she told me it was just 15%. So with FSI of 15 %, if you buy a plot of 5000 sqft size, you can just build 750 sqft of house, which is generally a small bungalow.

There is nothing wrong with that, but you should be at least aware of it.

Why FSI is very very important?

So understand that FSI has a very important role to play when you will construct something or even when you will sell the plot to someone else. Imagine 2 plots which are of the same size (2000 sqft), but with different FSI like 50% and 100%

  • Plot A (50% FSI) – You can make just 1000 sqft home on that, which will be like a 2 BHK)
  • Plot B (100% FSI) – You can make a 2000 sqft home, which will be like a 4-5 bedroom Bungalow.

But then it might happen that Plot A is selling at 10 lacs and Plot B is selling at 15 lacs, and you might say – “Plot A is cheaper because its less priced and the size is same (2000 sqft)

One important thing you should know is that FSI for agricultural land is very small generally. In Maharashtra, it’s just 4 %, which means even if you buy a 10,000 sqft Agri plot, you can only do the construction of 400 sqft on that land.

You should definitely ask the builder/salesperson to share the document which mentions the FSI on it. Judge the price of land only after learning about FSI, not just the area.

5. What are the other projects done by the builder?

You should ask the salesperson about the other projects done by the builder. Check if they have done other similar projects in the past? What was the response to it? What is the quality of those projects? Were there any legal issues with those schemes? Are the buyers happy with the builder work there?

You can often get some clue about all this on the internet or the online forums. Just go to the website of the builder and find out what are the other schemes he has done. Search with the other project names and see what others are talking about?

If you get a chance, I suggest paying a visit to past projects once. Spending half a day in this will only help you further to take the decision.

6. When will the Sale Deed happen?

You will often hear about the “agreement to sell” which is executed when you book the flat/plot and clear your initial payments (around 35-40%). This is the time when you pay stamp duty and registration charges. Once the agreement to sale is completed, a lot of buyers think that the flat/plot is registered on their name and now they are legally safe.

However, this is a myth and the “agreement to sell” does not make you a valid buyer. The agreement to the sale (often called ATS) is just the AGREEMENT TO SALE, which means it’s an agreement between buyer and seller on the initial points and terms under which the sale will happen in the future.

It mentions the terms and conditions of the deal, how much initial payments are you making along with cheque number and also the future dates, by when you will clear the payments, etc.

What is the “Sale Deed” document?

“Sale Deed” is the document that needs to be registered in the office of sub-registrar in order to make the sale happen. Unless the sale deed is done, you do not become a legal owner.

Hence, ask the builder or salesperson about the sale deed? When is it going to happen? The sale deed is generally done, only when the builder gets all the dues from your end.

7. Will I get an individual 7/12 extract in my name?

Let me first help you understand what is “7/12 extract”? It’s a term which you will often hear in states like Maharashtra and Gujarat. In Karnataka its called 7/12 Uttara. It’s the document maintained by the revenue department which mentions how the land moved from one owner to another owner in the last 30 yrs.

So in a way, its a history of the land and you will find exactly on which date who sold to whom. This way you will find out who is the current owner of the land also.

For example:

If person A sells the land to person B, then it’s important that the name is 7/12 extract is changed from A-> B. Unless B name is not registered in the 7/12 extract, B will not be a valid landowner.

So it’s important to ask the seller about the 7/12 extract. There are many complications around this, like if you buy an agricultural plot from the seller in the name of “NA plot”, then your name will not be there in the 7/12 extract, because there are restrictions on who can buy the Agri land and even the minimum size restriction is there.

Also at times, the builder will tell you that the name of the builder will be there in the 7/12 extract, and not yours. Or the society name will be there in the 7/12 extract and not yours.

Also at times, what happens is that a big piece of plot is broken down into small land areas and sold to many people and a joint 7/12 is made, where all the buyer’s name is there in 7/12 extract (see the conversation below), which makes things very complex in future.

7 12 extract buying land

So make sure you enquire on this aspect properly, and if an individual 7/12 extract will be done or not.

8. What will be the per annum maintenance after buying the plot?

Once you buy the plot, there is annual maintenance that needs to be paid which goes towards maintaining the basic amenities like security, upkeep of the project, gardens, water, security etc. It should not be a surprise for you later. This maintenance is generally paid on a yearly basis and it’s proportional to the plot size. For example, if it’s Rs 4 per sqft and your plot size is 2000 sqft, then your maintenance per year would be Rs 8000.

9. Is the plot on flat land or on a slope?

Don’t assume that your plot is always going to be a piece of flat land. If it’s a big project, it might happen that the overall land which builder has acquired is uneven or has slopes. So when it’s divided into several small plots, many plots might be on the slope or it might be uneven.

You will ask what are the main issues when we build a house on land with slope or an uneven plot?

Below are some important points regarding the land on the slope from this website

If the plot is on a significant slope, either the land will need to be cut and filled, or you’ll need to build a house that takes that slope into account. It’s worth remembering that while these things might make your house more spectacular, they’re also likely to cost a fair bit more.

Depending on the angle of the slope and what’s built on neighboring properties, a slope can also reduce your exposure to sunlight – which in turn can affect how much light you get in living areas, and your potential to harness the sun both for passive solar heating and for collecting solar power.

Where we live in the southern hemisphere a north-facing slope is ideal for solar access – a steep south-facing slope not so much.

Below is how the project brochure looks like when its shown to you (often when the project has not yet launched or into the exhibitions)

project layout for plot

By seeing this kind of image layout, you never get an idea if a particular plot is on slope or not. So it’s always a good idea to ask this question and verify it by visiting the site yourself.

10. What are the arrangements for water and other basic amenities?

Always ask how they are going to provide water and other basic amenities. Is it going to come from the municipality or the gram panchayat? Or they are doing their own arrangement for it?

And also ask some other questions like :

  1. What about electricity?
  2. Are they going to arrange for a individual electricity meter?
  3. How much are they charging for it?
  4. If the plot/land is too much away from the main road, then what about the access road?
  5. Who will develop it?
  6. What about fencing of plots?
  7. What about security?
  8. Ask everything in detail and in points.

With this, I think we have completed the main high level 10 things you should ask when you are buying a plot. Below is another video on this topic where some industry-level people are talking about the same issue of buying land and the complexities involved.

I strongly suggest watching the 15 min long video below


Now we will see some important points which you should keep in mind before you buy the plot.

Important tips for someone buying a land

  • Do not hurry. Period! – Buying land is an emotional decision and often salespeople use a lot of tactics for selling the plots (just like flats). Don’t believe the seller when they say that just 12 plots are remaining or the prices are increasing next quarter when they do their “Mega – Launch” . It never happens.
  • Make many visits to the plot – Don’t book the plot just after one meeting or without visiting the plot yourself. I would say that one should make at least 3-4 visits before the deal. Try to visit the plot once when your salesperson is not on the site. Just make a surprise visit and ask others on the site about important points and you might find some new information about the plot which was not told to you
  • Check the nearby development yourself – Don’t believe the salesperson about the nearby development information. If the salesperson says that a new flyover is coming up nearby or if there are 3 colleges within a 2 km radius, just find it out yourself.
  • Talk to people nearby the plot – If you can go a bit further, see if you can talk to people who live nearby the plot. Make a random visit and then ask the shopkeepers nearby, houses nearby on the points which concern you.
  • Bargaining for the price – Often the list price quoted for the plot is never the final price. In a country like India, it’s a well-known fact that there is always bargaining. So you can easily assume a 5-10% margin. Ask them to reduce up to 10% price and then settle for at least 5%. Take a lot of time to decide and often you will see the prices coming down. It’s very important that you do not show your desperation on buying and also share with them some names of nearby projects and how you also like them and you need a strong reason to buy a plot from them
  • Search online about the plot scheme or the area of land – Always search for information about the project or builder online. You will often come across others who have visited the site, or interested in the same project, you can connect with them and discuss it

I hope this article has given a good knowledge to you about the important things you should ask and keep in mind before you buy a plot into some scheme.

Beware of small unknown builders for plot projects

By now I think there is no need to tell that land buying is very complicated and one should not attempt it if you do not have the risk appetite for it.

There are many small flies by night people who know how mad people can get to own a plot of land and they come up with schemes where their sole intention is to make money for themselves and cheat customers. Please see this below video where some buyers are sharing their real-life experience of buying a plot and getting cheated.

I would strongly recommend that you involve a good property lawyer for verification of documents and the legality of the project. It would increase your cost a bit, but then it becomes a more secure investment.

Please note that all the points I have mentioned above, are based on my knowledge and understanding. If there is any correction to be done, please share that with us. Also please share your comments and views in the comments section below.

EPF withdrawal made super easy – No Employer signature needed

Posted on by Jagoinvestor

Here is a great news for all EPF account holders. EPFO has come up with new and revised forms using which EPF withdrawal process is now super easy and can happen without employer signature or any involvement. Now you can directly submit the EPF withdrawal forms and the settlement will happen directly into your bank account.

Earlier, the EPF forms were first sent to employer for their verification and signatures, which used to take a lot of time and many a times employers used to harass employees because they had the power to block the EPF withdrawal. However with these new changes, withdrawing from your EPF account is going to be very easy and fast and now it makes a lot sense, because EPF should not be linked to employer anyways. Few months back, with the concept of UAN, the EPFO had anyways delinked the EPFO from the employer to some extent, and this move looks like an extension to that.

new epf withdrawal process

New Forms – 19 UAN, l0-C UAN and 31 UAN

EPFO has issued 3 new forms which will be used for as follows

  • Form 19 UAN – You can fill this form to withdraw from your EPF at the time of retirement or leaving the job. Taking our money from the EPF is allowed only if you are unemployed for 2 months. So in case you just change a job and join a new company within 60 days, you can not offically withdraw from EPF, You need to apply for EPF transfer in that case
  • Form 10-C UAN – You can fill up this form in order to withdraw from your EPS amount. EPS account is a seperate account linked to your EPF which is for the purpose of pension. Note that one is allowed to withdraw from EPS only if your EPF is not more than 10 yrs old.Check more details on this here.
  • Form 31 – UAN – This form can be submitted if you want to partially withdraw from Employee providend fund (EPF) account for the purpose like marriage, house buying or medical emergency. There are different rules for different situations. You can check more details on this in this article

Note that there exist forms 19, 10C and 31 already (without the word UAN), but now the new forms end with the word “UAN” to differentiate between old and new forms.

Who can fill up & use these new EPF forms?

Here is the catch!. The new EPF forms can be used by only those employees who fulfil following two conditions

  • UAN must be active and should be linked with aadhaar number
  • Your KYC details (especially bank account number) must be verified by employer using digital signature

If the above two points are true for you, only then you can use these new EPF withdrawal forms

new epf withdrawal forms

Step by Step process of withdrawing money from EPF account

Let me help you with the steps of EPF withdrawal now. For the sake of explanation, we will consider the case of Form 19 UAN, which is used to withdraw the EPF money once you leave the job or are retired. The same process is used for the other forms as well.

Step 1 – Make sure your UAN is active and KYC details are verified

These new forms can be used only by those whose UAN is active and all the KYC details are verified by employee as explained above.
Hence, the first step is to verify your eligibility. For that, you can go to http://uanmembers.epfoservices.in/ and login with your login and password and then go to Profile->Update KYC Information, where you can either update the details or check them. It looks something like the below example (thanks to my close friend who has passed his details to me for creating this snapshot)

check uan status

In case, you have more than two UAN allotted to you, then you should discard one of them and should be using the latest one provided to you by the current employer.

Step 2 – Fill up the EPF Withdrawal form and send along with cancelled cheque

Once you have verified that all the details are fine. You can then fill up the form. Below you can see form 19 UAN as an example. One has to provide the Mobile number, UAN number, date of leaving, the reason for leaving the service (make sure you choose it properly, because TDS will be applied depending on that reason),PAN & full postal address.

Note that apart from this form, you also have to attach the cancelled cheque of the bank account which is mentioned in the UAN KYC details.

EPF Form 19 UAN for withdrawal
Step 3 – Send the form to the EPF jurisdiction office

Finally, the last step is to submit this form, along with the cancelled cheque to the EPF office which comes under your jurisdiction. The simple way to find the exact address of the regional EPF Office is to go to http://search.epfoservices.org:81/locate_office/office_location.php and enter your state and district of the office where you work/worked. You will get the full address. You can then courier the documents to that address.

epf jurisdiction

The above 3 steps will help you to withdraw from EPF money easily. If you want to withdraw your complete EPF amount, then you need to fill up form 19 UAN and form 10-C and send both of them.

BONUS – Fill up form 31 UAN to withdraw from EPF for purpose of buying house

Let me also share one very important thing related to buying house or repayment of house loan through EPF amount. Form 31 UAN can be filled for partial withdrawal for the purpose like buying house, repaying home loan or things like medical emergency or marriage at home. For more on this, please look at this article.

You can see the snapshot of form 31 UAN below. If you look at 4th and 5th point, you can clearly see that you can take the money directly in the name of the “agency”, which can be the builder or the company which is helping in construction of house. The cheque can be taken for that.
form 31 UAN

EPF Withdrawal process to be online very soon

I hope you are now clear about these EPF withdrawal forms and how to fill them up. Note that very soon these facilities will become online, it’s just a matter of time. Once that happens, the process will be much smoother and fast, because things will become online.

Let me know if you have any doubts or any questions on this topic. Do you think these forms will help in EPF withdrawal a bit faster?

8 essential checklist for buying property by a real life architect

Posted on by Jagoinvestor

Today, a real-life architect is going to share with you some of the most essential things investors should check before buying property in India. Do you want to know what are the topmost things to look into the property before you take that big decision of booking the property?

Do you want to know what are some of the tricks builders employ and how they make decisions? Mr. Abhijeet Patki, a practicing architect, who is also a consultant to a reputed architecture firm in Mumbai has agreed to share his knowledge with all of us.

Mr. Abhijeet is one of the readers of this blog just like you and when I asked him to write an article about this area, he agreed instantly.

Mr. Patki has an experience of more than 11 years in the field of architecture and interior design and has worked on different kind of projects that includes IT Parks, Commercial Buildings, Residential Projects, Heritage Building, and many commercial interiors projects. So I hand over to Mr. Patki to share his wisdom and knowledge with you all.

Checklist before buying property in India

8 important checklist points before buying property

Detailed descriptions of this checklist are done at a later stage.

[su_table responsive=”yes” alternate=”no”]

Checklist #1

Project site or Land

 Checklist #2

Approvals from statutory bodies
Checklist #3

Flat Layout

 Checklist #4

The view outside your flat
Checklist #5

Specifications

 Checklist #6

Luxurious and Affordable homes
Checklist #7

Fire Safety (In tall buildings)

 Checklist #8

Big versus Small Developers

[/su_table]

At some point in time in our life, everyone feels of owning a house. It may be for their own stay or as an investment. Depending on the stage of one’s life, buying a home is associated either with ambition or necessity or influence through various parameters.

It is taken for granted that it is THE ultimate investment to secure one’s future. Surprisingly, despite not having a regulatory body, an investment in real estate is assumed by many as a safe bet – safer than Equities, maybe because most of them are fortunate enough to not have faced any issues with their properties. However, the risk factor in this investment is equally grave like any other modes.

Without proper diligence, your dream investment certainly comes with a potential risk that can have lifelong repercussions on your livelihood. By no means I intend to say that all buyers are ignorant about the property survey before finalizing it; it is just that their analysis about their ‘to be’ property is limited to generic factors.

Usually, any Indian buyer looks broadly into the following parameters while selecting a property. Interestingly, a buyer buying property for his stay would look into the aspects in an order as mentioned below, while an investor will reverse the order except point #2 which will be on top of the list.

  1. Location & convenience factor.
  2. Rate of the property in comparison to the market trends in the vicinity.
  3. Surrounding neighborhood.
  4. Amenities offered by the builder.
  5. Building aesthetics.
  6. Expected rate of appreciation in the future.

What about Flat Layout?

You may be curious to know as to how I could not include an important factor – ‘Flat layout’.

Indeed, it is one of the most important factors while buying the house, but the price of the property generally takes precedence above the layout. Here the typical Indian mentality comes into mind – “Our budget is Rs. X Lakhs & we shall buy the best (bargained) property within our limits”.

Thus, in order to stay within their planned budget, many people let go of a flat that has a good carpet area or a better layout.

While it is a debatable topic about increasing a budget for a better property or buying a suitable property within a planned budget, all that I want to say is that in most cases, the price of the property governs the selection of the flat and not the layout.

8 factors every investor should check before buying a property

Anyways, moving ahead, I am going to make you aware of some very important factors that should be considered while buying the flat which is usually overlooked or is unfamiliar to the common man.

1. Project site or Land

The very first check that one needs to do is about the land on which the project is planned. The land should be a Non Agricultural land (often called NA) and should be registered with the local municipal body.

Each property comes with a ‘Property Card’ which mentions the details of the current owner of land and its status. Apart from the type of land, one should check in the city ‘Development’ Plan whether the land is earmarked for any reservations such as – playground, police station, public welfare amenities, religious structures, slum rehabilitation, etc.

For any city development plan, you will generally get it from the website of the municipal corporation. For example, in the case of Pune, you can get it from here.

Below you can see a snapshot of how it looks like

Pune development plan

No residential development can be allowed on lands that have reservations other than that for residential projects.

If the land had reservations & the developer claims that land usability has been changed with local authority permitting the same, then please ask for the proof for ‘Change in Land Use’ from the local body & State ministry of Urban Department, supported by valid approvals / NOCs covered in subsequent point.

Further, inquire if the land is a freehold land or leased one. If it is a leased land see the contractual documents relative to lease – lease tenure, usability, other conditions etc.

2. Approvals from statutory bodies

If there is any parameter that is of utmost importance while choosing a property, then it is this. Your property has no value if it has not got required approvals from the local authorities (municipal corporation or likewise).

Sellers advertise in a most generic manner in one line “All approvals in place” as they are aware that nobody will go deep into the investigation of the approvals.

I am located in Mumbai and I can tell you that any project that is planned to be executed in Mumbai requires more than 100 permissions / NOCs from various bodies and during different stages of the construction. This document gives you a good idea for these permissions and NOC required in various states

Ask for approvals form builder

As indicated earlier, the list of approvals / NOCs is not exhaustive and varies from cities to cities. It is recommended to investigate the status of the approvals with the builder, see the original documents before you make any monetary transaction. Yes, it is a bit complex to understand the approval process, inquire about the permissions, etc.

However, one can always appoint or seek advice from a local municipal leasing consultant at a nominal cost to carry out an assessment for you. It is a small price that you pay to safeguard your big investment and you can rest assured about the legal intricacies.

Many investors/buyers fall for the lucrative offers during ‘Pre Launch’ of the project. The attractive prices make the buyers hasty in buying the property. However, buyers should be aware that the Pre-Launch offers are marketing gimmicks and generally approvals are in the process during this stage, thus posing a risk to your investment.

3. Flat Layout

This is another important aspect to think about before you finalize the property. This becomes a family’s habitat for years to come. Regardless to say, the flat should provide you comfort, joy and a sense of complete satisfaction.

Taking all members of family in confidence, it should become a unanimous choice and one cannot leave a chance to regret the choice at a later date.

Important points one should remember

a) Your Life Style – First and the foremost thing you need to evaluate is whether your current lifestyle or routine would remain as it is or get better OR you would have to compromise on certain aspects.

If you anticipate a well-informed compromise & are still ready to buy it, then you may take that in your stride for a few days or even months. But deep inside, you would start regretting that compromise as the years go by and as you get used to it.

We buy a property for our betterment but if that is not happening then it becomes a liability. This point is more important for ladies in families because, in India, houses are run by our mothers and wives. If they are not happy, no member of the family can be.

b) Do not fall for the saleable area figures – Saleable area includes the common areas of the buildings in addition to the carpet area of the flat. Generally, the saleable area is additionally 35% to 60% over the carpet area.

For example: If you are planning to buy a flat with a carpet area of 700 sq ft, then the saleable area is generally between 1000 – 1300 sq.ft. which includes the common areas like – lift lobbies, terraces, clubhouses etc which is proportionately divided among all flat owners.

The cost of the flat is generally projected in a saleable area which is actually wrong. Carpet area should be of primary importance to you as you are going to use this area for your habitat, hence try to do dealings on carpet areas instead of saleable areas.

c) Carpet area is important – Check the room sizes and the carpet area of the flat you are choosing. A carpet area is a usable area measured from wall to wall. In a layman’s language, it is that area where you can lay your flooring or carpet.

Room sizes should be adequate for us to maneuver comfortably after all the furniture is placed. Room shapes should be ideally rectangle or square.

At times developers concentrate more on building elevation/form to make it prominent in the locality but that can result in odd shape rooms or acutely angled corners were placing furniture is not possible. It just becomes a waste of space; yet paying for that area is inevitable since it gets counted in the carpet area.

In the adjacent image, you may note how tricky or difficult it would be to plan furniture in the odd shape bedroom and the living room. Also, the toilet is of a funny shape. To ensure that room sizes and shapes entail you to use each and every inch of the space.

bad flat layoutd) Vaastu compliance – Many buyers are stringent about Vaastu compliance of the flat – whether it is east facing or west facing, whether or not the entry is in south etc. This is again a subjective factor with opinions varying from buyers to buyers.

Although being an architect, I am not an avid follower of Vaastu principles for an apartment flat, just because I am not convinced with the principles of Vaastu in a mass housing scheme. Vaastu was applicable then when people had their own dwelling unit on their own land.

So, if you are buying a plot or a bungalow, applying Vaastu principles can be convincing, but applying to an individual flat just doesn’t look convincing. Imagine for a moment, that you find a Vaastu compliant flat and choose to stay in it.

However, you later come to know that the plot, on which your building is built, is not Vaastu compliant. Further, in such mass housing schemes, it is extremely difficult to apply and comply with Vaastu principles.

So it all boils down to your ultimate choice – whether you want an apartment flat that is very good in layout but not Vaastu compliant or whether you are okay to compromise on layout and be satisfied with Vaastu compliance.

e) Deviation of room size – Further, it is very necessary to check the actual sizes of the rooms that are constructed. Brochures indicate room sizes uniform for all the units. However, they vary a bit as per the construction. A deviation of 1-2% is accepted as a standard norm because construction is never 100% accurate.

There is always a construction tolerance of 15-20 mm applicable. So ensure that you pay for the carpet area that you get.

4. The view outside your flat

This is a selling point that is hot favorite by the builders. “Sea facing flats”, “Flats overlooking the green fields/hills” and similar panoramic views become a USP of any project.

With the help of advanced software’s & computer-aided renderings, developers even showcase you during the sale inquiry, the view that you would get once you occupy the premises. We all become excited and we get emotionally attached to the property. While a good view enabling adequate daylight & ventilation is absolutely necessary, one has to be very careful of the ‘view’ aspect.

While you would be certainly happy with the view that you may get, you just need to ensure that you would enjoy it permanently or at least for the long term.

There have been instances where the customers have paid a premium price to achieve a great view from their windows but within couple of years, their view got obstructed permanently because of a new building getting constructed on the land adjacent to their building/premises. Here you can’t blame the builder too because things outside his plot, is not under his control.

So, if you are vouching for that great view at a premium price, ensure that there are no chances of development that could obstruct the view and even if there are any in the future, see that the daylight, ventilation & privacy will not get compromised.

In the image below, you can see how the new building on the right has blocked the view of the building on the left. Fortunately, the natural daylight & ventilation for the older building is still intact.

building blocking view

5. Specifications

When we intend to buy an electronic gadget, say a mobile phone, we tend to go deep into its specification – Operating system, processor, storage capacity, battery life, etc. All this study is carried out for a gadget that costs mere thousands of rupees and is with us for a couple of years.

Contradictory to it, a purchase like a property, which runs into lakhs and crores of rupees & which could be with us for decades, is finalized on the aesthetics and other generic factors mentioned earlier. Little do we get into the details of the specifications.

We seem to be satisfied with just the high-level things which are provided to us – wooden flooring, granite kitchen platform, wooden doors, vitrified tiles so on and so forth. But we ignore the specification of those materials.

For example, what type of wooden flooring, can it remain durable with daily floor mopping, what type of wood is used for wooden doors & frame, what brand of vitrified tiles is used, how the waterproofing is done & what is the technique used. All such questions need to be asked to the developer.

Yes, one has to first get appraised with the knowledge in some way, but that shall do a world of good to you. With Google providing answers to any question, it does not seem impossible for you to get into details of materials.

Developers generally limit their capital costs incurring on the interior finishes or items that become a part of the customer’s possession. They simply ignore the aspect of operational costs as the money goes out of the resident’s pocket.

Real-life example – My personal experience

Let me give an example of this. I was involved in a design scheme of bungalow projects in the city of Pune. The bungalows were meant to be of high-end finishes providing luxury to the owners.

All interior finishes were selected accordingly to meet the expectations of a luxury villa. Buyers went crazy over the finishes and it became a strong selling point. However, there were few other items which were equally important but went unnoticed – one of those was the glasses that were used for windows & facades. Everyone knows that Pune has a hot climate and the summers are extreme.

Needless to say that people do require ACs in their rooms. Now the tonnage of an AC depends on the size of the room and size of the window openings. Bigger the window opening more is the tonnage required as there is a considerable heat transfer.

There are glasses available in the market which cut down the solar heat getting transferred through it, without affecting the vision. If such glasses are installed, then there is a significant saving in the AC tonnage requirement which eventually saves the electricity.

But these glasses are a bit expensive compared to standard glasses. Needless to say, that builder chose standard glasses as his capital cost was involved and he was least bothered about the AC requirement and its consumption. You must have now got an idea of how important it is to have materials with appropriate specifications.

To conclude, the materials that are used as finishing items of the flat costs are always bargained to fit in the budget and hence may not be of the highest quality or the one that cut downs its maintenance.

They are all standard products that the developers get at a very low rate due to bulk ordering. Assess the items that have been proposed and if that would require frequent maintenance / periodic replacement etc.

6. ‘Luxurious’ and ‘Affordable’ homes

Developers have started a new trend of marketing their schemes like the one that provides ‘Luxurious flats’, ‘Ultra-Modern flats’ and even ‘Affordable homes’. While it is an individual’s choice of deciding how should be his lifestyle and gaining luxury with hard-earned money is no wrong.

But buyers have to be prudent in knowing what ‘Luxury’ is being offered. Understand whether the luxury is being offered as a spacious flat with a large carpet area or a standard / compact size flat with finishing items with high-end specifications.

If you ask me, luxury is having a spacious flat which will satisfy your needs & also give you good resale value. The other aspects included in luxurious schemes are amenities, spas, concierge services and many more.

While this can be a treat for people who really desire such facilities, for middle-class buyers it can become a big liability because once the builder hands over the scheme to become a society, then the overheads in maintenance can shoot up much folds.

So luxury will always come at a high cost and one has to decide about it with a long-term financial implication.

On the other hand, affordable homes are marketed with a certain attractive price tags. But they are located far from the city center. So the purpose itself gets defeated. Flats can be termed ‘Affordable’ if they are within the municipal limit of that city with good public transport & convenience factors.

But that is generally not the case. It is located far away in areas that have good low rates if you buy resale flats. Further, the specifications used for building materials can be substandard to reduce the overall construction cost. So it is better to check the specifications of all the materials.

7. Fire Safety (In tall buildings)

Tall buildings are sprouting up because of a lack of space in the city. It is also an economically viable option for a developer to go for tall buildings within a city where the development charges are high. Buyers too are excited to live in a tall building where they can enjoy great views, daylight & ventilation.

But what one doesn’t take seriously is the fire safety measures or evacuation strategy in case of emergency.

Below is a nice presentation giving the full specification of how a high rise building should handle various things at the time of construction to combat the fire safety issue. If you live in a high building, please check if your building has things mentioned in the presentation or not.

Builders do provide the fire fighting equipment & fire egress stairs since they are to be provided as per the building codes. However, one should ask the developer, the evacuation strategy envisaged in case of an emergency.

Ask them the fire rating of the walls and concrete structure. Fire rating means the time taken by materials to succumb under the event of a fire. Ideally, it should be rated at 1-2 hours.

Check the refuge area, where in case of emergency, residents are supposed to gather and stay safe till the fire personnel come and evacuate them.

Do take a look at the fire staircase & if possible, do descend by it. This is because, in case of fire, you are supposed to use the staircase & not lifts. A few months back only, there was a case of fire in a high rise building in Mumbai, where people died because they were stuck in an elevator

death in elevator due to fire india

So you should feel comfortable while getting down. Ideally, the builders should provide the fire fighting gadget – water sprinklers in individuals flat too so that in case there is fire, it is arrested by sprinkler burst.

But very few builders are committed to such precautionary measures as they understand the importance of safety. Others limit their scope only in common areas like lift lobbies and foyers.

If you are opting for a resale flat in such a building, ensure that fire fighting equipment is operational & that the society is committed to maintaining it. Also, ensure that all egress paths are free from any obstructions enabling comfortable progress.

8. Big versus Small Developers

It is a general opinion that one should buy property from big, reputed developers as their schemes & construction quality is superior. Someway, buyers feel more reliable on them and are willing to pay more expecting superiority, timely possession, transparency etc.

Let me be very clear that – this is a myth.

There are many small developers too who give equally good service. In fact, prices of the reputed developers are high to cover their marketing cost & branding. You are certain to get equivalent quality of flats from small or medium-sized developers.

The most essential thing is to check their past records irrespective of their stature. So before investing in their property check out the projects they have completed. Get in touch with the residents living in their old schemes.

Inquire with them if they got possession & occupancy certificate on time. Ask whether the process of builder handing over the conveyance deed for society formation was smooth or rough. See how the buildings are looking after a few years – whether they still look decent or have deteriorated rapidly.

Check the monthly outgoing of those societies and if it is high what are the reasons for it. After this survey, you will surely get an answer as to how good the builder is.

I believe with all the points that I described above, you must have got a fair idea about how complex it is to choose the right property and how one needs to be cautious, appraised of all the intricacies involved for selection. The above list is certainly not exhaustive and can be extended further but till then, this should hold good.

By no means am I discouraging anybody from getting into the real estate investment, but it is just a word of caution for buyers & investors.

Quick Checklist while buying the flat

  1. Information about the Land – to confirm if it is NA plot, non–reserved plot, freehold / leased, etc.
  2. Approvals for the projects (Varies from cities to cities)
  3. Infrastructure around the project/building – electricity, water line, telecommunication line, sewerage disposal line, stormwater drain line, etc.
  4. Potential development around the project.
  5. Facilities around the project – Public transport, hospitals, schools & colleges, markets, police station, etc.
  6. Track record of the builder – visit past completed projects
  7. Availability of funds for the builder to complete the project – whether it is a self-funded or bank-funded project.
  8. The overall scheme of the project
  9. Evaluate the probable outgoings once society is formed. More the facilities, the higher the outgoings.
  10. Carpet to Saleable area ratio – Prefer to carry out a transaction on the carpet area.
  11. Flat carpet area
  12. Flat Layout, Room sizes, and shapes
  13. Availability of adequate daylight & ventilation.
  14. Does the planning of the building/project provide comfortable access to senior citizens & handicap people?
  15. Good quality of finishing materials – flooring, kitchen platform, bathroom fixtures, windows, doors, paints, etc.
  16. Guarantee on waterproofing for bathrooms & flats below the terrace.
  17. Fire fighting systems and evacuation strategies.
  18. View from the building / flat.
  19. Do periodic site visits to check the progress and workmanship quality.
  20. Ensure a safe handover of the project from a builder to make a cooperative society.
  21. While buying a resale flat, ensure that the property is a freehold property & that the seller provides access to NOC from the society, Chain of all old registered agreements, Occupancy certificate, share certificate, Maintenance Bill, Electricity or Telephone bill, Property Tax receipt and Registered Sale & development agreement of Builder, Conveyance Deed.
  22. While buying a resale flat, ensure that the water supply is provided by the corporation / local authorities and not by tanker water. If that is the case, then either OC is not available or the water supply line to the area is not available. That will shoot up your monthly outgoings.

Hope you enjoyed reading it and let me know if you liked it. Thank you.

Disclaimer – The information and views expressed in this article are those of the author to create awareness and does not necessarily reflect the official opinion or guarantees the accuracy, completeness, currentness, validity in any way.

Neither the author nor any person acting on their behalf may be held responsible for any errors, omissions & delays in this information or any losses, injuries, or damages arising from its display or use. All information is provided on an as-is basis.

checklist for buying property
About the Author

Architect Abhijeet Patki is a practicing architect and a consultant to a reputed architecture firm in Mumbai. Graduated from the University of Mumbai, Ar. Patki has experience of more than 11 years in the field of architecture and interior design. Ar. Patki has worked on different kind of projects that includes IT Parks, Commercial Buildings, Residential Projects, Heritage Building, and many commercial interiors projects.

Update your Aadhaar card details online in 5 min and download a new one [VIDEO inside]

Posted on by Jagoinvestor

Do you want to know how to update aadhaar card details online? Yes – It’s possible. You can easily update your details online without any offline documentation and then download your new aadhaar card online and start using it.

Recently, I wanted to change my address details in my aadhaar card and I completed the whole process online by visiting the website of UIDAI. It was just a few minutes task and very easy. I have also created an online video tutorial with all the steps. Below is the video if you want to refer to it.

8 step process to update your aadhaar card details online

  1. Go to https://ssup.uidai.gov.in/update
  2. Enter your aadhaar card number and text verification code to generate the OTP
  3. Enter your OTP and then on the next screen choose the details you want to change
  4. Enter the details which you want to change and then proceed to upload the documents
  5. Choose the supporting document which you want to upload. Make sure the document is self attested and signed by you and scanned back.
  6. Note down the UTR number which can be used later to check the status

update aadhaar card details online

How to Check the status of your Aadhaar change ?

Once you have submitted the change request, you will get a UTR (Unique request number), which can be used later to check the status of the change. Here is how you check the status later

  • Visit https://ssup.uidai.gov.in/check-status
  • Enter your Aadhaar card number and the UTR number (without slashes)
  • You will get the status. It might be awaiting approval or might have approved already in which case you can then download your new aadhaar cared online and start using it

check status of aadhaar card details change

How to download your new aadhaar card after the update is complete?

  • Visit https://eaadhaar.uidai.gov.in/
  • Choose the option to enter your aadhaar card and enter all details
  • Generate the OTP and enter that to proceed
  • A PDF will get downloaded which can be opened by entered your pin code as the passport
  • You can now start using this new aadhaar card by taking a color Xerox

download aadhaar card online

Cases where you might want to change the aadhaar details

  • Your address might have changed after your aadhaar card was made
  • Incase of name change after marriage in case of female
  • Your mobile number or email id is changed
  • You have changed your name or your name was wrongly captured at the time when you applied for aadhaar card
  • By mistake your gender or date of birth was wrongly captured

I hope this tutorial was clear and easy for you to follow. The process to update aadhaar card details just takes 5 min of your time. Try it and let me know if it worked for you or not. Also do not forget to share this article with your friends circle; it would be very useful for them.

Update your FATCA declaration online in 2 min, if you are an existing mutual fund investor

Posted on by Jagoinvestor

Are you an existing mutual fund investor? If YES, then you must have got an email from the fund houses where you have invested to provide some additional information about yourself and about your tax residency related questions in the name of FATCA declaration.

In this article I will quickly guide you about what is this FATCA Compliance and how you can update this information with AMC online in 5 min.

What is FATCA Compliance?

Foreign Account Tax Compliance Act or FATCA was passed in US in the year 2010 to make sure that the financial institutions across the world share some basic information of their US based clients.

A lot of investors from US (US citizen and NRI’s residing in US) were supposed to disclose their investments outside the US, but it didn’t happen the way US govt was expecting.

So finally, US govt passed this FATCA law and signed treaties with various countries across the world. India is one of them. So now various financial institutions based in India are asking all their customers to give a declaration about their tax residency, place of birth and if they are paying taxes in any other countries. I am not going into too much of detail here, because you can read it in detail in this moneylife article here .

The main purpose of this article is just to help you understand, how you can update these FATCA details quickly in 2 min online.

All mutual funds investors are supposed to update their information with AMC’s by the end of Dec 2015.

If an investor fails to update their FATCA declaration, then their additional investments will not be processed in future and any SIP which is currently running will also get stopped. So it’s suggested that you complete the declaration as soon as possible. Note that your existing investments will remain intact and there is no impact on that.

How to update your FATCA related information online?

It’s very simple. All you need to do is visit the following two links and update your information.

I have created a short video tutorial on how to update the FATCA information online. Please check it below

Note that a mutual funds is either serviced by CAMS or Karvy (all funds except franklin Templeton, go this link where you can update FATCA for franklin). So these agencies have come up with the links online where one can update all their information.

When you update your information online, an OTP will be generated which will be send to your email/phone which is registered in their records. If you are invested in mutual funds which are services by CAMS (like Birla, ICICI, HDFC etc) , you just need to update the first link (cams one). If you are invested in mutual funds which are serviced by Karvy like Reliance, UTI or Canara Robeco, then you will have to update the karvy link as well.

Below is the snapshot explaining how you can update the CAMS link 

Update FATCA online

In the same manner, you can update the Karvy link with your FATCA information. The OTP will be generated in that case also and all the information is same. You need to update the karvy link, only if you have invested in any mutual fund serviced by them in past.

In anycase, my suggestion is to try to update both the links. There is no harm anyways

FATCA Impact on US & Canada NRI’s ?

So what is the impact of this FATCA declaration on those NRI’s who are based in US and Canada. Let me be very brief and to the point here. Only 3-4 AMC’s in India are going to except fresh investments from US & Canada based NRI’s. Few of them are UTI, L&T and Sundaram mutual funds. so if you are a NRI based in US and Canada, now you will not be able to invest in mutual funds from HDFC, ICICI, Birla, Reliance and many others.

However any existing investments can be continued (SIP wont be continued, but the current worth in those funds will be as it is) . One can redeem them whenever they wish to.

NRI’s based in other countries can invest in any fund house they want.

Incase you have any question on this FATCA declaration, feel free to ask your queries in comments section

Want to buy health insurance with small premium? – Use super topup policies?

Posted on by Jagoinvestor

Do you want to know how you can take a high health insurance coverage at a cheaper premium, without compromising on the benefits and features? Today I am going to share how you can do that using top-up health insurance policies.

Gone are the day’s when Rs 2-3 lacs of health cover was considered a good cover, its not even average cover these days. With rising health care cost, a health cover below 5 lacs is just not sufficient for most of the people. I am confident on that, because in last 6 months, we have helped more than 1000+ people to take their health insurance and majority of them ended up with a coverage in range of 5-20 lacs.

I know, a lot of investors understand the importance of high health insurance cover, but they are unable to afford a high premium. So what is the alternative?

Use Super Topup Policies to increase your health cover at lower premiums

The solution is Super topup policies.

You can use Super Top-up health insurance policies to upgrade your health cover by paying a lower premium. Super Topup plans are the health insurance plans which pays only when a certain threshold is crossed.

For example, consider a super top-up plan for Rs 20 lacs with deductible of Rs 5 lacs.

In this case, the policy will pay only when the initial Rs 5 lacs is paid off and they will pay the additional amount above Rs 5 lacs. So if the claim amount is Rs 12 lacs. The policy will only pay Rs 7 lacs (over and above 5 lacs deductible. If you are new to this concept, we have already explained the topic of super top up in detail here, please read it first.

So how can you use super top up to take a higher cover?

Instead of taking a full cover of X+Y amount, you can take a base cover for Rs X and take a Super topup plan for Y amount with X as deductible. This way you will be covered upto X amount by the base policy and for any claim above Rs X, the super top-up policy will get triggered and come to your rescue.

The main benefit here is that the Super Top-up policies come very cheap and overall your premium will be small.

Example of 3 member family (2 adults below 35 yrs + 1 kid)

Suppose you want to take a high cover like 20 lacs for your family (3 member family). Here you have two choices

Choice 1 : You can take a stand-alone policy of Rs 20 lacs here. If we take an example of Optima Restore Family Floater, the yearly premium would be Rs 23,527.

Choice 2 : As 2nd choice, suppose you the same take the same Optima Restore Family Floater for Rs 5 lacs, which will cost you Rs 12,513 and on top of it, you take a 20 lacs super topup from L&T Medisure Super Top Up with 5 lacs deductible, for which the premium would be Rs 4,389. So the total premium in this choice will be 16,902.

That’s a saving of 28% in premium.

However, note that both the choices will differ with each other, because from features point of view there are a lot of differences in both the choices.

So for those who already have a 5 lacs cover already and wanting to increase their cover to 15 lacs total, below I have listed down some companies top up cover plans and the extra premiums they will have to pay.

Below is an example of how you can increase your health cover from 5 lacs to 15 lacs (or take 15 lacs cover).

super topup plan example

Do you have a small health cover right now?

So, ask this question to yourself? Do you have a small health cover of 2 lacs, 3 lacs or max 5 lacs and you want to upgrade it to a big number like 15 lacs or 20 lacs?

For the sake of explanation, let me take an example of 5 lacs existing cover and lets see how you can increase it to 15 lacs for a small premium increase. So all you need to do is take a super top-up cover of 15 lacs with 5 lacs deductible. Below are some plans with the premium amount for a single individual of age 35 yrs.

Premium for different Super top up plans in market

Comparison of Super Top-up Plans in Market?

Below I am sharing the comparison of various super top up plans in the market and how they differ from each other on various parameters.

Top up policies comparision

Why Super top up premium is less?

I am sure many investors will have this question in mind that “Why is the premium for a super top up plan so less?“. The answer is that the probability of a super top up getting triggerred is statistically very less and hence the risk for the insurer is not that high.

Think about it this way. If you have a large cover of 15 lacs right now, what  would be the hospital bill on an average? Most of the times, it would be in range of 50,000 to 1 lacs if you get hospitalized for a minor case and few lacs if there is some accident or some major issue.

Only in a very very fatal case or if you are highly unlucky, your bills will run over in the range of 10-15 lacs and thats going to happen once or twice in your lifetime. So the chances for a company paying for a claim above a certain threshold is very less. That’s the reason the premium for a top up plan is less. Higher the deductible, lower the premium.

Is it advisable to buy the base plan and super top-up from the same company ?

The answer is YES. If your base plan and the super top up plans are from the same company, it would surely help because you have to deal with the same company for both the claims. The documentation process is more simple and the communication is smooth. The company will not find any issues because it has all the records with them.

However note that even if you have it from different companies, it’s ok. You ultimately have to look at the features and what combination works best for you and if the total premium is affordable to you or not.

What are Convertible Top-up plans ?

Lately, a new kind of top up called as convertible topup plans are coming up in market.

“Some companies offer Super Topup plans with an additional feature that allows the plan to be converted into a base plan. This is done by buying out the Deductible in the plan.

For instance, if you have your company health insurance for Rs. 3 Lakhs you could buy a Topup of Rs. 15 Lakhs with a deductible of Rs. 3 Lakhs. In case you leave this employer, and/or are without cover, you can apply for buying out the deductible at the time of renewal by paying additional premium. There are certain conditions/triggers based on which this feature gets activated into the plan.

This is an excellent feature for people who feel that they would be working with employers who will provide health insurance cover all their working life, without any break.

For instance,

In case of Religare Enhance – The convertible feature gets activated after 4 continuous renewals. The plan has a waiting period of 1 year for Pre-existing diseases

In case of Apollo Optima Super – The option is available for customers who have bought the policy before crossing the age of 50 years. The option can be opted between the age of 55 and 60 years at the time of renewal by paying additional premium, if the policy has been renewed continuously without break. “

Who all should buy a super top up plan ?

  • Those who are having a small cover by themselves or a group cover through their employer and want to increase their cover (ideally you should have a base policy for a minimum amount)
  • Those who are right now having a small cover and want to upgrade it
  • Those who can take care of small medical bills themselves (like up to 2-3 lacs) and only want help in case of bills beyond that number by paying a small premium

Other Important Points related to Super top-up plan

  1. A super top up policy can be taken stand alone – A super top up policy can be taken without a base policy. There is no compulsion that you should hold a base policy.
  2. Premiums will rise as per age slab – You should be aware that just like a normal health insurance plan, a super top up plan premium will also rise as per age slab in coming years, so even if the premiums look very small right now, it’s bound to increase later
  3. No Claim Benefit not present – Generally super top up plans do not offer No Claim Bonus (NCB) . This is the primary difference between taking a base cover of a high amount and combining a small cover with top up cover, because then you loose on the benefits of a No Claim Bonus over the years.
  4. Not always a great option – Just because the premium is less, it does not mean that combining a small base cover with a super top up is always the best plan. Depending on situation, you need to find out if its a good option in your case or not. It might happen that you might loose out on some benefit and feature on the top up plans

I hope this article helped you to understand how you can increase your health cover at a small premium. Please ask your questions if any below in comments section

8 unbelievable tricks real estate agents play when you visit the project

Posted on by Jagoinvestor

I recently inquired about one of the plot schemes near Pune and finally visited their project. They sent a car to pick me up. When I reached the site, the staff there sounded very professional compared to some other experiences I have had in past.

While I had a good experience interacting with the sales person on the last project I visited, I realized that often that does not happen with many people. A lot of education needs to happen on this topic, because many investors who go to meet brokers for the first time or to do site visit are lured by some tricks and fooled a lot of times.

real estate tricks by agents

So I have created a list of points, which I want to share with all the prospective home/plot buyers. Some of these points are tricks played by agents, and some points are suggestions on what you should do when you meet a builder, broker, agent or sales executive who is showing you or explaining about a project.

Here are those points one by one. Detailed description of these tricks can be seen after this table.

[su_table responsive=”yes” alternate=”no”]

Trick #1

They create artificial scarcity and try to rush you

 Trick #2

Don’t show the eagerness to buy
Trick #3

Don’t get mesmerized by Sample flat or Jazzy brochure’s

 Trick #4

Ask for the legal documents and regarding the basic amenities
Trick #5

Say that you are seeing other nearby projects as well

 Trick #6

Don’t be tempted with awesome deals and discounts, they are well designed
Trick #7

Ask which all banks have approved the project

 Trick #8

Don’t get over obsessed with the “upcoming infrastructure”

[/su_table]

1. They create artificial scarcity and try to rush you

An year back, I got an email from one of the builders with the list of available flats, area, price per square feet and final price of the flat. Out of 600 flats in the project, Around 90% of them were marked as “SOLD” or “BOOKED” .

Just by looking at that, I got a “left out” feeling. It appeared as if everyone in this world is owning the plots and flats and its just me, who will be left behind. A voice from inside said – “Go, book that plot NOW, else you will regret all your life”

I had no way to verify if they were really sold or booked by someone. I just had to rely on what the excel sheet told me. This created a sense of emergency. The feeling I got was – “I need to hurry, else I will lose out on the opportunity”. Almost 80% of the time, this is artificially created by the sales executives.

See the table – 

sample cost sheet builder

If a sales executive tells you that you have a week’s time, multiply it by 10. That’s the time you generally have in real life. Some of the things you will hear from sales executive will be as follows

  • Sir, All the 2 BHK are sold except 3 units. You will either have to book it in next 10 days or go for a 3 BHK (they know you don’t have the budget for 3 bhk)
  • Sir, 58 flats are booked already in the pre-launch. This price is only for this Diwali after, which it will go up by Rs 300 per sq
  • This price is only available for this exhibition because of pre-launch offer, once the “actual” launch happens, the rate would be at least Rs 100 more per sqft.

At times, you might really lose on some good opportunity in real life, but maximum number of times – its a sales trick. This is exactly the reason why they generally ask you to come along with cheque book, so that in order to not lose the opportunity, you will book the property right there and then by paying a token amount.

Note that this trick of creating emergency is a general sales trick and applies everywhere.

2. Don’t show the eagerness to buy

If you are seriously looking forward to buy the property and want to get a good deal, then do not show your eagerness to buy. Hide that over enthusiastic and needy person inside you.

Hide your temptation and do not show that you are dying to buy the property. The moment they sense, that you are already sold out in the game, it will be very hard for you to negotiate on pricing and other things, because they are very sure that you will not be stopped by minute points.

The agents/sales executives are paid commission on closing the deal and they will go to an extra mile to close the deal with you. Show them that you are not in hurry and your life does not depend on the property. Show them that you are a serious buyer who is not in hurry and if they have to win you, you will require a good incentive to invest money.

They will ask you for booking amount, token amount, they will give you “last date”. But don’t take a decision in hurry. Do all your investigation, scrutiny, and think on how you will arrange the money. Here is a nice comment from someone on the Indian real estate forum

Fully agree. Don't negotiate with fear in mind that this is your last chance, and so far nothing worked for you (frankly, if you have this fear, would suggest don't even bother to negotiate, and more so don't get into RE market). Be prepared to walk away right from the beginning. Don't buy builder claims that they are going to increase rates, all flats except one sold out, they have enough cash, etc.
Show them you are not emotionally attached and this is one of the many options. Also, don't close deal in first meeting (if you do, most probably that means you did not negotiate enough). Last but not least, you have all the negotiation power before handing over the money, once you pay them, your negotiation power is zero.
In general one who pays should be enjoying greater power, in reality we don't see that in RE market, more so in Pune RE. That was easy said than done, have tried it, and it works, key is patience.
As I said in the first point, most of the times the emergency is not real, its often the created one!. However, this does not mean that you delay things beyond limit, thinking they will come back to you all the times. If there are other leads who are ready to buy the property, you will not be contacted beyond the point. So keep a balance

3. Don’t get mesmerized by Sample flat or Jazzy brochure’s

Human visualize and fantasize about everything in life

This is the reason when you see jazzy brochure’s, the lush greenery, clean atmosphere and a world beyond reality, you visualize yourself living in the serene beautiful place which has no traffic, no tension and a all perfect life. I am yet to meet anyone with whom it has really happened 🙂

Please, do not do any booking only on the basis of the brochure, some presentation or looking at a sample flat.

Make sure you visit the actual project site and see the location, how well connected the area is city, how are the roads, what’s nearby the place and other important factors. A lot of people book properties in real estate expo and exhibition, which I don’t think is a good idea at all.

Real life example

I once met a sales representative who came to explain me about a project in WAI (near Panchgani, Maharashtra) and he sold a story which looked so amazing, that my inner self-was ready to book the property right then and there. I was so excited to take a look at the site.

However after a week, when I actually visited the site, all my excitement died because the reality was so different than what I had visualized. I must mention that it was not the sales executive fault here and he had not given any wrong information. In fact, he was a brilliant sales person and very professional.

The problem was me myself. I have over-estimated the greatness of the project and its location, because of the jazzy brochure.

jazzy real estate brochure

In case of residential flats, remember that the jazzy brochure and the sample flats are created to exploit the human imagination and sell you dreams. What you actually get in reality will not be exactly like sample flats you see.

You won’t believe, but there are professionals who are hired by builders to give mesmerizing presentations to prospective buyers, especially NRI. Presentations are arranged in 5-star hotels and bills are paid in lacs of rupees. Here is one gentlemen explaining how it happens. Please see the video below

I am not saying that brochure’s are not important. They surely play a big role in marketing and you get a very good idea of what is the project all about, but go beyond that.

Judging a property by just looking at brochure is exactly like hiring an employee by just looking at resume.

4. Ask for the legal documents and regarding the basic amenities

You are probably doing one of the biggest investment of your life-time. Right?

If your buy something which is junk, you will regret it all your life. There are millions of people in India, who are dealing with legal issues today because the land they bought is disputed, the required sanctions were not taken and many other issues. So just don’t feel shy about asking legal documents. There is no hurry in doing the agreement.

Simply ask the sales representative to provide you all the legal documents, sample agreement copy and all approval related documents. For god sake, take the documents to a property lawyer and pay Rs 10-20k fees to consult him, before you buy that 75 lacs flat!.

The lawyer will check the documents and help you understand, if the project is totally fine or has some big trouble. Then you can take the decision of moving ahead or not.

It will save you a lot of money and energy in future. It’s not a very healthy sign if the sales person is constantly avoiding the conversation regarding legal documents or if he is hesitant in providing you a copy of the agreement.

Ask about surrounding area and the development coming up

Apart from the legalities of the project, you also need to inquire in detail about the surrounding area and what all development is coming up in future. Ask things like

  • Is some flyover planned?
  • Is some college coming up?
  • What kind of markets are nearby?
  • How far is bus stand?
  • How far is the main highway
  • From where will the water connection come?
  • What about electricity connection?

While you might not be able to verify a lot of things, but at least you can know about the basic amenities. Things like water is really a cause of concern

5. Say that you are seeing other nearby projects as well

Before you go to the project site, inquire about the other projects near by. At least, go to the websites of those projects and memorize the names, location etc. If possible inquire on phone about their rates.

Then, when you are talking to sales representative, share with him about all this. Let him know that you are an informed investor and if he has to win you as customer, you should be offered a good deal.

I can assure you, there is always a possibility of Rs 25-50 per square feet discount if you ask for it 3-4 times. Tell them that you had heard about the lower rate from one of your friends or tell them that someone else from their sales team had called them and shared about the lower rate few weeks back and that’s the reason you are inquiring. The sales person always has that much margin in his hands.

The big boss always tells them – “If you see that customer will go away, offer him up to Rs 25-75 discount per sqft, but only in worst case”. There is nothing wrong in asking, the worst case is that you will not get it.

6. Don’t be tempted with awesome deals and discounts, they are well designed

So the builder is giving you are modular kitchen included in the flat? WOW .. Who is paying for it? Definitely not you! . Come on! .

It’s all included in the price. Instead of 49.5 lacs, he is charging you 50 lacs and giving away the free modular kitchen worth Rs 50,000. What’s so great about it?

Some builders in premium segment also offer a car along with the house. Book a Villa and get a car. Sadly, that means “My project is not able to sell, here is my last trick on you by offering you a bait”

Trust me, If I were a builder who is selling a 4.5 crore villa, I can also come up with such offers. Increase the price and give the car along with it. At the end, its the customer who pays the price.

offers and discounts in given by builders

Understand that whatever you are getting is funded by your money only. No one in their right mind, will give any kind of discounts or offers because they have a big heart. It’s all money game. It’s just a way to emotionally exploit you and make sure you feel great about yourself. Just because its bundled offer, it looks very good.

7. Ask which all banks have approved the project

A good way to filter a good project from a bad project is to see if its approved by many lenders or not. If all major lenders have approved the project, its a sign that the basic level checks are done by lenders and you can now trust the project more. It does not mean that you should not do your homework further, but the primary level of investigation is done.

If a project is not approved by any lender or some not so famous lender has approved it (just a single one), there is a possibility that something is fishy.

Probably some approval is not taken care of, or may be the land is disputed. You should also ask them if they have a good crisil rating. Go and check the pdf on crisil website for that project.

I lot of small time builders offer their own EMI scheme like pay 20% now and rest in EMI for 5 yrs . This happens a lot in plots especially very far from city. I am not saying that they are bad always, but you should be a bit cautious with them on legality factor.

8. Don’t get over obsessed with the “upcoming infrastructure”

There will be lots of promises (real and fake) made to you. You will listen about the lots of development projects, the ring road passing from that area, the grand temple coming up, the new wide road which is planned and many such things. Some of them might happen in reality, but not always.

real estate promises

A lot of plots schemes are sold as “Proposed NA” status (which means soon it will be approved for residential purpose) and the agents will tell you that they have put an application to convert the land from agricultural to Residential which will take just 1-2 yrs.

But don’t believe them blindly. Converting a land status is a big task and in most of the cases, it might take 10-20 yrs time or it might never happen. A lot of investors are stuck with the plots paying huge money which they cant use. Don’t take decision in hurry.

Take your decision with caution

Real estate is a complicated investment and a lot of factors decide if you are making a right investment or a wrong one. As its one of your life biggest financial decisions, make sure you do not hurry and take your time. Everyone is there to make money out of you.

I would like to hear about your experience and what you have faced in life with different real estate agents and builders. Please share your unique learning which can help someone else. I would like to keep adding more and more experiences and tricks which you will share with me here in comments section.

No more sending ITR-V by post after income tax filing – Verification with aadhar card introduced

Posted on by Jagoinvestor

There is a good news to taxpayers. CBDT recently announced that taxpayers who filed their income tax returns online will no longer have to send the ITR-V paper acknowledgement by post to CPC Bangalore, if they have aadhar card which can be used for verification purpose.

Instead of manual verification, a new Electronic Verification Code has been introduced to verify the e-returns. For that one will have to mention their aadhar card number in ITR form, and tax-payer will get an OTP number on their mobile for verification, which needs to be completed on the website of tax filing.

Below is a snapshot of the new ITR form where aadhar card number is asked in case you have it.

aadhar card section in ITR form

Issues with the old system

Earlier the process was like this. Once you e-filed your tax returns, you then had to send the acknowledgement copy within 120 days to CPC Bangalore. Only those who had signatures could do verification online, but it was very rare, hence millions of tax-payers had to take the pain of manually sending the form.

However, the old system was not robust and a big number of people used to get messages that their acknowledgement has not reached tax department and other manual errors used to happen.

With the introduction of this new system, things will be simplified and even faster. Now the process will be as simple as filing the tax returns online and they will get a one time password for verification purpose on the registered mobile number, which has to be used for verification on the website of tax department. That would complete the process of verification.

efiling verification with aadhar card

But I don’t have Aadhaar Card ?

Don’t worry. You can always send the physical documents ITV-V to CPC, Bangalore like you did earlier. You can do that even if you have aadhar card. This new system of verification is just an alternative way for those who have aadhar card.

What do you think about this new system?

Write us your opinion on this in our comment section.

How to pay Income tax online in 5 min ? Use Challan 280

Posted on by Jagoinvestor

Today I will show you, how you can pay your income tax online using challan number 280 on the income tax website. Most of the people rely on their CA and other service providers to paying income tax. Salaried class mostly don’t need to pay additional income tax most of the times at the end of the year because anyway their employers pay it on their behalf.

how to pay income tax online in 5 min with the use of challan 280?

However, one might come across a situation where they have to pay their income tax themselves in following situations like.

  • If TDS deducted is less than the actual tax liability?
  • If you have got a notice for balance tax to be paid
  • If one has any other income apart from salary

What is Challan 280?

Challan 280 is the form which is required to be filled when you want to pay your income taxes. This can be done offline at the bank, or you can also pay it online. We will see both of them

How to pay income tax offline at the bank?

One can physically go to the bank and submit the filled challan 280 form along with the money. You can download the challan 280 from Income Tax website.

How to pay income tax online?

Another way to pay the taxes is by filling up challan 280 online and making the payment through your net banking facility. I have included the steps one needs to take below. Also, you can see the video below to learn the steps.

Step 1#: Choose the option “Challan 280” from income tax website

The first step is to visit this link and click on the option “Challan 280”.

challan 280

Step 2#: Fill details on the Challan 280 form

Once you click on the challan 280 link, you will be directed to the page which will ask you various details.

How to fill challan 280

  • Choose (0021)INCOME-TAX (OTHER THAN COMPANIES), which is to be chosen by individuals
  • Choose an assessment year, which is next year for which you are paying income tax. So if you are paying income tax for the year 2013-2014, the assessment year will be 2014-2015
  • Enter your PAN Number, address, Email, Phone etc
  • For Type of Payment, you can choose “(300) SELF ASSESSMENT TAX” if you are paying the final income tax for the year, or “(100)ADVANCE TAX” if you are paying the advance tax.
  • Choose the bank name from where you are going to make the payment and finally click on the “Proceed” button which will take you to the next page for confirmation of all the details entered by you

Step 3#: Verify Details and proceed for payment

On the next page, you will be asked to verify all the details you had filled. It’s important to check that the name mentioned on this page is for the same person for whom the income tax is to be paid. It should match with the PAN card holder name, also match the assessment year, email and phone number and other details.

confirm details before paying income tax online

Step 4#: Enter your login details for the bank

On the next page, you need to enter your bank username and password, so that you can make the payment finally.

make payment income tax online
Step 5#: Fill the Income-tax payable and make payment

The next step is to enter the income tax amount and other details as applicable and then finally hit the payment button.

income tax online payment

Step 6#: Download the PDF receipt and also get it in your email

Once you make the payment, it will give you an option to download the challan receipt in PDF format. You can save it on your computer. Also, you will get the email containing the challan copy anyways.

Challan 280 Reciept

I hope you got a good idea of how to pay income tax online. In case you have any questions, please ask in the comments section below.

4 important things to complete when you Close your Home Loan

Posted on by Jagoinvestor

It’s a dream of most of the homeowners to own a house without any loan on their head. It’s a great moment in their life, when they pay the final EMI of their home loan or pre-pay the full outstanding balance and clear the home loan fully. It’s a moment of pride and happiness. It’s a great relief for someone who was paying the EMI from so many years continuously.

closing home loan

However in that excitement, a lot of people do not take all the required actions and later suffer because of small things they didn’t complete after closing their home loans. In this article, I want to share few things every home owner should complete, when they are closing their loan.

While I am focusing totally on home loan closure in this article, but whatever I am going to share also applies when one closes a car loan, education loan, personal loan or any other kind of loan.

Point #1 – Take back your original Documents from Lender

This is a no-brainer.

Make sure that whenever you close a home loan, you take back all the important document you had submitted at the time of taking the loan. Original documents are really important to collect, because in future if you want to sell the house or want to take loan against property, that time you would require all the documents. Some of the documents we are talking aboout are …

  • Original Sale Deed
  • Original Conveyance deed
  • Power of Attorney
  • Possession Letter
  • Your Payment Receipts
  • Any Cancelled Cheque’s given

Some lenders even give you a copy of letter, mentioning what all documents were submitted by you to the lender at the time of taking the loan. Below is a sample list of documents mentioned by HDFC LTD to one it’s loan takers. It clearly mentions exactly which documents were taken by the bank at the time of giving the home loan. This really helps, because there is no confusion later and lender is also accountable towards the customer.

documents list home loan

Make sure you personally go to the branch and collect all the documents yourself. Do not ask the lender to send the documents via courier or speed post. There are tons of cases where the documents were misplaced and investors had to run from pillar to post to get them back.

After getting the documents, you should also check if they are in good condition and no pages are missing from between. Also – If you can’t collect the documents yourself for some reason (like when you are out of country) then you can give an authorization letter to someone trusted, who can collect the documents on your behalf or ask bank to wait till you come back yourself and then take the documents.

Point #2 – Take NOC from the lender

NOC or No Dues certificate is a legal document provided by the lender, which certifies that you have repaid the full loan and no outstanding balance exists. The document will have the lender stamp of the lender. It’s extremely important document, which you should collect from the lender. Below you can check out the experience of one investor who had no proof of closing the loan and how he faced issue due to that.

NOC document

Usually, NOC/NDC is dispatched by the lender after the loan is fully paid. But if you do not get it by default, then you should talk to your lender. I have already written in details about the NOC and its importance

Point #3 – Remove Lien from Registrar Office, if any 

Let’s first understand what is the meaning of “Lien”?

Lien means “a right to keep possession of property belonging to another person until a debt owed by that person is discharged.”

lien meaning home loan

What is means in simple language is that, the lender will keep the right to sell the property themselves, if the loan taker is not able to pay back the loan. These days banks do not put a lien on property, because they anyways check the background of the customer properly and keep the original documents in their custody. But at times, it can happen that due to customer background or on a slight suspicion, lender wants to put a lien on property, which is done in registrar office.

So you should surely check with your lender, if they have put lien on your property or not?

And, If they have – then you should ask them to help you to remove the lien and overall process. Some people will ask – “What happens if I do not remove the lien?”

If you do not remove the lien from your house, then you will face difficulty at the time of selling the house in future, and at that time you have to visit the lender again anyways. So please make sure you complete this part as soon as your home loan is closed.

Once you clear the lien from your property, you can verify it back by applying for a new encumbrance certificate, which should mention that there is no encumbrance with the property, means no one has any legal rights in the property. You should see that its mentioned in the certificate. I was able to find a sample certificate on the internet which you can see.

encumbrance certificate sample

Even if you are planning to not sell your house in future, still make sure you don’t skip this step, Its always a good idea to make sure 100% process is followed.

Point #4 – Make sure your CIBIL report is updated with CLOSED entry

CIBIL report is one document which records each of your loan entry and all your actions of payment. Each lender checks this CIBIL report before giving any kind of loan to you (even when they give you a credit card).

Once your home loan is closed, your bank should update CIBIL, that you have closed your home loan and an entry called “DATE CLOSED” should appear on your report with the date of closure.

But many a times, banks delay this small action or completely ignore it for months and years. Your CIBIL report might not have that updated entry. So you should double check with your bank at the time of closure of loan that they will update the CIBIL very soon.

update cibil report after closing loan

So when should you check your CIBIL report again? A good practice is to check it after 60 days of closing the loan and verify if there is an entry of “DATE CLOSED” with a date on it.

Make your Home loan closure 100% full proof

I have tried to make sure that you take all the last mile steps after closing your homeloan. Even if you prepay your home loan early, still you need to take all these steps, otherwise your home loan closure will not be 100% full proof.

Let me know if you want to add some other point in this list and I would be happy to add it.