Investing in real estate is not just about finding the right property, getting finance and earning a good return. But buying real estate in India can sometimes turn into a nightmare due to disputes. This might be from real estate agents, builders, sellers, the council or even your neighbours. Such disputes can lead to a wastage of money, energy and time. To be a successful real estate investor, you must know how to avoid disputes as much as possible. Therefore, we bring you five tips on how to avoid property disputes in the real estate arena and minimise the risk involved:
Hire a credible real estate agent
Non-disclosure of the complete information about the property by a real estate agent is one of the main problems which hunts most of the buyers. If you are considering a real estate agent, there are a few points you should remember:
A real estate agent should act as a neutral party in the buying process. It’s wise to hire your own agent than to pay brokerage to the seller's party.
Hire experienced and professional agent because they have a good knowledge of the local markets and they are professional in their approach.
Verify the agent’s registration, licensing and other background information before opening an account.
Discuss the brokerage and the scope of work before hiring to avoid unnecessary disputes in the future.
Discuss details of the property with the agent before giving him money. If the agent is unaware, it is better not to choose him.
Prevention is always better than cure. There is a popular misconception that you only need to call a lawyer when something has gone wrong. In fact, the best time to hire a lawyer is well before you face any problem. If you’re about to look into buying real estate, hire an experienced lawyer, even if it costs money. By having a trained lawyer on your side, you can rest assured that you’re making a smart investment with your money. Here are a few tips:
Ask your lawyer to handle pending transactions fast enough, and give advice on legal litigations.
Involve your lawyer in preparing letters of intent. It is frequently used to document the agreement of a buyer and seller concerning the economic terms of a transaction.
Ask your lawyer to make binding contracts.
Get the first draft of the contract created by your own lawyer. It is not easy to change the contract drafted by the second party.
Get your lawyer involved in the property buying process because your lawyer knows the legalities. He can ensure that the purchase and arrangement is legal from the beginning to end.
Check builder’s background
Since all real estate activity involves a large amount of money, it is imperative for you to do a complete and thorough background check on the builder and their credibility before purchasing any property. Find out details of previous completed projects of the builder, track records and ensure that they are members of real estate bodies like CREDAI.
Before signing the sale agreement with the builder, you should go through a delay clause in the agreement. Make sure that the construction stages with timeframes are clearly included in it, along with a copy of the approved plan. Always check the progress of the project at regular intervals.
It is also vital for the property plan to have all the requisite approvals, needed from the different departments of the municipal corporation. Make sure that any licenses, if required, have been obtained from the concerned departments.