The Buying Process

How to go about finding a property to buy in India. What to look out for and how to ensure a smooth experience...

Finding a property

Finding a property for sale in India can be handled by the buyer themselves or through a real estate agent. It is important to note that only locals are permitted to buy agricultural land of any kind, including farmhouses, and dual ownership with a non-local is prohibited.

Estate agents (realtors) in India are not required to be certified. This means that the quality of knowledge and service may vary greatly. Use a well-established or personally recommended agent.

Assessing the property

Buying property in India involves a strong element of Caveat Emptor (let the buyer beware). Pre-purchase investigations should generally include the following:

  • Ensure the property has a Certificate of No Objection (NOC)
  • Check that the title has not been tampered with in any way. The local councils and land registry will be able to confirm the title’s legitimacy
  • There are no outstanding loans or liens on the property. This includes checking if all past utility bills have been paid and property tax payments are up to date
  • If the previous owner is deceased, ensure that the inheritors are in agreement on the sale and that the will has been probated

Doing the paperwork

In many countries it is entirely possible to handle all the paperwork privately. In India this is much more difficult and it is strongly recommend to retain the services of a local lawyer to deal with the administrative details of due diligence.

In most cases, it is not necessary to seek permission from the Reserve Bank to buy a property, but if this is required the paperwork is extensive and complicated. In almost all cases, paperwork will need to be lodged with the Reserve Bank within 90 days of the sale and other documents lodged with local authorities.

The contract of sale

A deposit is paid and an agreement signed. This will need to include clauses covering situations where either the buyer or the seller default on the deal. If disputes arise, they will generally be handled by the local courts which may be a lengthy process. Ensuring all contingencies are included in the contract of sale may save time for all parties.

Associated fees

The typical fees associated with buying property in India are (from Saffronart’s Real Estate Pages):

  • Stamp duty
  • Registration fees
  • Legal fees
  • Brokerage fees
  • Society transfer charges (in buildings with societies, also known as body corporates)
  • Cost of renovation/improving the property
  • Cost of furnishing the property
  • Future house tax/property tax payments
  • Maintenance fees, whether at actual or in the form of monthly payments to a society (body corporate)

The site also notes that if buying a new property, the developer may not fully disclose all the fees borne by the buyer to ensure their new build is habitable.