Buying a house is one of the most significant financial investments in our life that requires a hefty sum of money. Therefore, it’s important to take a rational approach to choose it. Before closing a deal, you must consider your requirements, budget, and long term plan. Moreover, you should understand the processes involved in buying or selling a property. While buying a house, you might come across many jargons that may create confusion. Therefore, in this blog, we have shared a few real estate terminologies that you must know before entering the real estate market.
- Auction- A government or private organized sale where a property is sold to its highest bidder.
- Advance Payment- It is the amount paid by the buyer to the seller while signing the Agreement to Sell. The amount varies between 10% and 20% of the transaction amount.
- Zoning- While buying the house you should check whether it’s located in a residential, commercial, or industrial area. If you are interested in using a portion of your house for commercial purpose, then it’s important to check whether the zoning law allows this.
- Carpet area- This includes the area of a flat which can be carpeted.
- Benami ownership- The title of such a property is not in the name of its owner.
- Built-up area- This includes the total area of the flat including the carpet area of the house and the space occupied by walls and ducts.
- Super built-up area- This includes the built-up area and the common spaces like lifts and staircases that are not owned by the buyer, but used by many flat owners.
- No objection certificate- This certificate ensures that the property conforms to the pre-specified guidelines.
- Encumbrance certificate- This is issued by the registrar of assurances or sub-registrar’s office ensuring the property is free from all encumbrances.
- Stamp duty & registration fee- Paying the stamp duty and registration fee are important steps towards buying a property. After paying these taxes, you will be issued the legal documents ensuring that you have purchased the property from its previous owner.
- Collateral- This type of property provides additional security in the repayment of a loan.
- Freehold property- If the owner of the property has conveyed the property in favour of the purchaser by signing a sale deed, this type of property is called a freehold property. The record of such properties can be ascertained from the office of the sub-registrar.
- Joint ownership agreement- This type of agreement is signed between two owners of a property, where they agree upon their rights, ownership, monetary obligations, and responsibilities.
- GST- For buying an under-construction flat, a GST of 5% is charged. And, if the property belongs to the affordable category, then 1% GST is charged.
- Mutation- This process includes the change of a property’s title in revenue records of the local municipal corporation.
- Hi-Tech building- These buildings combine the use of smart devices to provide safety and comfort to the residents.
Conclusion:– These were some commonly used terms in the real estate market. We suggest you dedicate enough time and effort to researching a property before buying it. And, follow all the steps required for obtaining its ownership. We also insist you read the document thoroughly before signing. Moreover, if you lack the legal knowledge and skills in this regard, then it’s better to hire a lawyer.