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trying to buy a flat which is bought with bank loan
December 19 2009 , 10:11 PM   #1
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trying to buy a flat which is bought with bank loan

Hi,

I am trying to buy a flat in chennai. the owner has taken a loan from SBI and the docs are with the bank. how do i go about purchasing this flat? what are the risks involved and how can i safeguard my interest? I also want to know the legal charges involved. can someone through light?

thank you..
December 22 2009 , 06:44 PM   #2
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Quote:
Originally Posted by safachennai
hi,

I am trying to buy a flat in chennai. the owner has taken a loan from SBI and the docs are with the bank. how do i go about purchasing this flat? what are the risks involved and how can i safeguard my interest? I also want to know the legal charges involved. can someone through light?

thank you..

Well to start with SBI scrutinizes the documents thoroughly before they assess and clear the respective property for sanctioning a loan. So legally the property must be having a clear title. Thats one worry less. Also since this is a liability, you can try to negotiate hard with the seller and come to a cool deal which could be more of a bumper for you.
The process can be done in various ways, perhaps one would be to first approach the bank and get the documents checked once with a legal advisor just to be on the safer side. Once that is done, you can calculate the value of the property based on the loan taken. The loans sanctioned by the nationalised banks are calculated as follows. They take a survey of the property and make a note of the guideline value in the respective locality. Then they give you a maximum loan of 80% of what the property is worth (based on the guideline value). Most properties have a lower guideline value compared to the market value. But sometimes it varies from almost half, or in certain areas it is in par to the market value. You need to specify the area and get some survey done in the local market as well. Talk with some consultants depending on where the land is situated and get an approximate idea so as to what is the market value they are quoting.
Legally there wont be issues, in this process, but the Indian Govt. doesn't have any records or system that would actually show you whether a property/land is in a dispute in the court. There is no back-end from where you can refer and take details about the same. This is a risk involved not only in this particular transaction but in almost every property deal in the country, thanks to our Govt.
The best way to eliminate any such issues would always be to take a local survey in and around where the property is located. Communicate with the locals and they are the best people to suggest about any such issues.
Hope this helped. If there is anything further that you need to know, I will have to inquire with some legal advisors and get back to you.
December 28 2009 , 04:34 PM   #3
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Thank you very much for your response.
December 31 2009 , 12:55 PM   #4
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It is a risk free transaction indeed !

The bank already done the necessary legal proceedings so it is very safe to buy.

Just apply EC and check in the nearest registrar office for any land ceiling notice for this property.

Incase if you are going for a housing loan for buying that property the bank will do all necessary work so you are free from all these head ache in case if you are paying cash do the above
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