Hello all:
I am staying in US and have never bought any flat/properties in India. Now I want to buy or book one flat in Mumbai for our end use when we return after few years. So I have some basic questions...
1) With builders, when you approah do you tell him upfront that you are NRI ?? Is so, is there any treatement or price diff for indian resi v/s NRI ??
2) What is best way to pay to builder in India ? Using NRE account checque ? (BTW, I am thinking to open one NRE saving with SBI so would that be good enough in terms of writing cheques?)
3) Do you need to have local contact in India to cordinate progress of constructions ? I mean while staying in US, how to keep paying cheque to builder when he demands at every progress (when you buy under const. property!!)
4) last, but not least, all our monies are in white so question is that do builder demands black money now a days ?? If so how to deal with it ?
Thanks in advance.....
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  • All your questions answered here:
    Reserve Bank of India
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  • Originally Posted by Taj123
    Hello all:
    I am staying in US and have never bought any flat/properties in India. Now I want to buy or book one flat in Mumbai for our end use when we return after few years. So I have some basic questions...
    1) With builders, when you approah do you tell him upfront that you are NRI ?? Is so, is there any treatement or price diff for indian resi v/s NRI ??
    2) What is best way to pay to builder in India ? Using NRE account checque ? (BTW, I am thinking to open one NRE saving with SBI so would that be good enough in terms of writing cheques?)
    3) Do you need to have local contact in India to cordinate progress of constructions ? I mean while staying in US, how to keep paying cheque to builder when he demands at every progress (when you buy under const. property!!)
    4) last, but not least, all our monies are in white so question is that do builder demands black money now a days ?? If so how to deal with it ?
    Thanks in advance.....


    Dear Taj123,

    Here are the answers to all your questions pointwise :

    1.With builders, when you approah do you tell him upfront that you are NRI ?? Is so, is there any treatement or price diff for indian resi v/s NRI ??
    A - There is absolutely NO DIFFERENCE in terms of pricing or terms and conditions between a Resident Indian and an NRI. A big/reputed builder would not charge you differently compared to a resident Indian but small time guys may take you for a ride incase you are not completely aware of the market norms.
    Just to make sure they dont take you for granted, once you can mention that you are an NRI after you have finalized the deal as that way they will not be able to argue with you on any matter.

    2) What is best way to pay to builder in India ? Using NRE account checque ? (BTW, I am thinking to open one NRE saving with SBI so would that be good enough in terms of writing cheques?)
    There are 2 ways of making payments to builder :
    i) Through NRE/NRO accounts : As mentioned by you, you can bring money into India into your NRE/NRO account and then make payments by issuing cheques from that account.
    ii) Direct Remittance to Builders : You can do a WIRE TRANSFER directly into builders account to save time and avoid hassles of couriering the cheques etc.

    I recommend opening both NRE and NRO accounts with a private bank like HDFC or maybe HSBC/Standard Chartered or Citibank as their online banking systems are far better than SBIs.

    3) Do you need to have local contact in India to cordinate progress of constructions ? I mean while staying in US, how to keep paying cheque to builder when he demands at every progress (when you buy under const. property!!)
    As you will not be present in India to complete all formalities yourself, you should appoint a close relative and authorize him LEGALLY and FORMALLY to be your representative (through a General Power of Attorney). Also for added convenience, you can also make the same relative the MANDATE HOLDER to operate your NRE / NRO accounts. THis way, that relative can sign all papers, issue cheques and accept and enter into agreements with the builder and banks (incase you are taking home loans) on your behalf which can save you lot of time, energy and money.

    4) last, but not least, all our monies are in white so question is that do builder demands black money now a days ?? If so how to deal with it ?
    None of the top brands would accept unaccounted money (or Black Money as its popularly called) if it is a direct sale from builder. Black money comes into picture only in RESALES (where another retail/individual investor like you sells it to someone/you etc). Hence when you are buying directly from a top brand, you will be required to pay completely in WHITE.
    Ofcourse there are medium to small time builders who would prefer Balck Money than being paid in white but being an NRI, its better to avoid such shady developers as there is no security for you in such cases.

    Hope this answers all your questions.

    Cheers.
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  • Jhashank RCA - Thank you for the detailed answers to the queries, it seems to be very useful :)
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