You may be wondering about the necessary closing documents for buyers during the process of buying a home or how long should you keep real estate documents. The answer is quite simple- you should have these 5 real estate documents handy at all times without fail.
5 Real Estate Documents Worth Keeping and Why
1.Sale Deed
The sale deed is the most important document that you have to keep in hand. This is the legal document which contains details about the transfer of title, right and ownership of any property to the buyer by the seller at the price which is either paid fully or will be paid in installments at a later time. The execution of the sale deed takes place after the Agreement to Sale is entered into by both parties. This should be executed prior to the sale deed in order to flesh out the terms and conditions for sale that have been mutually agreed. The sale transaction amount, namely sale consideration, is paid at the time of registration of the sale deed. The title should be free from encumbrances and statutory payments like property taxes, water bills and electricity bills should also have been made.
Why you should keep it:
- The sale deed is the proof of ownership.
- It contains full details about the buyer and full description of property to be transferred, details of loan settlement, sale amount and advance payment with date.
- The liability of buyer and seller are stated clearly in the sale deed upon non-fulfillment of the agreement terms.
- Sale deed also mentions the date when possession of property with full title will take place upon paying the final amount or fulfilling any particular condition.
- The sale deed has to be registered and both parties have to be at the jurisdictional sub-registrar’s office within four months of the execution of the same. Stamp duty is paid by the buyer and the registered copy of the sale deed will be provided to the purchaser accordingly. Post registration, the purchaser gets all original documents of the property.
2. Trailing Sale Chain Deed
This works in case of properties which are ready to move and listed in the resale market as well. This is the entire chain of deals or transactions in terms of sales that a property has been through.
Why you should keep it:
- The original sale deed is needed from previous owners of the property and this document helps in tracking ownership.
- It helps you stay alert about missing documents since properties which have all original documents and a clear ownership trail can be naturally traced.
- The chain of earlier agreements with previous owners and the original registration receipts and original letter of allotment to the very first owner by the authorities are highly essential documents that help in creating the trailing sale chain deed.
3. Mutation
Mutation of property is highly essential as you may already know. Mutation of property indicates that a property has been transferred to another person and also helps authorities in fixing on the responsibilities of taxpayers. Documents to be submitted for mutation include a sale deed copy, application with Rs. 3 court fee stamp fixed on it, indemnity bond, property tax clearance receipts and affidavit on Rs. 10 stamp paper.
Why you should keep it:
- This is crucial if you wish to sell the property in the future.
- It helps fixing liabilities for property tax payments and directly shows transfer of property from one person to another.
- Mutation documents also work as tax records although they are not legally imperative.
4. Builder NOC
The Builder NOC is a vital document in case you are looking to directly transfer under-construction property. The builder NOC comes in a regular format and this is also called Resale NOC at times. Accordingly, tri-party or bi-party agreements can be made, depending upon the situation.
Why you should keep it:
- The Builder NOC will include buyer details like the PAN Card details, address, name and so on.
- This is a handy document for obtaining the home loan and also final possession.
- Make sure that the NOC is verified for authenticity and check with the builder accordingly.
- It should be signed by the key person in the builder’s company or authorized representatives.
- The NOC should be the latest one so that builders do not provide multiple NOCs to multiple buyers simultaneously.
- It is an essential document which indicates property transfer to the buyer.
5. Payment Receipts
The payment receipts throughout the entire sale process are highly important. You should always collect the original payment receipts from your developer in case you are purchasing a new home. In case you are purchasing a resale property, you should insist on the copy of receipts from the seller to be provided to the financial institution.
Why you should keep it:
- These receipts are proof of you having paid money in advance and periodically to the developer and of his/her having received the same.
- These receipts also indicate the amount that has been paid and the sum which is left and acts as proof of payment at all times.
These are the 5 vital real estate documents that you should always keep with yourself in order to avoid several hassles down the line. Make sure that these are handy and neatly arranged for instant reference.
