I seek your timely advice to go about the real life situation I am at right now.
We visited a property in Devanahalli, Bangalore & finalized a plot of 30x40 sizes in BIAAPA approved layout. Overall it seems that as the residential layout project has been approved by BIAAPA the docs are clear however great if you can confirm.
I have given some nominal amount of 51,000/- just to reserve the plot number we liked & asked about how to go about it. Developer has advised us as below….
· The base rate decided by government in this area is 1200/- per SFT which has been recently been revised that means we have to register the property with rate as 1200/- per SFT minimum.
· Selling value has been concluded as 1725/- per SFT & buyer has to pay me accordingly.
· He told us that the Sale DEED will be done with the rate of 700/- per SFT and he has clarified that this is to save on taxes for him.
· Bank loan is possible because developer has taken the approval from Axis Bank however it is restricted to market value of Bank’s technical evaluator which is 1600/- per SFT for the layout. That means 25% amount need to be arranged by you & also the registration cost as well.
· After the deal the developer will give a cheque to the buyer of the same amount as received from bank (75%) & then buyer will have to convert the cheque amount into cash to the developer. (Don’t understand why it is so & really worried)
Now with reference to the above scenario, I am eager to understand & know the problems with this deal. I understand that there is a catch & it seems that the deal is tricky however I need your help to understand to what extent & what to do to make this deal a success safely as we like the location & the plot very much.
I have few questions on the above….
1. Is that possible that the registration value decided by govt is more than the sale deed value? What is the catch?
2. On what basis home loan guys will fund the 75% amount? On the sale agreement?
3. If Sale agreement is the basis for Banks don’t they reconfirm with reference to the sale DEED the actual price of sale?
4. I am salaried individual and my total money is white? I don't want to have any black transaction in this to save tax because the difference in savings is only about 40,000/-. Now, as I don't want to lose this piece of land and for this If I agree to his proposals what problems I may face in future?
Also, pls advice on whatever issues you may feel is problematic & suggest me the solutions for the same.