Plots & Lands Explained

Plots & Lands Explained

(What to know before Buying Land/Plot?)

Plots & Lands Explained

Urban Design on Plot / Land

Agricultural OR Non Agricultural OR Residential OR Commercial OR Industrial
All About Buying Plots / Lands in India –
Plots are preferred by individuals who prefer to make their own house and design it in their own
way. High net worth individuals or companies purchase land or plot for various purposes like
construction, setting up industries, setting up IT companies etc. Plot and Land purchases get
bank financing but they are very strict while doing so.

Checklist before buying the plots/ land-

Legal Rights of the owner:
You should ascertain that all the documents and paperwork regarding the plot or land is clear
and is in name of the person you are dealing with.
Ask for all the documents and check if the seller himself bears all the legal rights.

Check Land Zone (i.e. NA / A):

India being an agrarian country its maximum land is agricultural land unless demarked as
something else by the government i.e. non-agricultural (NA).
For using the land for any purpose other than agriculture it needs to be converted to NA. There
can be various types of NA lands-
 NA – Residential
 NA – Commercial
 NA – IT
 NA – Resort
 NA – Warehouses
Do not fall for traps!
Few misleading ways to sell non NA plots as NA are “NA plot, collector approved” and
“Proposed NA” where the owner suggests that NA is in process. You should make sure that
papers are already in process.
It is always suggestable to appoint an experienced broker who can help you get everything
checked and approved so that you are not cheated.

FSI for Plot/Land:
FSI or Floor space index indicates the amount of construction that can be done on a particular
area of land.
Example – FSI = 1 indicates you can for every 1000 sqft area of land you can construct upto
1000 sqft., FSI = 0.4 indicates for every 1000 sqft area of land you can construct upto 400 sqft
and so on.
FSI is very important because a plot will more FSI would allow more construction and hence is
more valuable. FSI of agricultural land is very less which is 0.04 (4%) in Maharashtra.

Sale Deed for plot / Land:
Sale Deed is document that needs to be registered in presence of sub registrar after payment of
stamp duty and registration charges. Only after the sale deed you become the legal owner of
the land.

7/12 extracts and mutation:
Government collects all land records as 7/12 extracts of past 30 years. &/12 extracts are very
crucial and efficient in determining the true ownership of the plot or land. Hence you should
always ask for 7/12 extracts copy for any land you are wish to purchase. Even ensure that your
name is mutated in these 7/12 extract records after the sale is executed.

General Tips to consider before buying land/plot:

 Check online about plot details-
i) Always make sure to check on the online website of the state where the plot or land
details are mentioned. (In Maharashtra website is mahabhulekh)
ii) The website bears all the updated details of the plot owner, plot 7/12 extracts, plot
past owner, plot zone etc.
iii) If it is a builder scheme, then you can even possibly find customer review which can
be helpful.
iv) Usually if you have a real estate agent he will help you get all the relevant
information about these.
 Make many visits to the plot –
i) Visit the plot location a few times without informing and see if the status as it is when
you are having an informed visit.
ii) Ask about the plot to different people in the vicinity and make some background
about it. You might sometimes figure out something that you have not been told
iii) Try to visit nearby locality and understand about safety and the vicinity and people.
 Check for Nearby Development and Infrastructure Yourself-
i) Just don’t believe everything that the seller tells you blindly.
ii) Make some search on your part into government plans and future developments that
are proposed in the vicinity and the ongoing development.
iii) It is not very easy for an individual to find out all these details hence it is suggested
to always have a broker who can get you all the relevant information about the same.
 Negotiate for the BEST price-
i) Usually in plots and lands quoted price is never the final selling price.
ii) There is approximately 5-10 percent margin to bargain and it depends on your or
your broker’s proficiency on how much negotiation can you land with.
iii) Negotiating for plots is a real skill and goes on for a few days. It needs some level of
experience to master the skill.

 Be Patient!
i) The key to buying a plot or land in a reasonable price is patience.
ii) Do no fall for traps like Seasonal Pricing, Mega Launch etc. It never is best idea to
fall for them.
iii) If you wait and negotiate well you will be able to crack a very reasonable pricing.
Plots and lands provide higher appreciation over a period of time compared to other real estate
investment. But dealing in land is associated with lot of legal processes, taxation related to
lands and background checks to be made and hence you should involve a property broker. So
that your investment is secure and safe.

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