Buy Sell Agreement (Including Earnest Money Receipt: Fill & Download for Free

Want to start flipping houses but just don't know where to start? Do you need to set up a business? What type? What type of house flipping should you start with? What if you don't have much money?There are a million questions that can be asked. There's so much information out there and it's hard to know which is the right way to go and who to trust. I'm going to cut through all of the confusion and show you how to get started in a step-by-step way. This is based on my experience and is my recommended path to getting the ball rolling.Step 1: Know Where You Want To GoWe shouldn't just jump in our car and speed away without knowing where we are going. That's crazy and a complete waste of time and money. We've got to figure out our destination first.In my opinion, this is the single most important step in this process. You have to know your destination. It needs to be very clear and definite in your mind. An end goal of 'getting rich' is too general and not definite enough to allow you to envision where you want to be. We need to figure out exactly what we want and how we want our lives to be so that we have a clear vision of what it is we are trying to achieve.Would you like to be able to take your family on vacations whenever you want and for as long as you want? Do you want to be able to earn profits instead of wages so that you can do this full-time and be in control of what you are doing and when? Do you want to be able to achieve all that you feel you are meant to achieve without waiting for someone to give you the opportunity? In order to do these things, we have to lay them out as specific goals.You can take 'getting rich' and ask the right questions to figure out what you really want and why you want to flip houses. We could ask WHY we want to be rich. What would being rich do for us? What kind of things would you do if you were rich? What would your average day be like if you were rich? Answer these questions and write down your answers. Something about writing things down helps you to fully realize and remember your answers. Better yet, start a vision board.Figure out what your true dreams are and try to make them as specific and clear as possible. Try to have concrete goals that you can work towards. Narrow your focus.Step 2: Get Educated (don't overdo it)Now that we know our destination, we still shouldn't just jump in that car and peel out into the distance. That might be funny, but it would not be funny for very long. Especially when you find yourself lost and frustrated.We need to get educated so that we know the best way to get to our destination. We need to study the roads and figure out not only the shortest path, but the path with the least amount of traffic jams. The traffic jams in house flipping are the things that slow us down and make it more difficult for us to get to where we want to be. This can be things like having a ton of over-leveraged rental properties with non-paying tenants that are trashing the place and causing you to bleed money at a staggering pace.You've probably already started your house flipping education. Well, I know you have because you are here reading this. At least you are in the right place! That's a great start. That shows me you already know what you are doing so far.What do you need to learn and where can you learn it?In order to figure out what you need to learn, we need to figure out which house flipping strategy to focus on.Focus Your Energy On One StrategyThere are a lot of strategies out there. I've seen some really crazy and down right dangerous ones. Most typically just sound great and look good on paper but are super risky in reality. When you add the human factor to a lot of these strategies (tenants that don't pay and completely trash your house, unscrupulous investors and sellers, unforeseen costs and repairs, lawsuits, and list goes on and on), they are just not a good way to go. You have to get back to the basics. To the tried and true things that have been working for a long time for a lot of investors.My Recommended Starting Strategies (and I still use them myself)Starting with birddogging and wholesaling is the easiest way to get into flipping houses without much risk and with little to no money. These are the strategies that I feel you should focus on. I call these the strategies with the lowest entry costs in terms of time, money and experience.Give yourself a better chance of really making it by laser focusing on these two methods. Heck, just focus on one if you want. The great thing is that both of these can be learned quickly and interchanged for each deal as you see fit.BirddoggingA birddog is someone that finds "leads" and gives these leads to an experienced investor to work.Here's how to do it:You drive around and find vacant houses and send letters to the owners of the vacant houses. One of the owners calls you and tells you they are interested in selling the house.You then tell another investor that has the ability to act quickly about the lead and he/she sets an appointment to see the house and makes an offer to the owner.If they come to an agreement and the investor ends up buying the house, he/she will pay you a finder's fee. This fee can be as much as $2,000 or more.I typically ask for $1,000 to $2,000 depending on how much potential I feel the deal has. I think most investors probably pay closer to $500 each if the leads are screened as well as I screen mine.What I mean by screening is just that I make sure the potential for a deal is really there. That the sellers have enough equity in the home and there are signs of motivation to sell.Some investors will pay small fees just for the lead (just giving the lead, whether they buy the house or not). Don't expect very much if this is the case (probably between $25-$50).WholesalingWholesaling is where you actually contract to buy a house and sell it 'as-is' to another investor.There are several ways to wholesale, but in the spirit of having you narrow your focus, I'm going to be discussing the assignment of contract alone. This is the strategy that involves the least risk and very little money. This is where you never take ownership of the house.Here's how to do it:So, if you find a deal where the house should sell for $100,000 and it needs $10,000 in repairs, you would want to buy it for $60,000 LESS THE AMOUNT YOU WANT TO CHARGE FOR THE ASSIGNMENT. If you want to be paid $5,000 for the assignment, simply buy it for $55,000 and offer it to an investor buyer for $60,000.Estimating repairs can be difficult in the beginning. At first, I sure was clueless when it came to what repairs cost. The best thing you can do is find a contractor (preferably one that has worked for house flippers) that can help you with the basic costs of normal repairs. Just sit down and make a list of normal repairs and what they typically cost. Some of the items can be priced based on square foot or linear feet.Market for leads (you'll find out more about this further down in this article).Start taking calls and analyzing the leads. Most investor buyers are looking to purchase investment property at 70% of market value minus the cost to repair the property.The key with estimating repairs is that you will never get it the cost correct to the dollar. You are just trying to get a good estimate. Be conservative in your estimate.When you find what seems to be a deal that could work based on your analysis, you make the offer. If the seller accepts, you will sign a purchase and sale agreement (contract) with the seller that spells out the terms of the agreement. Most people use their own state approved contract for real estate transactions. I actually prefer a single page contract of my own that is straight and to the point. Most of the state contracts are full of CYA stuff for Realtors and tend to be 9 pages or longer. Talk about taking forever to get the contract signed! I don't enjoy explaining TIDE WATERS and other gobbledy-gook to sellers for several hours.It's important to make sure that your contract has 'and/or Assigns' after the buyer name so that you can assign the contract.For the buyer name, you will use your name unless you've set up a DBA or company (read more about that below).In the beginning, it's best to have an escape clause. This is where you have a statement in the contract that allows you to back out if you are unable to find a buyer for it. The clause should be simple and could be something like, "This agreement is subject to further inspection of the property by the buyer."If the contract you are using has a section for a termination option, you can use that. This is typically used by buyers to pay a certain amount to be able to terminate the deal if they are not happy with the inspection or other aspect of the deal within an agreed upon amount of time.Once you have the house contracted, you take it to a title company and have it receipted. This is where you pay the earnest money you agreed to with the seller (I typically only pay $10 or $25 for earnest money. It's not a big deal unless you make it seem like a big deal (remember that).Contact your buyers and let them know about the deal. You will end up finding out who the serious buyers are by doing this. You really only want to work with buyers that take action quickly and let you know whether they want the deal or not. Don't waste your time with people that ask a million questions, like whether the bathroom toilet needs to be replaced. You are selling at a deep discount so those matters are irrelevant. Don't waste your time with these people.After a while you will develop a short list of 'go-to' people that you can call and tell about the property. It's best to try and give them 12-24 hours each to see if they want the deal (one at a time of course). If they know there will be a lot of competition, they may not want to waste their time. If they know they have first dibs, they will be more than willing to check it out.Once you've found your ready, willing and able buyer (must be able to close by the date you specified in your contract with the seller), you will sign an assignment of contract form with them. This is just a single page contract (you can download a copy of mine here: Flipping Houses Resources Page.This assignment contract will then be taken to the same title company where you receipted the purchase contract.You could get a non-refundable deposit from the buyer to help ensure that they are serious. Good buyers will not hesitate to do this if it is a good deal. Non-refundable deposits can be as much as you want, but are typically $1,000-$2,000.When the deal closes, the title company will cut you a check for your assignment fee. Congratulations! You've just made several thousand dollars without even owning the house.There is an alternative way to do this. This involves finding investor buyers and figuring out what types of deals they want and marketing and directing your efforts to find those types of deals. This way you can find exactly what they want so that you already have a ready and willing buyer. These investors might also help you analyze each deal so that you are buying at a price that makes sense for them (and of course you get the house for a little cheaper so as to cover your assignment fee! You do want to make some money for your efforts, don't you?)There's no wrong or right way to go about it. It's really up to you as to which one fits better for you. You can try one method and then switch to the other or work at doing both at the same time. Your choice.This doesn't cover every possibility, but it's a great introduction and good starting point for you to know what you need to learn about the process.Stay focused my friend.What if you stand to make a HUGE assignment fee?Good for you. If your end buyer doesn't like it, find another buyer. You are the one with the deal. If it's a problem for them that you stand to make a lot of money for simply assigning the deal, tell them tough cookies. That's the way it's going to be. Simple as that.Why I Don't Recommend Rentals and Rehabbing - IN THE BEGINNINGRentalsSome people want to start out by picking up rentals. The reason why I don't recommend that is because you should really have a certain level of cash reserves in case your places get trashed and go vacant, or tenants just stop paying and you have to spend a lot of time and money just getting them out. Rentals don't generate the kind of quick cash that wholesaling and birddogging can.RehabbingRehabbing is another one that I feel is better to start after gaining experience in wholesaling. This way you get a lot of experience in determining what the right prices are to buy the properties and in determining the repair costs, holding costs, selling costs and any other costs involved when rehabbing houses. There's a lot more risk when rehabbing. If you start by wholesaling you might even end up developing a relationship with a local rehabber that can then help you to make the transition to rehabbing.Stay FocusedDon't keep buying course after course trying to find that new secret way to do this easily. It doesn't exist and you are just putting off getting out of your comfort zone. Focus on one strategy, learn as much as you can about it and start taking action to gain experience and make a real go at it. Doing this will separate you from 95-99% of other people.Where To LearnHere, of course, is the best place. I'm only slightly biased. But, you should also spend some time on the incredible forums over at Bigger Pockets and REIClub. These are great places to really fill in a lot of the gaps. I wanted to talk about figuring out where to start first, because when you spend time on the forums you will tend to get pulled in a lot of directions. You have to go in with a specific question to get answered. Search for answers to your specific questions and TRY NOT TO GET SIDE-TRACKED.People tend to get side-tracked easily because it's easier (MORE COMFORTABLE) to just keep learning other things than to actually TAKE ACTION. Don't fall into that trap. Stay focused.Incidentally, the NUMBER ONE place to learn is on the streets. You will learn more hands down by taking action and finding out what you need to know. You don't have to know everything about a topic to get started. You should educate yourself on the basics and GET STARTED.Taking action will put you out of your comfort zone. It will be uncomfortable, but only in the beginning.Step 3: Start MarketingYou've got to find deals and you need to find buyers to buy those deals.I'm a firm believer that it is much easier to find awesome deals by targeting motivated sellers. You aren't looking for the right houses as much as you are really looking for the right sellers.A lot of new people think the only way to start is to find a real estate agent and have them find listed deals for them. There's simply too much competition and the deals tend to be too slim. It's possible to work it this way, but why when it is much easier dealing directly with motivated homeowners.Marketing For BuyersIt would benefit you to start immediately looking for cash investors. These are the people that you will try to sell your leads and/or deals to. Typically, rehabbers (people that fix up the houses and sell them) and landlords are going to be the people you want to find. These are the ones that are always looking for fixer upper houses, the kind you will be finding.Other wholesalers can also be great people to network with. If you are having trouble moving one of your deals, you can see if they've got a buyer that would be interested. You would work out a split of the profits with the wholesaler if they do find a buyer for your deal.Here are some excellent places and ways to find buyers:Local Real Estate Investor Association (REIA) meetingsCalling 'we buy houses' advertisers (call numbers on bandit signs, yellow pages, online, etc)Marketing your deals - you do want to market your wholesale deals (bandit signs, newspaper ads, craigslist ads, etc)Have a Realtor look up investment properties that were sold recently and find who bought themCalling 'For Rent' signsDriving neighborhoods where you want to invest and looking for houses being rehabbedMarketing For SellersTo find deals, I recommend marketing directly to motivated sellers. This is the 'We Buy Houses' type of advertising. You are trying to find people that have a house they need to sell. This does not just mean people facing foreclosure, which is what most people immediately think of when talking about motivated sellers.There are a lot of other reasons that people will sell their house at deep discounts. These reasons could include (and are certainly not limited to):House needs a lot of repairs the owner cannot afford to makePerson inherits a house and would rather have cashLandlord is sick and tired of dealing with their rental propertyOwner needs to relocate and sell their house fastDivorce situation where the single owner cannot afford the houseOwner just doesn't want the hassle of selling their house the conventional wayI could list the techniques on how to do this marketing, but a much better way would be to show you what I do and how I do it. And, in case you didn't already know, I've blogged about 34 weeks of all the marketing I did and the leads that came in. Be sure to check out the first and second weeks on my blog where I show my marketing.Step 4: Start Building Your TeamAs you start to find and work deals, you will find it necessary to have good people on your team. These are not employees. Rather, they are people like a great closer (title company), real estate attorney, contractor (to help determine repair costs), accountant (hopefully you will need this as it means you are making money!), and a real estate agent (some are worth their weight in gold).

Checklist of Property documents is very crucial step of property purchase process. Property transaction in India is document intensive exercise because of complex legal, statutory and regulatory framework. Based on queries received from my clients, i can conclude that approx 80% buyers don’t get complete property documents at the time of purchase. These buyers struggle at the time of sale of property. Another problem linked to property documents is that buyer or a seller is not aware why specific property document is required, whether it is required in original or not etc. To help readers of my blog, i have created a comprehensive checklist of property documents. I will keep updating this property documents list as and when required. Also i would like to add that some states in India require additional property documents which vary from case to case basis.1. Sale Deed/Title deed /Mother deed/Conveyance DeedDescription of Property Document: A sale deed acts as the main legal property document for evidencing sale and transfer of ownership of property in favor of the buyer, from the seller. Further, it also acts as the main property document for further sale by the buyer as it establishes his proof of ownership on the property.Normally sale deed is executed after execution of sale agreement. Sale deed confirm that terms and conditions detailed in the sale agreement as agreed upon between the buyer and the seller are complied. It is mandatory to register the Sale Deed in Sub Registrar office in whose jurisdiction property is located. It is mandatory to register sale deed within 4 months from the date of execution else you need to pay penalty or it stands invalid.Why it is required: To establish the ownership of seller on title of propertyMandatory: Yes. All previous Sale Deeds are required in originalRequired in Original: YesRequired For: Property Purchase + Home Loan2. RTC ExtractsDescription of Property Document: R.T.C is issued by the Village Accountant. It contains details of the extent of land in a survey number or a sub-survey number, the extent of kharab land therein, the names of the present and previous owners, their respective holdings and names of the tenants. It also include details like the kind of soil/crop, any mortgages, charges made on the properties contained therein, the status of land (whether Inam land or not), the conversion order number, date in case any property converted therein from agricultural to non-agricultural use, the references to mutation and inheritance certificates where there is any change in ownership etc.Why it is required: To establish the Title of Land, if the property is located on converted land e.g. converted from agricultural to non-agricultural useMandatory: NoRequired in Original: NoRequired For: Property Purchase3. Katha Certificate and ExtractsDescription of Property Document: Khata means an account and Khata is an account of a person who has property in the city. There are two types of Khata: Khata Certificate and Khata Extract. In different states it is known by different names. It is basically an entry in record of local municipal committee and indirectly confirms that apartment is constructed as per approved plan.Khata certificate is required for two reasons: For registration of a new property and for transfer of any property. Khata can be obtained from the Assistant Revenue officer (of the respective area). This certificate is must have for any property owner.Khata Certificate is obtained for any new registration after paying the tax. Khata certificate is issued stating that a particular property No ‘N” is in the name of person X. This certificate is required to apply for water connection, electricity connection, trade license and building license. The Khata certificate is given only to the owner of the property or to his family members. No one else can take it on his behalf.Khata Extract is seeking details from the assessment register. The extract is required to get trade license, or to buy a particular property. It is an extract from the assessment register about any particular property. It has the details of the property in a particular format with the name, size of the property, use of the property (commercial purpose, residential), annual value, when assessed last. An extract is the only way to get these details of any property.Why it is required: For transfer of propertyMandatory: YesRequired in Original: YesRequired For: Property Purchase + Home Loan4. Mutation Register ExtractsDescription of Property Document: Mutation Extract issued by the Village Accountant or Tahsildar contains the extract from the mutation register or inheritance certificate with details of previous owner, the present owner, the mode of acquisition of the property, the total extent of the property and the order stating that the Khatha of the property may be transferred to the name of the present owner.Why it is required: To establish the Title of Land if the property is located on converted land e.g. converted from agricultural to non-agricultural useMandatory: NoRequired in Original: NoRequired For: Property Purchase5. Joint Development AgreementDescription of Property Document: An individual landowner and a builder may enter into a JDA. The key feature of a JDA is that the landowner will contribute land and the builder will undertake development activity on it. Depending upon the land price, the joint development ratio is decided among the parties. In most of the cases, the builder will agree to allot X no of flats to the landowner and there is no exchange of money between landowner & builder. In consideration of this, the landowner will part with his share of land in favor of the builder or his nominee. He also allow the builder to construct apartment on his land and sell the agreed number of flats.Why it is required: To establish whether original title of property rests with the Builder or with LandownerMandatory: YesRequired in Original: NoRequired For: Property Purchase6. General Power of AttorneyDescription of Property Document: A “power of attorney” is a legal instrument whereby one person gives another person the authority to act on his or her behalf as his legal representative and to make lawful binding legal and financial decisions on his behalf including Sale or Purchase of Property on Buyer or Seller’s behalf.Why it is required: To establish whether the previous Sale or Purchase was carried out by authorized person on Seller or Buyers behalfMandatory: Yes (If any of previous Sale/Purchase were executed through GPA)Required in Original: YesRequired For: Property Purchase + Home Loan7. Building plan sanctioned by the Statutory AuthorityDescription of Property Document: The building plan approval process relates to the issue of permission for the construction of buildings based on specific set of rules and regulations.Why it is required: To establish whether the property is authorized or unauthorizedMandatory: YesRequired in Original: NoRequired For: Property Purchase8. NOC from Electricity Deptt/Pollution Control Board/Water Works/ Air Port AuthorityDescription of Property Document: Before starting the construction, builder requires NOC from all key Govt Departments. In some states NOC from at least 19 departments are required ranging from Pollution Control Board to Fire & Safety etc. For example If builder does not get NOC from Electricity Deptt then in all probability, buyer will not get electricity connection thus 100% dependency on generators. It will increase maintenance bill drastically.Why it is required: To ensure Govt approvals are in placeMandatory: YesRequired in Original: NoRequired For: Property Purchase9. Supplementary agreement / Ratification Deed (if any)Description of Property Document: Supplementary agreement captures any extension, change or modification in certain clauses of Principal Agreement. Many a times changes are required in principal agreement and only way to execute the same is through Supplementary agreement. Just check whether any supplementary agreement is executed against Principal agreement.Why it is required: To avoid any future shock on modified clauses which you might not be aware of & is not included in property documents.Mandatory: YesRequired in Original: NoRequired For: Property Purchase10. Allotment Letter from the Builder/Co-Operative Society/Housing Board/BDA.Description of Property Document: While availing Bank Loan to buy a property, Builder/Housing Society issues an Allotment Letter to the buyer which contain details like description of the said property being sold/bought by the two parties. It also mentions the amount of money which buyer has paid to the builder/housing society so that remaining amount can be financed by the bank.On the basis of this Allotment Letter, banks finance the balance amount.As such the Allotment Letter also gives all the pertinent details of the Property being bought/sold and also detailed specifications of the Project.Agreement of Sale is documented on a Stamp Paper whereas Allotment Letter is issued on Letter Head of concerned authority.Allotment letter is only issued to 1st owner by builder and subsequent owners can demand copy of original allotment letter from previous ownerWhy it is required: For Description of Property & Project specification by Builder or Housing SocietyMandatory: YesRequired in Original: YesRequired For: Property Purchase + Home Loan11. Sale Agreement between Builder and 1st OwnerDescription of Property Document: It is very imp property document. The Sale Agreement must contain the liability of the Promoter/Builder to construct the building according to the plans and specifications approved by the local authority. It should also contain tentative possession date, price to be paid by the purchaser and the intervals at which the installments towards the full payment are to be made specifying the stage of construction. It also contain details like the precise nature of the body to be constituted of the persons who would take the flats i.e. association, details regarding the common areas and facilities. It specify the percentage of undivided interest in the common areas and facilities pertaining to the apartment agreed to be sold & a statement of the use for which the apartment is intended.Why it is required: As mentioned in DescriptionMandatory: YesRequired in Original: YesRequired For: Property Purchase + Home Loan12. Construction Agreement between Builder & 1st OwnerDescription of Property Document: The construction agreement is another imp property document. It is essentially a works contract. In other words, it’s an agreement in writing for the execution of the work relating to the construction of the apartment and it also involves the transfer or sale of the goods involved in the execution of the contract. The nature of this contract is such that a person undertakes to execute work by incorporating various items, things and goods in such work. When completed, these items along with the executed work are owned by the person for whom the work has been executed.Why it is required: As mentioned in DescriptionMandatory: YesRequired in Original: YesRequired For: Property Purchase + Home Loan13. Copy of possession letter from the builderDescription of Property Document: It ensures that possession of the said building is being delivered to the purchaser on the effective date specified in the letter.Why it is required: As mentioned in DescriptionMandatory: Yes (In case of 1st Purchase i.e. from Builder)Required in Original: YesRequired For: Property Purchase + Home Loan14. Payment receipts paid towards the builderDescription of Property Document: Don’t forget to collect original Payment receipts from builder. In case of resale, you can collect payment receipts issued by builder to 1st owner.Why it is required: As mentioned in DescriptionMandatory: YesRequired in Original: YesRequired For: Property Purchase + Home Loan (In case of 1st Purchase i.e. from Builder)15. If any loan on the property (Current or past) / Original Property Documents with BankDescription of Property Document:a. List of original property documents with sellers Home Loan provider.b. Closure letter with penalty (if any).c. If the loan is closed then copy of closure letter / NOC issued by the concerned bank.Why it is required: To ascertain that property is not mortgagedMandatory: YesRequired in Original: YesRequired For: Property Purchase + Home Loan16. Sale agreement with the SellerDescription of Property Document: Sale agreement is executed between the parties for dealing with the property. Sale Agreement creates a right to obtain a sale deed mentioning the property. Normally it fixes a time for completion, payment of earnest money or part payment of purchase consideration. Generally it’s a property document that precedes a sale deed and in such cases does not require registration. Sale Agreement will not confer any charge or right on the property. However in some states the sale agreement is registered and will act as a sale deed. For Home Loan purpose, it is mandatory to pay stamp duty equal to 0.10% of Sale Agreement value.Why it is required: To fix terms and conditions for saleMandatory: YesRequired in Original: YesRequired For: Property Purchase + Home Loan17. Latest Tax Paid Receipt till Date of Registration (Property Tax/Municipal Tax etc)Description of Property Document: It shows property details i.e. area, owners name & other imp details related to property. For income tax purposes in India, property is considered as a source of income and hence, tax is levied on that. Property usually mean real estate including any building, flat, shop etc. as well as the land appurtenant to the building. Under the Income Tax Act, incomes from the properties are regarded as one of the heads of income. The amount of tax is calculated on the value of the property being taxed. Local municipality authority that levies property tax for the maintenance of basic civic services in the city. Unlike UK where the occupier is liable to pay the property tax, it is the liability of the property owner to pay the property tax India to the concerned municipalities.Why it is required: As mentioned in descriptionMandatory: YesRequired in Original: YesRequired For: Property Purchase + Home Loan18. EC up to date for latest 13 years or from the date of registration till dateDescription of Property Document: One of the most crucial property document. You can get Encumbrance Certificate from the sub registrar’s office. This office is directly under control of the Inspector of Registration of Properties, operated by the state government. The certificate shows that in a given period of time from when the property was bought/sold has there been any transaction or mortgaging. Buyers/sellers ask for this certificate when a new transfer (sale) is taking place, so that the buyer knows detail of all property transactions till date.Depending on type of transaction, the certificate is issued in two different forms. Form 15, will have details of transactions during the period of registration in the name of the owner. A person will get a ‘nil encumbrance certificate when no transaction has taken place. this certificate would appear on Form 16.The encumbrance certificate confirm that the property is still in the name of the person who is selling it.Why it is required: To establish ownership of seller on the title of the propertyMandatory: YesRequired in Original: YesRequired For: Property Purchase + Home Loan19. Demand Letter from the vendor before disbursementDescription of Property Document: Demand letter is issued by builder to 1st owner, demanding payment due as per schedule agreed between builder & 1st owner.Why it is required: As mentioned in descriptionMandatory: Yes (For 1st Purchase)Required in Original: YesRequired For: Property Purchase + Home Loan20. Own contribution receipt along with the bank statementDescription of Property Document: It is required by the institution i.e. bank or HFC which is providing loan for the property to ascertain that buyer has pooled & paid his own contribution to the seller.Why it is required: For availing Home Loan it is mandatory for purchaser to contribute 20% of Purchase Value from his own sources and bank only approve loan upto 80 % of the purchase valueMandatory: YesRequired in Original: NoRequired For: Home Loan21. NOC from the Society/Building association.Description of Property Document: An upto-date no objection certificate from the apartment’s owners association. It should clearly mention that Association does not have any objection on ownership transferWhy it is required: To avoid any future objection by apartment associationMandatory: YesRequired in Original: YesRequired For: Property Purchase + Home Loan22. No-due certificate from the building association.An upto-date no dues certificate from the apartments owners association is required.Further a certificate from the Association that no charge of any Bank or financial institution is recorded with them with respect to the apartment.Yet another certificate from the Apartment Owners Association that they are custodians of all the Original documents and approvals of the entire property is a MUST.Why it is required: To ensure owner has cleared all the dues & association is custodian of all original documentsMandatory: YesRequired in Original: YesRequired For: Property Purchase + Home Loan23. Approved plan of construction/extension & license for construction.Description of Property Document: Before starting the construction, Builder obtain approval from local development authority for construction.Why it is required: To ensure building has approval in place for constructionMandatory: Yes (For 1st purchase from builder)Required in Original: NoRequired For: Property Purchase + Home Loan24. Detailed cost estimate/valuation report from Chartered Engineer/Architect (if applicable)Description of Property Document: Before approving loan, Bank carry out property valuation e.g. if you have applied for loan of 80% for property worth 60 Lacs & valuation report of bank estimate property value as 50 Lac then bank will only fund 80% of 50 Lac.Why it is required: To fix loan eligibility based on property valuationMandatory: No (Normally its bank’s internal document)Required in Original: NoRequired For: Home Loan25. Conversion order/Betterment Charges paid receipt.Description of Property Document: Generally the land pockets available are agricultural in nature, as the major occupation is agriculture and the Government has taken various measures to secure & preserve it. The general use of all such lands is agriculture and if it has to be used for any other purpose other then agriculture, the property owner must obtain legal permission from the competent authority by following defined procedures.Conversion is a legal process by which the property owner changes the use of the land from agriculture to non agriculture purpose. It is also called CHANGE OF LAND USE / DC Certificate. The legal sanction/ conversion/ order/grant/permission is necessary to use the land for any other purposeWhy it is required: For converted landsMandatory: YesRequired in Original: NoRequired For: Property Purchase + Home Loan26. Sanctioned Layout Approval planDescription of Property Document: The layout plan should be approved by the local development authority. In the absence of this you could face Khata transfer and plan sanction problems. The development authority has a right to demolish the apartment and restore the land to status quo ante if layout approval plan is not in place. The title of the site itself can be fairly safe (if property documents are clear) but the development/construction activity can be unauthorized.Why it is required: As mentioned in DescriptionMandatory: YesRequired in Original: NoRequired For: Property Purchase + Home Loan27. Auction Sale confirmation letter from Local Development AuthorityDescription of Property Document: If any site/land is purchased by builder or by independent house owner by ways of Auction by Local development authority then this letter is definitely requiredWhy it is required: As mentioned in DescriptionMandatory: Yes (As applicable)Required in Original: NoRequired For: Property Purchase + Home Loan28. Release deed (If applicable)Description of Property Document: Release Deed is executed to Release rights whereby a person renounces a claim upon other person or property. If you are purchasing a property, which might have been inherited by seller or was part of settlement between legal heirs of original owner then definitely you will come across release deed. It is very imp property document.Why it is required: As mentioned in DescriptionMandatory: Yes (As applicable)Required in Original: YesRequired For: Property Purchase29. Completion CertificateDescription of Property Document: This certificate is issued by Municipal Authorities showing whether the building complies with the rules related to permissible building height, distance from road etc. whether it is built according to approved plan and is ready for habitation.Why it is required: To ensure building is constructed as per approved planMandatory: YesRequired in Original: NoRequired For: Property Purchase + Home Loan (Mandatory for 1st Purchase)30. Occupancy CertificateDescription of Property Document: The occupancy certificate is issued after construction is completed. Once the builder applies for the certificate, an inspection is done again to confirm if the construction is completed as per sanctioned plan. This certificate is mandatory for any builder before he allows people to take possession of the property.Why it is required: To ensure flat is ready for occupancy and construction is completed as per sanctioned planMandatory: YesRequired in Original: NoRequired For: Property Purchase + Home Loan (Mandatory for 1st Purchase)31. Loan/Charge/Mortgage by the Builder:Description of Property Document: If the Builder or the Land Owner has created a charge in favour of any Bank or Financial Institution, a NO OBJECTION LETTER from the institution is required. NO OBJECTION letter should clearly mention the property details, the name of the borrower, the borrower’s account number, the apartment, floor, area, car park etc. and shall be addressed to the Purchaser. The original letter should be in the safe custody of the Purchaser. If in “No Objection letter” if it is mentioned that all the payments by the Purchaser shall be through the financial institution, the same should be complied.If the Builder states that they have not availed any loan or have not created any charge on the property, the same shall be stated in definite words in the agreement/s to be entered into with the Developer. There should be clause that “all original documents, deeds and approvals are held by the Developer in their safe custody and that the Developer shall continue to hold the same in their safe custody in trust for all the purchasers of apartments, and shall never part with the Originals and that as soon as the Association of Apartment Owners is formed. All the Original documents, Deeds and approvals will be handed over to the Association.” This shall be over and above a declaration in the agreement/s by the Land owner and the Developer that the property is free from all encumbrances.Why it is required: To ascertain property is not mortgaged by the BuilderMandatory: YesRequired in Original: NoRequired For: Property Purchase32. DEED OF DECLARATIONDescription of Property Document: A copy of the Deed of Declaration of the Apartment Owners Association and the Bye Laws annexed to the same can obtained from association office. It should confirms to the sale deed/title deed. It is also advisable to check any additional burden/costs in the form of transfer fee payable by the Transferee.Why it is required: To establish transfer of ownership to original buyer by builderMandatory: NoRequired in Original: NoRequired For: Property Purchase33. Latest Electricity BillDescription of Property Document: Always insist on Latest Electricity Bill and Payment receipt from previous owner as Electricity bill is the another solid proof to establish the ownership of current owner.Why it is required: To establish ownershipMandatory: NoRequired in Original: YesRequired For: Property Purchase

BUYING A FORECLOSURE HOME AT AUCTION: THE BASICSIf you’re interested in buying real estate as an investment, the local multiple listing service isn’t your only option. Real estate auctions are growing in popularity. Experienced investors often buy property this way, but technology has simplified the process and has made it less intimidating to new investors—as long as you do your homework and use free tools from http://Auction.com to find homes close to you.WHAT TYPES OF PROPERTIES ARE SOLD AT AUCTION?While virtually any type of property or asset can be sold at auction, most home auctions—and the type you’ve probably heard the most about, thanks to the housing crisis—are foreclosures. Depending on the state, a trustee assigned by the lender or an officer of the court conducts a foreclosure sale to recover the balance of a loan from a borrower who’s defaulted on their mortgage payments. According to RealtyTrac, as of January 2018, there were close to 570,899 homes in some stage of foreclosure in the United States.There are two types of real estate auctions: live (in-person) and online. The latter is becoming more and more prevalent as people grow more comfortable with making major purchases online.No matter which route you choose, remember that home buying can be complicated. Companies like Auction.com are making the process more efficient and transparent, but in most cases, there are still long contracts, escrow, disclosure documents and other paperwork required by law.BUYING FORECLOSURE HOMES AT IN-PERSON AUCTIONSThe phrase “real estate auction” often brings to mind the stereotypical image of a small group of investors, huddled around an auctioneer on the county courthouse steps. And in fact, almost all foreclosure auctions are conducted live in front of (or in a room inside of) county courthouses. Many states only require a publicly accessible space, like a hotel ballroom or room in a convention centre. In some of these larger venues, hundreds of foreclosure properties might be auctioned on a single day.Some of the larger counties in Florida now conduct foreclosure sales online; Wayne County Mich., the county in which Detroit is located, conducts online tax lien sales (where the government seizes a home due to unpaid taxes). The laws vary widely from state to state, so be sure to check out the specific rules governing your state.Live foreclosure auctions are free to attend and open to the public to ensure that home being foreclosed upon receives the highest possible recovery for the bank or lender and the smallest deficiency for the borrower. Anyone can attend; however, if you want to bid, you’ll need to register. In almost all cases, you’ll have to show that you’re in possession of sufficient funds to pay for the property in full. (There are a few states that allow an auction day deposit and payment in full the following day).HERE ARE THE BASIC STEPS FOR PARTICIPATING IN A LIVE FORECLOSURE AUCTION:FIND AND TRACK FORECLOSURE AUCTIONSIf you are looking to buy a foreclosure home, consult an online resource like RealtyTrac or http://Auction.com to find foreclosure auctions in the area or areas in which you want to buy. Remember: After creating a free account at http://Auction.com, you can easily view which foreclosure homes are for sale near you. If you find something you like, save it to your favorites.Foreclosure sales data is usually available from the specific county either online or at the county courthouse, or from the third-party foreclosure sales agent, often called a “trustee.” You can also work with a local real estate agent or broker to identify these foreclosure properties, but you should know in advance that, by law, there is no agent commission on these sales.DO YOUR RESEARCHBe sure you read and understand all due diligence documents and transaction details prior to the auction. It wouldn’t be a bad idea to seek independent advice from a real estate attorney or a knowledgeable agent.Research the estimated resale value of the property, how much the borrower owes on the mortgage, and whether there are any liens against the property. This last point is especially important. If you’re the winning bidder, you may have to pay off these liens. It’s worth hiring a title company or real estate attorney to run title searches on properties you’re interested in bidding on.DRIVE BY THE PROPERTY, IF POSSIBLEThis will let you see the home’s condition—from the outside. Homes in the foreclosure process are usually occupied by the owner who’s being foreclosed upon or a renter. Do not trespass or disturb the occupant! Doing so is a criminal offense.When you bid on a foreclosure, you’re bidding on the property “as-is.” You won’t know what condition you’ll find inside once you take possession. Extra, unexpected repairs could cost you thousands of dollars, so take that into account when figuring out how much you can comfortably bid. There’s a saying among investors that’s a pretty good rule of thumb: “How it looks on the outside is what it’s going to look like on the inside.” In other words, an unkempt exterior indicates an unkempt interior, while a home with great curb appeal will probably look similar inside!GET YOUR FINANCING IN ORDERMost foreclosure auctions accept cash, bank money order or cashier’s checks for payment. In nearly every state, you’ll have to pay in full immediately following the auction of the property; a few states allow you to pay a percentage at auction and the rest within a certain time frame.County foreclosure auctions often require advance deposits. The deposit amount varies across municipalities, but generally runs from 5% to 10% of the expected final bid amount of the property.CONFIRM ALL AUCTION DETAILS, EVEN ON THE DAY OF THE AUCTIONIt’s very common for foreclosure auctions to be postponed or even canceled. Sometimes an auction is canceled because the borrower comes up with the money to pay the lender the amount they owed, obtains a loan modification or sells the property as a short sale. Auctions might be postponed for a myriad of reasons; for example, the bank or lender might not be able to compile the proper documentation in time, or the owner might request more time to complete a short sale.ATTEND THE AUCTION AND BIDCheck-in at least one hour before the auction’s start. Get an Auction Bidder Card and raise it when the auctioneer announces a price that you’re prepared to accept as your winning bid.If you win the auction, your payment is due immediately or the following business day (dependent on state). Once you’ve paid in full, you’ll complete a certificate of sale or an execution of sale receipt, deed upon sale and IRS Form 8300, subject to state-specific laws.WAIT FOR YOUR CERTIFICATE OF TITLEWhile you’ll get your certificate of sale immediately, the actual certificate of title may take as much as 10 days to complete. During that time, the original owner may file an objection to the sale and pay the amount owed in full to retain their rights to the property. Don’t do any work on the property until you receive the certificate of title.BUYING A HOME AT AN ONLINE AUCTIONIn an online auction, you won’t find yourself standing on the steps of the county courthouse or packed into a hotel ballroom. You could be anywhere when you bid—at home, the office, even an airport—as long as you have an Internet connection. Bidding can occur 24 hours a day over the course of days or weeks, instead of on a single day.Online auctions also broaden the types of properties you can bid on short sales, non-distressed, bank-owned homes (known as REOs), and commercial property and notes.The steps for bidding in an online auction are similar to a live auction.FIND A PROPERTY YOU LOVEWith online auctions, you can search for and bid on properties all over the country. You can even bid on multiple properties at once. Remember, you can always consider getting a free account at Auction.com so you can easily find and buy a foreclosure home near you.DO YOUR DUE DILIGENCEMany online auction sites provide a wealth of information on the property page, including maps, estimated resale value and any liens. Be sure you read it all! It’s also a good idea to conduct your own due diligence, including a title search, and seek independent advice from a real estate agent or broker, a real estate attorney, or another experienced investor. Unlike live foreclosure sales, most homes sold in online auctions do have an agent commission (called “broker co-op” in the business), which allows an agent to get paid for their services.As with foreclosures, visit the property if you’re local. The real estate agent may even offer open houses; if so, bring your contractor with you to help you assess what repairs might be needed.REGISTER FOR THE AUCTIONMost online auctions require you to register and submit a refundable deposit in the form of a credit card authorization. This simple process ensures that all bidders are serious and motivated. (Don’t worry—you’ll get the deposit back if you’re not the winning bidder.)PREPARE YOUR FINANCINGTo expedite the close if you win, start gathering the following documents before the auction:Proof of funds or financing information. Although most online auction sites don’t provide financing, http://Auction.com has a large—and growing—number of homes with financing available.Entity documents if you’re bidding under a company name or entity such as an LLC, trust or limited partnership.An earnest money deposit, which is usually 5% of the total purchase price and due one business day after the auction ends.AND IF YOU’RE THE WINNER?Be ready for things to move fast. With http://Auction.com, for example, the contracting department will contact you within two hours and walk you through the online purchase and sale agreement, which shows the total purchase price and the timeline for submitting documents and payments. Make sure that escrow receives your documents and payments on time; otherwise, you could lose your earnest money deposit.Look closely at the property page for each property you are planning to bid on. Many properties have what’s called a “buyer’s premium,” which is the fee charged by the auction company for conducting the sale, from marketing through the closing. The amount can vary, but it’s usually 5% of the winning bid amount. Many properties don’t have a buyer’s premium because the bank or seller has arranged to pay this fee out of their proceeds from the sale.TITLE INSURANCEIt’s a good idea to purchase title insurance. Here’s why: The properties in an online auction often have quitclaim or special warranty deeds that will transfer the bank’s interest in the property to you at closing. The problem is that any undiscovered liens will transfer to you as well! Title insurance protects you from these risks. For some homes, you can buy title insurance through escrow; for others, you can buy it after closing.Occasionally, you’ll receive clear and marketable title to the property at closing. It depends on where the home is in the foreclosure process. This is another reason why a knowledgeable real estate agent or attorney can provide a valuable service to you.Buying real estate at auction can be a lucrative—and fun—way to start or enhance your investing career. It can also mean years of heartache for the uninformed, so take advantage of all the resources available to make sure you know what you’re getting into.Ready to go house hunting? Start by finding deals near you by getting a free Auction.com account and searching for local foreclosure properties.