Real estate investing is a significant financial choice that necessitates in-depth knowledge of the market. Understanding the fundamental words in real estate is key, whether you’re buying your first house or making bigger investments. Having basic real estate knowledge allows you to make informed decisions and communicate effectively with real estate professionals. In this guide, we’ll cover the key terminology in real estate, with a focus on real estate terminology in India, to help you on your investment journey.
- Carpet Area, Built-Up Area, and Super Built-Up Area
- Freehold vs. Leasehold Property
- Circle Rate
- Registration and Stamp Duty
- RERA (Real Estate Regulatory Authority)
- Title Deed
- EMI (Equated Monthly Installment)
- Encumbrance Certificate
- Possession Certificate and Occupancy Certificate
- Agreement to Sale vs. Sale Deed
- Conclusion
Carpet Area, Built-Up Area, and Super Built-Up Area
These are phrases used often in Indian real estate, particularly when purchasing residential homes. The real space within the apartment’s walls where your furniture may be placed is referred to as the carpet area. The super built-up area adds common areas like lobbies and staircases, whereas the built-up area consists of the carpet area plus the wall thickness. Knowing this jargon when it comes to real estate will help you avoid being misled about how much room you’re actually paying for.
Freehold vs. Leasehold Property
Leasehold and freehold are the two real estate terms in India used to describe property ownership. Owning both the land and the structures on a freehold property gives you complete control over it. However, a leasehold property is only yours for a predetermined amount of time—usually 99 years—after which the landowner regains ownership. Recognising this difference will enable you to safeguard your long-term property rights.
Circle Rate
The circular rate, commonly called the guideline value, is the lowest price at which a property can be registered during a transaction in India. These costs are under government control and vary based on your place of residence. Knowing the real estate circle rate enables you to determine if the price at which a property is being sold is reasonable.
Registration and Stamp Duty
Two necessary costs in any real estate transaction are stamp duty and registration fees. While the registration fee is the cost of registering the sale deed in the buyer’s name, stamp duty is a tax paid to the government during the property registration procedure. If you are familiar with this real estate lingo, it could be easier for you to budget for more than simply the buying price.
RERA (Real Estate Regulatory Authority)
To protect homebuyers and provide transparency in real estate transactions, the Real Estate (Regulation and Development) Act, or RERA, was implemented. Real estate developers and brokers are governed by law to ensure timely delivery and plan compliance. Because it ensures that the project has done legal due diligence, RERA compliance is an important real estate term that buyers need to be aware of.
Title Deed
The title deed is among the most significant documents in a real estate transaction. It shows who owns the land and has to be clear of any liens or other issues. It’s crucial to comprehend this word in order to avoid any legal issues down the road. When buying real estate, make sure you have a title deed attesting to the seller’s ownership.
EMI (Equated Monthly Installment)
Many real estate purchasers choose to fund their purchases using home loans. The amount you pay each month to settle the loan balance is called the Equated Monthly Installment, or EMI. Both the principal and the interest are included. Gaining knowledge of this real estate jargon can help you appreciate the financial commitment that obtaining a house loan entails.
Encumbrance Certificate
The encumbrance certificate is another important real estate term in India. This document certifies that the property is free from any legal or financial liabilities, such as outstanding loans or disputes. It is imperative that you obtain a clear encumbrance certificate to guarantee the property you are buying has a spotless past.
Possession Certificate and Occupancy Certificate
The developer issues a possession certificate upon your taking possession of the property, which acts as a documentation of the ownership transfer. At the same time, the building’s fitness for habitation and conformity with all regulations are confirmed by the occupancy certificate. The property’s use and legal transfer are ensured by these two certifications, which are crucial real estate requirements.
Agreement to Sale vs. Sale Deed
The sale deed is the final document that formally transfers the title of the property, whereas the sale agreement, in Indian real estate parlance, is the preparatory contract that describes the real estate terms and circumstances of the sale. To prevent legal problems later on, it is imperative that you comprehend the distinctions between these phrases.
Conclusion
For anybody intending to invest in real estate, especially in India, it is imperative that they be familiar with these words. Having a basic understanding of real estate allows you to make informed judgements about everything from the difference between carpet area and super built-up area to the ramifications of owning vs leasing a home. Keep your confidence in your real estate investments by being familiar with these essential phrases.
