What Should You Know About Advance Payments While Buying a Home?

Blog 02

The home buying process commonly comprises itemizing different costs a seller is charging a buyer for purchasing a real estate property. One of the important parts is an advance payment for a property purchase, which safeguards the interests of the buyer.
One of the reasons is that it can help speed up the closing process. By making an advance payment, the buyer is indicating to the seller that they are serious about buying the home and that they want to close as soon as possible. This can help reduce or eliminate any delays that might occur during the closing process.
A real estate developer might ask for an advance payment from a purchaser, so a buyer must be well-informed of the reasons why the advance payment is necessary.
Vijay Properties always protects the interests of the property owner and maintains a completely open relationship between the owner and the purchaser.

Advance Booking –
Various developers do not disclose the terms unless they’re convinced of a buyer’s true intentions regarding their own lot purchase. Often, prospective property sellers will ask for the following to ensure that the client truly wants to buy the property.
-Goodwill deposit
-Booking amount
-Token money
-Bayana
-Earnest deposit.
This is asked way before the true deal is talked about.

> How much should you pay in advance?
Generally, home buyers should pay at least 10% of the purchase price in advance.

> What can you use the advance payment for?
The advance payment can be used for a number of purposes, such as paying for the down payment, closing costs, and prepaid expenses.

Stamp duty
Purchasers must pay stamp duty when buying a home. For this reason, however, bear in mind that this should not impact your decision-making. You may not wish to buy a house, or the seller might call off the transaction altogether. In any of these instances, any stamp paper you purchased may not prove to be successful. Those contracts are somewhat non-negotiable and hard to withdraw.

Home loan advance payment
Investors considering the purchase of preowned property, take note of this! Making a prepayment toward the settlement of a home loan may be dangerous.

TDS payment
All property buyers are required to deduct the TDS @1% on the payments made to the sellers towards the purchase of any property.

Finally, always make sure to get receipts and documentation for all payments made during the home buying process.

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