Buying your own home may be a cherished dream, but it doesn't take much   for it to turn into a nightmare. Given that real estate is among our most expensive purchases, landing a lemon can prove to be a financial disaster.

The only way to avoid such a situation is to take time out to conduct due diligence before finalising any property deal. Of course, a reliable shortcut is to buy into a project that is backed by financial intermediaries like banks. "Seldom would they hand out loans to projects where due diligence throws up pending mandatory clearances," explains Shveta Jain, executive director, residential services, Cushman & Wakefield, India.

ou can also engage a lawyer to carry out due diligence, but as a smart buyer, it's best to pore through the documents yourself. Here is a checklist of documents that you should peruse before signing on the dotted line.

Projects under construction

The first thing one should do in the case of projects that are still under construction is to make sure that the builder has all the necessary approvals in place, without which it would be considered illegal.

"We have often come across cases where projects have been stalled midway due to lack of proper approvals. Even finished projects have been razed for the same reason. Hence, I would never advise to go for a booking unless you have taken a close look at the key documents," says Ramesh Vaidyanathan, partner, Advaya Legal, a Mumbai-based commercial law firm.

The first of these is the permission to develop land into a residential complex. Builders need to get government approval to convert agricultural land or even land specially designated for industrial purposes into a residential area. If the builder has gone ahead without securing this approval, the entire project is illegal.

In addition, there are environmental and municipal clearances to factor in. For instance, the builder has to ensure that his project does not interfere with the urban and town planning, and that it has unrestricted road access.
Next, you need to find out if the builder has the authority to transfer the undivided share of land to each flat owner and the entire plot to the society, on completion of the project.

A Knight Frank research report on 'Parameters for Buying a Home' mentions that you should also ensure the builder does not reserve any right on your portion of the apartment, such as balconies or terraces.

Lastly, never forget that there's many a slip between the blueprint and the final product. The developers tend to charge a premium for additional features, such as a swimming pool or designer furniture.

However, unless you ask the builder to incorporate all the promised features in the agreement and make provisions for penalty in case of non-fulfilment, you stand on shaky ground.

Any sample flat that was shown to you would be demolished long before you obtain the possession of your house, leaving you with little evidence if you decide to drag the developer to court. Also, watch out for the fine print: builders may slip in a clause in the agreement, stating that they reserve the right to alter any of the promised features.

To be safe, take a look at the approved construction plans and ensure if they match what has been promised to you. Ask the builder to show you the requisite permits from the concerned authorities.