Day 52/ 365 – House Hunt – Meeting with prospective seller

As mentioned in my earlier posts, I have been searching for a home for quite sometime. This weekend, we finally found something which we were interested in buying and so we asked the real estate agent to arrange a meeting with the seller this week. The meeting happened today and it didn’t go as planned. Since me and wife are both salaried professional, we wanted to get a home which would be financed by the bank. The bank normally finances 80-85% (depending on your credit scores and eligibility) of the agreement value. The seller however was only willing to make an agreement which was less than Rs. 49 lakh as he wanted to avoid the TDS (tax deductible at source) which needs to be paid if the agreement value is more than Rs. 49 lakhs. The total cost of the house was coming to 80 lakhs, so this would basically mean that bank would give a loan of Rs. 40 lakhs and the remaining 40 lakhs would need to be managed by me. I was very surprised on hearing this. The reason the seller cited for not making the agreement for more than Rs. 49 lakhs was that once the TDS is deducted, there is no guarantee that money would be refunded by the Income Tax officials.  Apparently the seller had some really bad experiences with the tax authorities and he didn’t want to take any further chances. The estate agent asked me if there was anything I could work out. I replied in negative saying that since we are salaried, this does not work for us.  The meeting finally ended with the estate agent promising to revert back to us with some kind of decision by the end of this week. Not feeling very hopeful about anything being worked out for this place.