After zoning in on the farm that we liked, we decided it was time to take the first step forward, which was to come to an agreement with the owners that we will purchase the farm within a certain duration. The way it is usually done is that we write down an agreement stating we will pay a token amount as advance, and will pay the rest before registration. Usually there will also be a time limit specified in the agreement before which the transaction has to happen. If the transaction is not completed in the stipulated time because the buyer could not arrange the money then the advance is forfeited. If the seller fails to clear their documents they will pay back the advance with interest. The trouble started right from there for us.


Since we were going through a friend of friend as the mediator (real estate agent), we put full trust in him. In fact our friend who bought a land from their friend (the said real estate agent) did not even see any documents before buying and just went for registration. They have so much trust in him. Anyway, we did not write up any kind of agreement and gave the advance. We promised to pay the remaining amount within 3 months since we need to make some arrangements to get the money.


I never had a plan to purchase a farmland in my retirement plan. As such I did not build a corpus for that goal. This new goal happened organically after I retired and meeting some unschooling parents. You know how expensive real estate is. Naturally I cannot take out such a huge chunk from my retirement corpus to fund the purchase of farmland and put our retirement at risk. One option would be to go back to work, take out a chunk from retirement corpus, buy the land, and work for a few years to build up the retirement corpus again. Of course that was not an option that we want to even think about at all since we are so comfortable with our current arrangement :). We decided to go with another plan.


My better half has been able to build up a small corpus by saving up the salary she got when she was working for a couple of years here in India way back in 2011-2012. Then she kept adding to that corpus a small amount of money which she gets as rent from a house she owns in her home town. But all those incomes put together was not sufficient to buy the 2 acre land. So her parents decided to sell a property to help her out for the rest of the amount. As you can imagine, liquidating real estate is not an easy task. It takes a lot of time. So we were not sure if we can arrange the funds in time. Thankfully we did not have an agreement so that might come handy.


Meanwhile there were new developments over at our seller side as well. We found out that there were a couple of problems with the land which stops us from buying it. One, the land we were planning to buy is part of a much larger area allocated by the government to a bunch of farmers and as such all those farmers have a title with the same survey number. We cannot purchase a land that is part of the whole. The second problem is that they did not have a clean EC (encumbrance certificate). The farmer still has a loan with the bank and unless it was cleared we cannot purchase the land. Those are kinds of problems you have to face when doing real estate transactions.


Arranging money for the land had it’s own problems. Since we were in a hurry, mrs. re-ynd’s parents had to sell their property in a hurry. As a result they did not get a good deal because their buyer low balled them, profiting on their urgency. Land takes time to be sold. If you are in a hurry, you get less bargaining power and as a result less price. More problems started here as well. The buyer gave some advance and said he will pay the rest in 3 months or so. Her parents agreed, again without writing any agreement. Of course the agreement is not going to get your money. It will just be some evidence in court and the cases can drag on forever before you get justice.


This buyer could not arrange money in time and kept on extending. Not sure if he made up stories or if they were real, but he kept saying he will arrange soon. Meanwhile the price of the land being sold by her parents was going up, but since they already gave the word and agreed on a certain price, they did not feel comfortable asking for more from the buyer. Again, I’d like to remind you of the perils of real estate. Every few months or so he would pay some amount and kept asking for more time.


Over at our farm, our seller was going round and round at the Tahsildar office to fix the title deed. Basically, the land that was allocated to them was to be split out of the bigger survey number and they should have their own survey number. After running around the office for 10 months, they finally got the documents done. Still the loan on the land was not cleared. They suggested that once we buy the land, they will repay the loan in the bank and clear the lien. All of this information was communicated to us by the real estate friend and we just went by trust. However, there is one twist. The seller wanted more money because according to them the land price has appreciated during these ensuing 10 months.


This is quite ridiculous. We got the short end of the stick in both cases. The land that my in-laws are selling got a lower price, and after the 10 months, still got paid only half the amount, and the buyer would not pay any higher price although the land prices have appreciated in the last 10 months. On the other hand, here our seller already quoted a very high price, delayed us for 10 months because they did not have the right documents, and then on top of that wanted a higher price at the end of the 10 months. We could not walk away in both cases since we already invested too much time and energy. This is what real estate people do. They know all the tricks in the books. Anyway, we decided to buy even at the higher price and asked the agent to prepare documents for registration.


Although mrs. re-ynd did not yet get the full amount from the property that their parents were selling, it was just barely sufficient to pay for the land we wanted to buy after adding up all her savings. So we decided to proceed with the registration. That, and all the struggles related to the registration process in the next post on sustainable living.