Builder wants ₹55L registry on a ₹40L flat but will return the difference in cash. Is this actually normal?
Hi everyone, 25F here. I am buying a bare-shell flat for my parents in their city (I don't live in the same city, which makes coordinating this a bit trickier). We need to get the interior work done before they can move in, and the approximate interior cost is about ₹15L.
The Math:
Actual Property Value: ₹40L
Registry Value Demanded: ₹55L (Builder insists on this for his paperwork)
Home Loan Amount: ₹44L
The Builder's Proposed Sequence:
I execute an RTGS transfer of ₹11L to his corporate account to satisfy the bank's down payment (margin money) proof.
We register the property at ₹55L.
The bank disburses the ₹44L loan directly to him.
Out of the total ₹55L he receives, he keeps his ₹40L asking price and will give me the ₹15L difference back in physical cash.
We will then use this ₹15L cash to fund the interior work.
My Questions:
My parents are telling me that this kind of setup is a very common thing in real estate. Is this actually normal?
Has anyone here gone through this exact RTGS-to-cash process with a builder, and did they smoothly hand over the cash as promised? Managing this remotely makes me cautious, so I'd appreciate factual experiences.