Before you pay token money for a home, don't skip these key checks

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A token payment is often the first financial commitment a homebuyer makes while purchasing a property. Though relatively small compared to the property's value, it can expose buyers to financial and legal risks if paid without proper verification.

Here are five things you should check before transferring the money.The most common risks include forfeiture of funds if the deal falls through, falling victim to property scams (such as a seller taking money from multiple buyers), and proof issues if the payment is made without a written receipt. It rarely exceeds1 to 5% of the property’s total agreed price.

Here are key things you should check before transferring the money.

Verify the property's title and ownership
Ownership is established through registered records and title history, not verbal assurances. Get certified copies of the title deed, past sale deeds, the Encumbrance Certificate, and recent tax receipts. Also confirm there are no unpaid property taxes, maintenance dues, or utility arrears, since these can pass on to you after transfer.
Check RERA registration
If it's a new project, confirm the builder has registered it with your state's RERA authority, and that the project details match what's advertised.
Insist on written terms, not verbal promises
Verbal promises have no legal value. Make sure everything is in writing, including the token amount, property information, deadlines, and what happens if one party withdraws.
The receipt or agreement should clearly state the refund conditions, the timeline, and what happens if either side backs out. Screen the agreement for refund clauses before signing, and keep payment receipts as proof.
Document the transaction
Make sure to ask for a receipt for the token amount, stating that the buyer has paid and the seller has received the amount. It must also detail the agreed-upon terms regarding termination and timeline. Ensure that the information about the buyer, seller, property and payment is accurate.

A token payment may look small next to the overall property cost, but the risk attached to it is not. Verify title, confirm RERA registration, get everything in writing, pay through traceable channels, and know the refund rules; before you complete the transfer.

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