What is Non–Bankable Cheque in Real Estate and How it works
Non-Bankable Cheques Explained for Property Buyers
In real estate, there are many confusing terms used, and we at Commercial Noida always strive to simplify those terms for our users. Today, continuing in the same spirit, we are back with one such term: Non Bankable Cheque.
Often in pre-launch properties or to initiate negotiations on properties, developers or brokers ask for a Non Bankable Cheque for EOI or other purposes. However, many buyers hesitate due to insufficient knowledge about this term. This hesitation is completely understandable, but at times, such decisions can cost them valuable deals.
So today, we will explore what this term means and how it works – so that the next time you're involved in a deal, you know exactly what to do.
Read more about the Comprehensive Guide On EOI In Real Estate.
What is meant by Non-Bankable cheque?
A cheque that is used by the buyer to express his preference or to initiate negotiations in a property deal. The cheque serves as an indication of interest and intent to purchase, giving the seller confidence that he is not wasting time with someone unserious but is instead dealing with a genuine buyer.
It is a post-dated or current-dated cheque that is not to be presented to the bank unless certain terms are agreed upon. Think of it as a "soft commitment"—a way to show the buyer’s serious intent without any immediate financial transfer.
Misconception about a Non Bankable Cheque
The term ‘Non-Bankable’ is not used in official banking terminology but is a general practice in the real estate market. Technically, there is no such thing as a Non-Bankable Cheque, but the term is used due to its nature—the seller is not officially authorized to cash it without a formal deal or the buyer’s consent.
Non Bankable Cheque Usage
1. During pre-launch offers (tentative prices & informal bookings).
2. To lock a price or initiate negotiation for a property deal.
3. To give the seller or broker confidence that you are a genuine buyer
Benefits of using a Non Bankable Cheque
• Shows serious intent to the developer or broker
• Helps start negotiation on price or terms
• Locks in price or unit in early-stage deals
• No money deducted unless you agree
• Keeps you in priority during pre-launch offers
• Gives time to check approvals and documents
• You stay in control of when the cheque is used
• Avoids full payment risk without commitment
• Builds trust with seller without financial transfer
Disadvantages of using a Non Bankable Cheque in real estate
• Can be deposited without your consent
• Not legally protected unless properly documented
• Verbal agreements may not hold up
• Cheque bounce can lead to legal trouble (Section 138)
• Risk of misuse if given to unreliable parties
• Usually no formal agreement in place
• May give a false sense of safety to the buyer
• Difficult to recover money if misused
Now, to safeguard yourself from any mishappenings, always issue a non-bankable cheque only to reputed and RERA-registered builders and consultants. Additionally, always write "Non-Bankable" on the cheque and ensure proper documentation is in place.
By doing so, your money will be safe, and you’ll have no worries—allowing you to focus on home buying and getting your desired unit booked.
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