Blog Details

Buying a property can be a tedious process. To avoid the wrongs and dodge the pressure, we have narrowed down the to-dos below:

1. Check the approvals and verify licenses: post finalization of your property, keep in mind to check the builder’s documents ranging from commencement certificate for work, environmental clearance and approved building plans. It is imperative to ask about the land title status and see if the builder has bought the land or has just development rights for it.
We have provided for a list of documents that should be checked.

• Title deed
• Intimation of disapproval (IOD)
• Commencement certificate (CC)
• Encumbrance certificate
• Approved layout plans
• Purchase agreement
• Occupancy certificate (OC)

2. Financiers: Once all approvals are in place post your finalizing the property, pick out banks which are ready to fund your project and go with the one offering you the loan at the lowest interest rate. One might face difficulty in finding financers for real estate since there is a whole lot of unsold inventory in the market.

3. Verify the builder: With increasing fraudulent cases in the real estate market, it is best to make sure whether you are entering into contract with a credible builder. In addition, the piece of land in question may be under litigation. Hence, we recommend you carry out extensive builder verification; this could be done by verifying its past or current projects or even by posting queries on the various online real estate forums.

4. Self-cost analysis: Brokers may be of good help, but do not go by everything they tell you. Many a times brokers might just mention the basic cost and not consider other factors such as internal/external development fees, preferential location charges, parking/club/statutory charges, and service tax, which increase the overall cost.

5. To buy Vs. To let: Many people buy a property thinking they will use the rent to pay EMIs. This approach couldn’t be more wrong. Do not over-leverage in hope that rental income will pay for the EMI. The rental income on residential properties is generally only 2-3 percent (as per statistics). Moreover, it is quite possible that the property may remain vacant for months before you can find a suitable tenant.

6. How to proceed with payment?: Various payment options are available in the market such as down-payment plan, possession-linked plan, flexi-payment plan and construction-linked plan. It is very easy to get swayed (when you have limited information), so choose carefully, as there is usually a cost for every convenience. For example, in subvention schemes, the price is at least 10 per cent higher than what is charged under regular schemes. Customers must also understand that any late payment or default on the part of the builder in such schemes will impact their credit history. Then, there are guaranteed rental schemes under which the developer either pays you rent for a fixed period during construction or for a certain period after possession. In the first scheme, the buyer gets regular payments from the developer during the construction of the house, which helps him offset a part of EMI or rent costs. In the latter scheme, generally for properties which are outside city limits, the developer offers rental income after possession. But the fine print is that there is no guarantee.

7. The size you need: Since most builders mention the super built-up area in pamphlets and brochures (this includes common areas such as staircase, lobby, etc.), the carpet area of the flat (what you actually get) could actually be 30 per cent less than the super built-up area. Take that into account to avoid you some dissatisfaction. For example, a two-BHK 1,000 square feet flat could actually be just 700-750 square feet. It is advisable to always go by the carpet area i.e. the area enclosed within walls. If you are looking to buy a plot for living at a later stage, it is advisable to first understand your requirement. Ensure that you check how much land (built-up area) you will need to build your dream home. Topography and soil are the other vital factors.

8. Check the infrastructure plans (Existing & upcoming): Metro connectivity or any other big infrastructure development in future linked to the location of the property you intend to purchase can boost the return on investment tremendously (or cause you inconvenience, in some cases). Also, ensure that the property is not close to any polluting industry, network towers etc. to ensure the health of the people living in the property.

9. Inspect the site: In most cases, the layout in the brochure is quite different from the reality. It is very common to edit pictures which show a nearby drain as a flowy blue recreational water point or make a public parking appear as lush green lawns. So, it is advised to do a thorough site visit before booking the property. Interact with people in the neighbourhood as they may know about any illegal occupation or other legal disputes related to the property.

10. Register your plot: After selecting the property, you have to register it with the authority concerned for you to become its lawful owner. Through registration of sale deed, a person is able to acquire the rights of the property from the date of the execution of the deed. Always do some research about the developer's record in terms of total square feet developed, market feedback and project delays. In addition, check the quality of its previous projects. You can also refer to some online real estate forums to be wary of any contingencies which may hinder the development of the property.