Every single one of us has one dream in common, and that dream owns a place, be it a flat, a bungalow or property we can call our own. A home we can raise our families in. A place where our kids can grow up in a safe environment, with comforts and individual freedom. A place to entertain our friends and relatives. A place that we can fill with love, life, laughter and happy memories. A property represents more than just the emotional need of having a roof over one’s head.
It is by far the single most important investment an individual will make in his/her entire lifetime. Therefore, it is essential to have a checklist of things to remember when one decides to purchase an apartment or property.
Checklist Item #1: The selection process flat or apartment represents a significant financial commitment. It is quite literally a once in a lifetime purchase. It is therefore but obvious that an individual is thorough when selecting a property. The selection process needs to take into account one’s budget, the prevalent market rate per square foot, the location of the property/building, the reputation of the developer, the legality of the property, availability of finance options and even a visit or two to the development site to see firsthand the building process. Moreover, the advice of well qualified professional and family members with prior experience must also be sought.
Checklist Item #2: Carpet area v/s Super built up Developers and builders always quote the super built-up area of a flat to formulate a per square foot cost of the apartment. The actual area of the flat will be slightly lesser in actuality. The super built up area includes all the common areas of the building, including but not restricted to the atria, the lobby, staircases, elevators, and in some cases even the thickness of the outer walls.
Checklist Item #3: The reputation of the builder vis-a-vis the competition developer is only as good as his last development. When considering purchasing an apartment, make sure you do your homework about a builder, visit a few of his former constructions and do a thorough evaluation about what his competitors. The purchase decision should not be a hurried one, remember, this isn’t a car or a cellular phone that you will seek to upgrade within a few months, this is a once in a lifetime purchase, the consequences of which you will have to live with for a really long time. Ergo a little research will go a long way!
Checklist Item #4: Legality of property an important item that a buyer must consider is the legality of a construction in which he seeks to invest. Are the title deeds clear? Have the deeds been verified and gazette? Is the land non-agricultural? Does the developer have all the permits in place? What is the status of the conveyance of the land? All these are vital considerations in judging the legality of the property.
Checklist Item #5: Budgeting normally, the rates quoted by a builder and the value of the property is derived by multiplying the two factors (the saleable value and the super-built-up area).This rate is often called the base rate. There could be many other components, such as car parking costs, advance maintenance collections, etc. The sum of all these factors defines the total purchase amount. The budget amount should also consider stamp duty and registration fee, which will be a percentage of the total price of the apartment.
Checklist Item #6: Brokerage Fees When a flat is bought through a registered realtor, a brokerage fee is paid to the said realtor. The brokerage can be anywhere between 1 to 2 percent of the total value of the flat. In order to avoid brokerage fees, it is advisable to directly approach the site office of the builder and enquire about the prevalent rates. It may seem like a lot of work for little returns, but remember, even 1 percent of a pricier property could work out to a tidy sum of money that can be saved on rather easily, by eliminating the middle man!
Checklist Item #7: Don’t go by the sample flat Judging an entire development based on the sample flat is akin to judging a book by its cover. To showcase all the positives about one’s project, the sample flat will but obviously be worked on meticulously. Base your judgment of a property instead on the reputation of a builder and consultation with knowledgeable people.
Checklist Item #8: What is the builder’s indemnity for in case of late possession? We all know that the date of possession of an apartment can be affected by several reasons; in some cases for up to several months at a time. Reasons for the delay being as diverse as the shortage of raw materials to heavy monsoons. As a rule, of thumb, developers seek a 3 to 6 month grace period to deal with these eventualities. This grace period needs to be specified in the contract signed between the developer, the bank, and the customer. This tripartite agreement can have far-reaching effects if not signed. Make sure you read the fine print!
Checklist Item #9: Availability of home financing options at the developer’s end Hassle free financing is a literal prerequisite in the purchase of a flat. Even developers realize this, which is why most builders worth their salt, will sign up banks and financial institutions to bankroll potential home buyers’ ambitions of buying a home. Always check the financial institutions associated with a project.
If you have several government banks associated with the builder, you can rest a bit easy as governmental financial institutions do not associate with a project unless they feel it is a secure one. About the author: Jesse Harmon is a realtor who runs a successful realty consultation firm. His opinions are much sought after by both developers and consumers and he is widely regarded as an expert in the real estate space.