With options of easy home loans and EMIs (Equated Monthly Installments), buying a new flat is quite a tempting idea now-a-days. However, instead of going by the flow, you should do your research and decide on the property wisely.
Here are 10 things to keep in mind while buying a new flat in India:
1. Know the difference between super area and carpet area
In most cases, while quoting price of a flat, real estate developers mention super built up area, which includes common spaces like staircase, lobby, elevator space, shafts, and even the thickness of the boundary walls of the building.
Meanwhile, carpet area is the actual surface area of your flat and is significantly lesser than the super built up area.
2. Don’t bank on sample flat
Don’t book your flat based on the sample flat your real estate developer showed. Sample flats are custom-made in a way to attract customers.
They mostly have higher ceilings and glass doors that give a sense of more space.
Besides, the glass-partitioned bathrooms, designer tiles and bath fittings, modular kitchen, plaster of Paris works and ambient lights are not likely to be there in your actual flat unless you shell out some extra bucks.
Ask the real estate developer for detailed specifications, like what wood is he going to use for doors, whether it will be marble or vitrified tiles on the floor.
3. Check if the builder has got all his permits
To avoid problems during registration of your flat, make sure the builder has obtained all his permits and clearances prior to starting the construction of the building.
These include correct land use permit, clearances from electricity board, water board and local registration body. Cross-check the documents with your lawyer and only invest in the flat when you see construction has already begun and others have also started booking flats.
4. Are there bank tie-ups for the developing building?
If yes, then it is a good sign. It means all legal papers are in place and you will be able to avail hassle-free loan.
When builders tie-up with banks, the latter at the very beginning do a thorough examination of the property, which means, it’s a safe investment for you.
5. What is the clause for late possession
Developers often seek a grace period of around six months for handing over the property based on a hypothetical shortage of funds or shortage of raw materials supply or labour shortage or heavy rains.
Make sure the clause for late possession is clearly mentioned in your contract. The builder is bound to pay a monthly penalty if he crosses the deadline. Seal the agreement between your lawyer, builder and the loan-approving bank to ensure legal safety.
6. Getting a refund is not easy
Take your time to think and decide before investing in a new flat. Remember, getting your booking amount refunded will not be that easy.
There is no inked rule that builders have to follow if you cancel your booking. Mostly builders will deduct 10-20% of the booking amount while refunding your money. Small builders may not return your booking amount at all.
7. Don’t look for freebies
You might be tempted to a scheme that offers freebies on registration fees, including modular kitchens and even cars. But know that there are no free lunches in this world.
All costs are factored into the price of the flat you are going to buy. It may also suggest that the builder is in urgent need of cash and chances are high that such projects might not have all required legal approvals.
8. Cash discounts are a myth
You will come across many projects where builders will offer you cash discounts on “immediate” booking within a day or two and warn you that the prices will be revised upwards after the mentioned period.
Don’t hurry and rush yourself. It is a much-used sales trick by developers and their agents to convince you into buying the flat without giving you time to think. Remember, it is your hard-earned money. Invest wisely.
9. Go by price per square foot
You will often come across a housing ad saying this particular project is the cheapest one in that particular area.
For example, the current price of a 2 BHK flat in a particular area in Mumbai is Rs 55 lakh while the builder in the ad is offering same flat in the same area for Rs 45 lakh. But what is not mentioned is the area of the flat.
A 2 BHK flat may be of 1200 square feet as well as 700 square feet. Ask for the size of the flat and the rate the builder is taking per square foot and calculate yourself.
10. Verify the reputation of the builder
Before investing in what he is building, it will be wise to do some background check of the real estate developer. Check out his earlier projects, the quality of material he uses, if he delivers on time, his future projects, his reputation in the market, as well as reviews of his previous customers.
Sreya is based in Kolkata. She is a Senior Editor of Big Wire.