According to an article published by Forbes, 2017 is going to be a bumper year for India when it comes to real estate since the country is at the top of the list of preferred destinations for real estate investment in the eyes of major institutional investors. With the maturing finance industry and repeated interest rate cuts by the central bank, Indians have almost perfect conditions for property purchases. Buying an apartment, the dream of many is exciting, but also one of the most challenging tasks, because of the many pitfalls involved in the process. Let us take a look at what all you need to make sure of when buying an apartment from a builder.
If you’re planning on buying an apartment in India, there are a few things you should do beforehand to ensure a smooth and successful purchase.
1. Know your budget
Before you start searching for an apartment, it’s important to know how much you can afford to spend. Make sure to take into account not only the purchase price of the apartment but also the associated costs such as stamp duty, registration fees, and other miscellaneous expenses.
2. Get your finances in order
Once you know how much you can afford to spend, you’ll need to get your finances in order. If you’re taking out a loan to finance the purchase, make sure you compare interest rates and terms from different lenders before making a decision.
3. Do your research
Before you commit to buying an apartment, it’s important to do your research and make sure that the property is a good investment. Pay attention to factors such as the location, amenities, price, and resale value.
4. Hire a lawyer
It’s always a good idea to hire a lawyer when buying property, especially in a foreign country. A lawyer can help you navigate the legal process and make sure that everything is in order.
5. Insure your property
Make sure to get insurance for your apartment before you buy it. This will cover you in case of damage or loss, and can also help protect you if you’re sued.
Also read: Tips for NRIs buying apartment in India
Things to Look For in the Apartment
Once you’ve identified the apartment that you are interested in buying, make sure you get the floor plan of your apartment and calculate the carpet area, i.e., the area enclosed within walls. Look for the inside and outside wall finish, appropriate floorings, especially in the bathroom and kitchen, child-safe electrical fittings of a reputed brand, good quality doors providing easy access, wide windows allowing enough light and air into the rooms, cross-ventilation for better circulation of air, sufficient ceiling height and provision for AC fitting.
What to Look For in a Builder
It is always advisable to go with a builder who has an established presence in the market. Look for their previous work and the quality of the apartments to establish their reputation. You can visit buildings already constructed by the same builder to decide upon the quality standards followed by the particular builder. Ask for certain paperwork to determine if the builder is legally sound, including their commencement certificate for the project you are interested in as well.
Questions You Should Ask the Builder
Ask the builder regarding the details of projects completed by them and how much time they took to complete each project. Most importantly, you need to ask whether they received the completion or occupancy certificates for completed projects or not, along with the number of flats sold.
Status of Property Title
You can guarantee the title by making sure that the builder has bought the land and constructed it. Don’t fall for a builder’s Joint Development Agreement with Landowners, which has numerous legal flaws, mostly unintentional, of course.
Commercial Rights Retained by the Builder in the Project
Although it is mentioned in the agreement with the builder, you should check for the builder’s commercial rights before making the payment of the booking amount.
Copy of Agreement
Legally, it is your right to ask for a copy of the agreement, which most builders are hesitant to share before the complete payment is made. Once you have paid the booking amount, the builder will not listen to you for the same. As a matter of fact, most agreements are heavily in favor of the builder, where you might not be left with any other option but to agree.
Average Price of the Property
It is essential to ask for the average price from the builder since there is no fixed price for any property.
Deviation from Approved Layout Plan
Ask for a tentative deviation from the approved layout plan, which in most cases the builder does not disclose.
Asking for the payment schedule from the builder, beforehand, will save you from any surprises in the future since many buyers find payment schedules impossible to follow with tight timelines.
It would be wise to ask for the master set of project documents for future reference, which many builders provide in CD / DVD form. Buyers are sometimes compelled to choose a home loan provider who has already approved the project since builders set stiff timelines so that buyers will not have time to approach any other bank. Builders do that to receive a commission from the home loan provider.
However, this becomes unfavorable for the buyer, since in this process, the buyer does not gain access to most of the critical project documents.
To buy an apartment at the best rate, do not go by what the broker tells you. Other than the basic cost, count in other factors, such as preferential location charges, internal and external development fees, parking, club and statutory charges, and service tax. All of this will escalate the total cost.