Your Guide to Getting the Best Deal in Property
June 11th, 2019
The real estate sector has been expanding at a rapid rate and so has the number of regulations and standards around it. When buying a home, it is essential that you know all these regulations to get the best of the property you choose.
The real estate sector has undergone a lot of changes in light of regulations, such as RERA (Rural Estate Regulation Act 2016), which was formulated to make the segment transparent for buyers. These are some of the factors to be considered when buying real estate in India:
1. Understanding Regulations
It is extremely important to understand the true impact of a legislation like RERA. You need to understand that RERA does not cover all projects. The project needs to be 500 square meters or over to qualify for RERA. To ensure compliance, the project has to be registered by the builder with the regulatory authority.
2. Completed vs Under Construction Projects
Builders are focusing on completing the existing projects instead of starting new ones post RERA. Will under-construction projects be the right choice for you? You need to see how strong the application of RERA is in your state.
Completed units are a better bet as there is nothing pending and no GST applicable. Under-construction projects can be considered only for reputed developers with diverse business interests.
3. Special Schemes by Developers
Developers come up with special schemes like no EMI till possession. These seem very attractive as you pay around 10 to 30% of the total value upfront. The balance is paid by the bank to the developer as a loan through an agreement where you, the developer, and the bank are the parties involved.
The catch here is that the principal of your loan does not change until you start paying the EMIs as the amount taken from you goes towards interest.
You stand to gain more from discounts offered on the value of the property or additional waivers related to the total cost.
4. Metros or Tier 2/3 cities
You might often feel that metros offer a better deal compared to Tier 2 or Tier 3 cities. The rental for metros is higher, though the capital appreciation is lower. The growth potential in cities is mostly saturated, while the scope for appreciation for micro-markets close to metro cities is substantial. In metros, you pay for the locality and not the property.
5. Direct Buy or Through an Agent
Sometimes, you might be tempted to search for the right property yourself to save on brokerage fees.
However, the right broker will ensure that you get the best property according to your budget and will be worth the fee. You will get a wider range of choices and get a true picture of the property which the developer might conceal from you.
6. Legal Status of Property
As a buyer, you should exercise caution with regard to verification of title of the property. Here are the documents that you need to examine:
- Title documents of the property.
- Nature of the title.
- Development agreement.
- Information on any pending litigation.
7. Land Use Permission
You need to find out whether:
- The property has been converted for non-agricultural use or not
- Scrutinize the master plan to see whether the zonal plan has been followed. If there has been a deviation, you need to determine if the required approval been obtained from the Town Planning Authority allowing change of land use.
Get the Best Value for Money
Buying property requires an in-depth understanding of the sector, location, and regulations. With the right guidance and information, you can make a profitable investment.