New Delhi: If you’ve long been cherishing the dream of buying a flat, the right opportunity is certainly on the threshold. Lately, buying an apartment has become easier as banks are reducing interest rates and making it easier for the middle-class to buy houses. Several banks have unveiled different products for home loan customers. Also, the Narendra Modi-led government had last month announced a Rs 25,000-crore financial package to revive stalled real estate projects.
Before buying a house, you should talk in the neighbourhood to get a fair idea about prices and the locality as some parts of the town to have water and other infrastructure problems.
Many experts are of the view that the real estate sector has been experiencing a slowdown and grappling with multiple issues such as court cases, insolvency proceedings, the non-banking financial company (NBFC) crisis and so on.
Here are the five important things a home buyer must consider:
(1) Is property Rera registered?
The biggest risk in buying an under-construction property is a delay in completion. A home buyer should always opt for projects registered with the Real Estate Regulatory Authority (Rera), which was aimed at bringing transparency in real estate deals. It is worth noting that the model Act and the apex court judgment giving home buyers equal right with the other creditors have made the under-construction house attractive.
The central Act also covers things such as starting from the launch of the projects and makes developers accountable for post-sales issues.
(2) Check if the builder can be trusted or not
Before you buy a property, it is advisable to check whether the builder is financially sound or not. There are USD 63 billion of stalled residential projects across the country, according to Bloomberg which cited a report of Anarock Property Consultants. A home buyer should avoid developers that got into trouble with other projects. Also, avoid builders embroiled in NCLT cases, if there are multiple consumer complaints against them.
Furthermore, a buyer should find for how long the builder has been in business, and keep in mind that chances of delay are higher in bigger projects.
(3) Builder-buyer agreement
It is crucial to read thoroughly the papers of the builder-buyer agreement and ensure that the completion time of the project mentioned in no uncertain terms. Plus, a buyer should verify whether the builder will adequately compensate the buyer in case of delay in completion of the project. Look closely the clause pertaining to delivery or possession date. Some agreements do not mention an exact date, as instructed by Rera.
Buyers should aim to invest in a property which is already 40-50 per cent complete and shows visible construction progress.
(4) Changes in the building plan
Before investing in a project, read the fine prints carefully especially about the provision regarding the change in building plan. Rera guidelines clearly state that any alteration can only be undertaken with a buyer’s consent. If changes have to be made to either the design or the layout of the property, the approval of two-thirds of the buyers in the project must be obtained.
(5) Bank loans
For those planning to buy an under-construction property on loan, it is always advisable to choose bank-approved projects. Here, banks evaluate the developer and the project before sanctioning the loan. In an approved project, lenders will ensure the project is completed and the realtor doesn’t default.
Also, approved projects may subsequently be disapproved for new buyers if there is a substantial delay or construction is not in accordance with the approved plans or a serious court case is filed against the realtors.