Purchasing a property means investing one’s savings of lifetime. Many a times, even the cost of the property is so high that you’ll not be able to meet up with the costs after investing all the money you have saved for years and you might end up taking home loans from banks & financial institutions. It would take a lot of time and money in the form of monthly EMIs when you repay the home loan, so it is a sensible idea to contribute wisely and securely so that you get what you are paying for.
Given below are few vital points that you can take as reference while purchasing a flat:-
Look Weather The Plan is Construction-Linked
Most of the real estate developers go for CLP or construction linked plans, which puts heavy burden on the buyers. Under CLP, the bank pays installments to the real estate developer on the behalf of the buyer on completion of certain construction-related milestones. The bank disburses a certain amount on the pre-decided slabs laid by the developer and most of the amount is collected by the developer till the completion of the property’s construction.
The last 5% of the total cost of the property has to be paid by the buyer after the real estate developer offers property’s possession. The buyer’s loan repayment starts after s/he gets the possession of the property. However, the buyer is paying much more than the actual cost of the property. S/he is paying the EMI, the interest on the EMI and an amount as Pre-EMI.
There’s a risk for the buyer where the seller or developer delays handover of the property over the agreed period. As a buyer, you can check the past records of the developer before investing there for the property and if possible, avoid CLP-planned real estate projects.
Check Whether The Plan is Sanctioned
The next point that you must look for is that whether the plan is sanctioned or not. A sanctioned property plan means if the developer has proper legal rights to construct the property on that particular land or not. The owner of the land must have all the documents that show his/her ownership towards the land. The documents include conveyance deed, mutation certificate and municipal tax documents. The property owner must have all dues cleared and municipal taxes paid in order to apply for plan sanctioning. So if you are looking for apartments, make sure to look for the properties that are legally sound and the development plans are sanctioned so that you do not have to face any legal problem in getting loans, mortgaging the property or selling it. “Even approved projects may subsequently be disapproved for new customers if there is a considerable delay or construction is not in line with sanctioned plans or a serious court case is filed,” says Jairam Sridharan, President & Head, retail lending & payments, Axis Bank.
Check Whether The Builder Has A Good Past Background of Completing Projects
You might be looking for the strategic location of the property, total built-up area and amenities provided by the developer while looking for an apartment, but did you ever check whether the real estate builder has a good reputation for timely handovers or not? Well, there are many real-estate developers who start with big concepts and show their larger-than-life image that lures the prospective customers, but investing in those properties give the buyers nothing more than disappointment.
It is, therefore, recommended that one must research well on the developer’s past background and check whether s/he has been able to complete any project, and even if he has completed a few projects, how early s/he was able to deliver it.
Financial position of the builder matters a lot when one is looking for a property investment. If the developer has debts on him/her, it would be impossible for him/her to complete the project, even when s/he gets financial support from the bank.
So, if you are considering the above-mentioned points while investing in a property, you will get a property that is worth your investments, as one smart decision can help you get the best property in reasonable prices.