Property purchase decision - BEFORE YOU BUY Consider These Critical Checks

Property purchase decision  - BEFORE YOU BUY Consider These Critical Checks

Keep these critical checks in mind when you make the purchase decision, says Hiral Thanawala, ET

1. WHAT'S THE CARPET AREA?

This is a big bone of contention. Builders try to hoodwink buyers by touting the super area of the project. Super area includes the common facilities used by all residents like the lobby, elevators, staircases and corridors.

These facilities can sometimes be up to 20-25% of the super area quoted by the builder. The built-up area is the area covered by a house.This also includes the area that gets covered by walls and storage places.

What an owner actually gets to use is the carpet area, which can be 60% to 65% of the super area. Make sure you know the carpet area of the property.

“Ask the builder for the break-up of the super built-up area and the carpet area. This should be mentioned in the agreement of sale,“ says Ashwini Kumar Hooda, Deputy MD, Indiabulls Housing Finance.

2. IS PROJECT UNDER RERA?

The Real Estate Regulation Act (RERA) can ensure timely delivery by preventing the builder from channelising funds to other projects. However, not all projects are covered by RERA.

Some states have still not implemented RERA. In other places, some older projects are not covered by the new Act.

3. IS PROJECT APPROVED?

Run a due diligence about the title of the property and the status of approvals and permissions. Banks and some agencies do this for a small fee.

 If everything is fine, you will be able to get a loan. If something is amiss, the loan plea may be rejected.

4. ARE FREEBIES FREE?

Builders in some cities, especially Bengaluru, are luring buyers with offers of free woodwork, appliances and white goods.While all this sounds attractive, remember that there are no free lunches.

There's a good chance that the builder has included the cost of the freebies into the price of the property. You will ultimately be charged for the stuff you think you are getting for free.

“Buyers should not be lured by freebies and discounts,“ says Jaffer Ali, Founder & CEO of online real estate advisory firm PropUrban.

5. CAN YOU AFFORD THE EMI?

The first thing to assess is whether you can afford the EMI of the home loan you intend to take.

Many people get emotional while buying property and overstretch their finances.

“The home loan EMIs, maintenance charges, property taxes and sundry expenses on housing should be within 30% to 35% of your total household income,“ says Amol Shimpi, Associate Dean & Director at Royal Institution of Chartered Surveyors School of Built Environment.

Buying a house you can't afford will force you to skimp on other critical financial goals such as children's education and saving for your retirement.

6.CAN YOU TRUST THE BUILDER?

The post-demonetisation slowdown has forced many builders / PROMOTERS to offer attractive payment options.

In Bengaluru and the NCR, assured buyback schemes promised to take back the property at a 30% to 35% premium after 18-36 months of completion.

There are also subvention schemes that require no EMI till possession. Cautions Hooda, “Developers include interest to be paid in the property cost. If they fail to repay the interest, it impacts the credit score of the buyer.“

7. IS IT ACCESSIBLE?

Location is critical while buying a house. Buyers prefer a house which is close to the workplace as well as other facilities.

“After shortlisting projects, a buyer must visit the area at least 2 to 3 times and get a first-hand experience of the area,“ says Ali.

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