Anybody interested to invest in a residential property should evaluate the following points:
It is normally a good idea to run your paper work with your preferred banker to understand one's eligibility for loan. The banks normally fund 70-80% of the value of the residential property. The balance amount has to be arranged for by the buyer upfront before he applies formally for a housing loan for buying a property.
Budget and loan eligibility would determine one's choice of location. Ideally one would want a location close to office and other social infrastructure. Our residential market report would give an idea of the prices prevalent in different market segments / areas to help clients firm up their choice of locations.
Shortlisted projects would already have been pre-approved by certain banks. It is always better to work with a standard housing finance institution like HDFC or banks like ICICI, SBI, Axis, Kotak etc. They evaluate a project legally and valuation wise before according project approvals for housing loan. Certain banks fix valuations for a particular project. They would only provide loan of 70-80% of their valuation figure. In such cases the buyer's contribution would be far higher than initially envisaged.
Buyers should check legal paper work of projects being considered in the following ways:
Client's should understand the landed cost for the property purchase. The purchase price is a combination of the basic value of the property plus costs like floor rise, premiums for east facing or garden facing, amenities cost, car park cost, club house, infrastructure cost, corpus fund, advance maintenance etc. On top of this would be the applicable taxes and stamp duty for registration.
It is worthwhile to check the payment plan for multiple reasons:
Check the dates that the developer is willing to commit on paper. What do you feel realistically about these dates? Check with other stakeholders about these dates.
If the project is spread over multiple phases then when does the clubhouse get completed? It should not happen that you buy property in phase 1 and get the clubhouse after phase 10.
What is the developer's plan for delivery? Does he plan to complete project in one go or phases? If it is phases then what is the plan to demarcate your phase or is it going to be living on a construction site till developer completes the project?
Check if the project has a masterplan and if the same being followed on site.
Does the developer have approval for the complete project or for just certain phases? When does the complete approval come?
Check the draft agreement of sale and sale deed. Do check if all the specs and amenities mentioned in the brochure have been mentioned in the agreements as well. All dates agreed by the builder should also be mentioned in this agreement.
When will the developer get OC for his project?
In case second sale properties are being considered then the following additional points need to be checked:
This should happen once most or preferably all of the above homework has been done to the buyers satisfaction. Look for all possible challenges / issues for the prospective transaction. Be aware of the same and take steps to close these issues / challenges or atleast mitigate them.
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