Some people buy a flat for their own use and some buy for the investment purpose, but for both it is big decision as it involves a huge amount of money and when you invest your so much hard earn money, you want to be sure that your investment is worthwhile.
So to ensure that you are making a right decision, you should gather the all possible information about the flat from all the sources or means available to you. There are various brokers, agents, consultants and dealers to explain each and everything to you but the difficult part is to know that you are not being “fooled” or “conned” by someone. To safeguard you from all such deceives and to help you in making a right choice, we will give you all the possible tips and tricks you should keep in mind. We hope you find it helpful.
- Location Analysis
- Builder Analysis
- Quality Analysis
- Project Analysis
- Legal Aspect Analysis
- Cost Analysis
- Final Step
1.Location Analysis
Location is the most important factor to be considered while buying the flat. When you choose the location, you should make the checklist of the following points and should give the weightage to these points on the basis of degree of relevancy of the points to you.
- Daily market facility (How far it is from your place, what all you can buy from the market)
- Hospitals and Doctors facility
- Public transport facility (How far is the bus stop/railway station from you place)
- Health facility
- Education Facility (What type of schools and college facility is available and how far are they from the location?)
- What is garbage disposal facility in the area?
- What is the pollution level in the area and what measures are taken to ensure the area pollution free?
- Crèche and Day Care center facility if the parents are working?
- How is the neighborhood? Is it a safe place to raise children?
2. Builder Analysis
Once you have decided the location, you need to identify the builders developing their projects in that area and the big thing is to decide from whom you should buy? In selecting the builder, you should consider the following points:-
- Background and reputation of the builder: You should check the background and reputation of the promoters. You can collect the information about builder from internet and newspapers. You should also personally visit to the builder this will help you to understand him better.
- Prior projects: Check out the prior projects done by builder and see what was the scheduled completion time period of the projects and in what time, builder had delivered the project.
And, if it is his first project, check out his prior experience in the different area, this will help to understand his commitment towards his work.
- Make sure that the builder has a sanctioned plan with all requisite government approvals.
- Check whether the firm has an international quality certification like ISO 9000 or is rated by companies like CRISIL and ICRA.
3. Quality Analysis:-
It is really important to analysis the construction quality. To analysis the construction quality, you need to check up on the reputation and quality of the people behind it such as promoter, contractor and architect of the construction.
One of the most important criteria is the material such as cement being used in the construction. Try to check up often, though surprise visits about the type of cement being used.
Check up on the thickness of the external walls. If they are 6-inches walls, it is not a very stable construction. A 9-inch wall is always better.
You must ask for a ‘performance guarantee’ clause or at least a ‘structural liability’ clause in the sale agreement. This will insure that the builder remains liable for any defect in the building for at least one to three years from the day he hands over possession to you.
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4. Project Analysis:-
Once you have selected the builder, you should analysis the project, whether or not the project meets your need and requirements. To analysis the project, you should examine the project against the following points:-
- Layout of the project: To analysis the layout plan of the project, you should consider the following points:-
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- Number of units
- Entrance of the building
- Facing of the building
- Distance among each units
And should find out how these units are different from each other.
- Flats Design: You should check whether or not flats are designed according to you needs. You should find out the answers to the following questions:
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- Are the flats designed according to Vastu?
- Are the flats fully furnished, semi furnished or unfurnished?
- Are there too many corridors in the apartment? You will be paying on basis of area. Corridors eat up room-area!
- Ideally, there should be at lest one common toilet so that the visitors do not have to enter your bedroom to use your bathroom.
- The kitchen, dining room and entrance should be close to each other. This ensures easy serving of food to guests etc…
- Ideally, the building design should include “curtain walling”. It is required to protect against “seepage” problems.
- Check the heights of railings, distance between each railing etc. from the point of view of safety of children.
- The builder might tend to design the flat such that the bathroom is close to the kitchen. This is done to reduce plumbing costs. But this tends to clutter up the house and reduces the ventilation of other rooms of the house. Make sure that this is not the case.
- Try to draw the furniture on the ground and see how much space is left free. Is the house too cluttered?
- Does the flat suit your life style?
- How are the flats in the society arranged? Is there privacy or can everyone see into your house?
- When people are talking in the flat next to yours, can you hear it in your flat? This would mean that your conversations too will not be private!
- Is there enough ventilation?
- How are the windows of the flat arranged? Does enough sunlight come into the house?
- Amenities: You should check the all amenities such as guard facility, crèche facility, security camera facility and etc. are being offered and how much will be the cost of all amenities.
5. Legal Aspects Analysis
This is really important to ensure that the building is free from any legal problems or building is legal. You should examine the following documents to ensure that building compiles all the legal formalities:-
- “Permitted use of the land” in the government records. Land CANNOT be used for real estate, unless it is “buildable” land as per government records.
- The Development Agreement with the landowner if the builder is not the owner of the property
- Commencement Certificate, which is issued by the local municipality to begin construction
- Completion Certificate given to the builder by the authorities when the building is complete and fit for occupation
- If purchasing a flat or house that is in the initial stages of construction, you would have to get an allotment letter from the developer.
- You should also find out from the land registration office whether the land has been sold or mortgaged to other parties, or whether any other fact has been left undisclosed by the owner of the land.
- If the land area is more than 500 sq. m. check with the builder on whether he has obtained the “ULC Clearance” for development on the land.
- Make sure that all the required property taxes to the municipality departments are properly paid and up-to-date! Ask the builder to provide you with the receipt of the latest tax payments to make sure that they are being payed.
There is a simpler way to go about all of this investigation. You see, most municipal authorities seek “clearances” and “no objection certificates” from the relevant departments before sanctioning a building plan. So, if a promoter/builder is able to show you a sanctioned building plan, this could indicate that the land is free from legal issues.
6. Cost Analysis
To find out how much the flat will cost you, you should consider the area of the flat because flats are generally priced on basis of area. The flat cost has generally the following components:
- Basic Sale Price (BSP): Nowadays, built-up area or saleable area is considered to calculate the basic price of the flat. It is charged on the per square feet basis.
- Preferential Location Charges (PLC):- It is charged on the per square feet basis and it is high for the best located flat such as you have to pay the high PLC for the Ground floor flat and the low PLC for the 7th floor flat.
- Additional Charges: Apart from the BSP and PLC, there are some additional charges such as Interest Free Maintenance Security, One time lease rent, External development charges and etc. Legal Charges: If you buy the flat, You will have to pay a “stamp duty” of 6% to 12% of the total cost of the sale. Besides that, you will also have to pay around 1% as registration fees.
All these cost increase the total cost of the flat, So, you should analysis all these cost component and analysis why the builder is charging this much cost.
7. Final Step:
You should get the best price by negotiate with seller, ask him to offer you a good percentage of discount. Having used all the above given points, let us assume that you have finally found your dream house.
The next step is to prepare the “agreement of sale”. It is an agreement that covers everything you have negotiated and decided and other legal formalities.
If the seller drafts the agreement, get it checked properly by your lawyer. Once the agreement is ready and accepted by you and the seller, you need to officially get the flat to be transferred to your name though the “registration” of the agreement though the Govt. Sub-Registar in your city.
Pay the money and the flat is yours.
Final Words…
This process is a little more “long-drawn” than it seems. However, it is not too complicated and you can easily ask your lawyer to help you with the process. What is more important is that you keep in mind the points discussed to take a more informed decision.