Buying a house at the pre-launch stage at prices much lower than market price seems enticing. But buyers need to check several aspects before investing money in such residential ventures
Owning a house is a dream for everyone, especially the middle class. Earlier people wanted to buy a house after starting a family. Now youngsters are keener on buying property right in the early years of their employment.
This zeal has fuelled the market of just-launched properties or under-construction homes. Youngsters and new families often park their money in newly launched housing projects with minimal savings and impending home loans because typically such houses are available at 20-30 per cent discount as compared to the ready-to-move-in homes in the same locality.
This proposition may sound exciting but there are many pitfalls too. One is investing in a property that is yet to come up. There are doubts about its quality, amenities and location benefits till possession.
The concerns vary – is it fine to make such an investment? Are there potential risks involved? Here are a few pointers one should keep in mind when investing in under-construction property:
1. Validate all clearances –
Check all clearances like authority approval for the project, There are close to 40-50 such clearances but they should all be carefully studied before considering the property.
“The prices of pre-launch and under-construction property in Noida are attractive and as the project completes construction, rates goes up significantly,” says Narendra Diwedi of Ojaswi Associates, a property advisor and consultancy firm in Sector 19, Noida.
“People get attracted by the lucrative prices and miss checking primary documents like clear land ownership, sales deeds and approvals from Noida Authority for construction,” he says.
2. Know the RERA Act 2016
As per the recently applicable Real Estate Regulatory Act 2016, no pre-launch selling of realty projects is allowed until the project has all approvals from the local development authority or without obtaining registration from the regulator concerned. This law is applicable on all incomplete projects in the city. You need to do little bit of homework at this stage and it will help you make independent legal assessment.
3. Keep a vigilant eye
The Noida Development Authority keeps issuing notification about the projects whose plans or layouts are yet to be approved.
“One needs to choose wisely which segment one wants to invest in — commercial or home. If you already have a house, the better deal would be to invest in commercial spaces, depending upon your choice,” says the spokesperson from SRS Group.
The location of the project should be kept in mind. Checking the profile of the builder is also a must.
“Always keep a track of previous projects, their timely delivery, build quality of previous projects and word of mouth,” says the SRS group spokesperson.
4. Beware of lucrative offer: Offers by the builder like 70:30 or 90:10 should be thought of wisely.
5.The penalty clause and the time frame should be on your checklist.
|• Builders bring pre-launch scheme to start generating cash flow
• Such launches are 25-30% cheaper than average market rates
• Check whether the project is approved by major banks or not
• If clearances get delayed, construction will be delayed and leaves impact on cost
• Always ask for proof that builder has obtained all clearances
• Obtain written assurance from builder of your booked unit and apartment details
• In case possession is delayed, you must consult a property lawyer
• Get all payment receipts