Good info for Apartment Buyers

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read today's Economic times, which gives couple of useful information for the apartment buyers about their rights in therms of pricing and amenities related. couple of points it mentions is.

Home in the works? Know your rights

Builders may tempt you with special discounts in their housing projects. But before you fall for such offers, you ought to ask the right questions, advises Vidyalaxmi

BUYING a house is one of the biggest financial commitments today. Many developers offer to sell apartments during the construction phase. Buyers are tempted because of the discount to current market price and the attractiveness of the show flats on display. But remember, there is a trade-off. While you get a discount for the under-construction flat, you are also undertaking the risk of timely construction. If you are a potential buyer of under-construction property, you can deal with the risks better with some information on hand.

PAYMENT MILESTONES

If you have a choice, opt for the property that allows you constructionlinked payment plans. If construction is stuck half-way, there is no pressure on you to make future payments. “Lenders are happier funding by this route. It gives both the buyer and the financing institution greater comfort levels,” says Ashutosh Beri, managing director — Property & Asset Management, Jones Lang LaSalle Meghraj.

INTERIORS MATTER

Most developers who have construction-linked target, link the instalment to casting of slab. Over 80% of the payments are required to be completed by the time the slab structure is in place. In reality, given the technology used today, the slab casting gets completed in no time. While 80% of the construction time is taken in doing up the rest of the work.

TIME-LINKED NOT LEGAL

During the boom, many builders shifted to a time-linked payment plan. So a customer was required to pay even if the developer didn’t show any signs of progress in the project. But many developers were caught on the wrong foot as the law of the land widely advocated for constructionlinked payment plans.

DEVELOPER FUNDING OF EMIs

Post financial crisis, some builders started offering schemes where they pay the EMI of under construction properties. “After 2-2.5 years, the builder would ask the borrower to take care of the EMI payments as the project would near completion,” said Gulam Zia, National Director — Research & Advisory Services at Knight Frank India.

INVESTORS BEWARE

If you are buying an under-construction property as an investment, you would be exposed to liquidity risks. Until there is a conveyance or a co-operative housing society formed by home buyers, investors cannot re-sell their flats without a no-objection certificate from the developer who might ask for transfer charges for the same. Investors in a Central Mumbai property are facing a demand for transfer charges amounting to Rs 2,500 per square feet from the builder.

DOWNPAYMENTS RISKY

Here you are actually getting into the tricky area of financing a builder. Probably a builder who is not creditworthy enough to get a loan from mainstream lenders, which is why he is willing to offer discounts up to 25% for those who put up the cash. It’s a bad choice for customers as there are many projects that have not see the light of the day.

read the attachment also.