Whether you are buying a house for end use, renting or investment purposes, the selection of a developer should be made after considering various factors. Several developers, including new and seasoned players operating in the real estate market, try to garner the attention of customers through attractive deals. It could be challenging to make a choice, especially for first-time buyers. In this article, we share a few tips that will be useful in choosing the right developer for purchasing a property.
Established or small-scale builders
| Established builder | Small-scale builder |
| Established builders are more likely to have RERA registration | Small-scale developers are less likely to have RERA registration |
| Generally considered more trustworthy | Usually less credible |
| Guarantee of quality construction | Possibility of lower construction quality |
| Resale value of their properties tends to be higher | Properties may have lower resale value |
| Reputed developer would be expensive | Lesser-known developers may be relatively affordable |
| They offer more amenities in their projects | They may not offer many amenities |
Things to consider when selecting a developer
RERA Certification
The foremost thing that every property buyer must check is whether the builder is registered with the Real Estate Regulatory Authority (RERA) of the respective state. According to the RERA act, it is mandatory for all developers to register themselves with their state RERA. This aims to safeguard the interests of the buyers in the event of any delays, incomplete projects, substandard construction or other challenges.
Credibility
Going with a reputed developer may mean fewer hassles as the company will be more trustworthy compared to a new entrant in the industry. Typically, such developers have years of good track record. This does not imply that lesser-known developers may not be reliable. However, a buyer will have to check the builder’s history and track record before making a choice.
Price
Cost is one of the major factors that most buyers would consider. Investing in a property by a recognised brand may be more expensive than that of a small-scale or lesser-known builder. On the other hand, small-scale developers mostly cater to buyers looking for properties in the affordable price range. However, such projects may have many facilities. Thus, one has to weigh this factor as well when finalising a property.
Construction quality and amenities
Luxury projects are often synonymous with high-quality construction compared to those delivered by new entrants. Moreover, established developers are likely to offer additional facilities, thus fulfilling the needs of modern homebuyers. They are likely to provide guarantees on the interior fittings. Thus, the cost, facilities and quality are some factors that must be considered.
Better maintenance and upkeep of property
Established developers are likely to assure their customers with well-maintained properties, given their experience in offering after-sale support to their clients. From the start of construction till the time of handover to the housing society, the developer is responsible for maintaining the facilities since their reputation is at stake. Some builders may also support Residents Welfare Associations (RWAs) in managing project facilities such as club house, golf course, swimming pool, kids’ play area and others. Thus, it is necessary to check if these advantages are available if one opts for a small-scale builder.
Higher resale value
Due to their market standing, experienced developers may manage to conduct business even when there is a downturn. Their projects are likely to have a higher case of under-construction properties, and investors resale value. Even from an investment point of view, buyers prefer to go ahead with established builders. So, it is necessary to be aware of this point when choosing a developer.
Challenges faced by small-scale developers
There are several small and medium-scale builders that are operating in the real estate industry, and they form a significant portion of the developer’s community. For many builders, it has become challenging to comply with stringent guidelines and compliance after the introduction of RERA which is aimed at regulating the industry. Many players are looking for ways to overcome such challenges and survive in the competitive market. There are many small-scale builders who are going for joint ventures, merges and collaborations with established players. Other popular strategy is the forward funding model adopted by many market players. In this model, a builder can buy a land parcel and fund the development of properties with a third-party lender who makes payments for each stage of construction.
| Got any questions or point of view on our article? We would love to hear from you. Write to our Editor-in-Chief Jhumur Ghosh at [email protected] |
Harini is a content management professional with over 12 years of experience. She has contributed articles for various domains, including real estate, finance, health and travel insurance and e-governance. She has in-depth experience in writing well-researched articles on property trends, infrastructure, taxation, real estate projects and related topics. A Bachelor of Science with Honours in Physics, Harini prefers reading motivational books and keeping abreast of the latest developments in the real estate sector.
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