Shweta Jha, a journalist, was house hunting in Bengaluru. After a lot of research on the market, upcoming locations and price comparison, she finally zeroed in on an apartment in Outer Ring Road. The developer had openly advertised the lowest basic sale price (BSP). With Jha’s budget constraints, the apartment worked out ideally. That was till she met with an informed lawyer who made her aware of the comparative price chart and additional costs the developers in the market levy on BSPs. She got to know that the developer had levied so many additional costs that it was actually the most expensive project in the area. “As a journalist, I am conscious of the fact that there are exaggerations in all developers’ marketing brochures,” states Jha. “My property hunt also taught me all about what they try to conceal. The worst part is that there is a conspiracy of silence by builders, against the additional hidden costs,” she says. Developers exaggerate some USPs of their projects; however, a closer look also reveals that they smartly conceal some information to make their offer look even more lucrative. Here is a list:
Lower BSP
The price developers quote sounds most affordable to home buyers. However, in reality, it is exclusive of mandatory additional charges like PLC, club memberships, parking, electricity, fittings and many others. They deliberately keep the BSP low, to appear to be the most reasonable project around. Additionally, a developer will get away with paying a lower brokers’ fee, that’s subject to a project’s BSP.
Loading percentage
No builder wants to advertise the loading percentage. This is the actual carpet area that will be used against the super built-up area that one is paying for. This includes stairs and other common facilities. In many cases, the loading is astronomically high, to the extent of even 40 to 50% of the property’s value.
See also: Maintenance charges that buyers need to be aware of
Management costs
The marketing brochure often says the facility management charges, will be decided at the time of possession. The builders prefer to be silent on this because many facilities, such as an amphitheatre, etc., are great selling propositions for a select set of buyers but not usable for most. However, the cost of facility management has to be borne by one and all.
How can the home buyer make a safe investment by conducting their own due diligence before making the purchase decision? Surabhi Arora, associate director, Research at Colliers India, suggests that one should always do a location visit before making any financial commitment. She recommends buyers check the status of various infrastructural projects that the marketing brochures mention; for example, the future metro connectivity, flyovers, etc. “One should ask about the amenities that the project will provide in the name of green, luxury, smart homes, etc. Ask for the total cost of the project, including all the other charges, stamp duty, etc.,” opines Arora. “If you are considering more than one project, compare offerings like flooring type, doors, windows, fittings, provisions, etc., and amenities such as play area, garden, car park, club house, temple, etc. It is also important to check the built-up and super built-up areas,” she advises.
(The writer is CEO, Track2Realty)
Ravi Sinha is a journalist with nearly two decades of cross-discipline media exposure. He is the CEO of real estate think-tank group Track2Realty. He has been writing extensively on the real estate sector for nearly a decade. Evaluation of real estate brand performance is his expertise and he has immense insight into consumers’ psychograph in the property market.
Twitter: https://twitter.com/ravitrack2media
