Table of Contents
During festive periods, developers try to cash-in on the positive sentiments, by using offers and discounts to attract property buyers and to push sales. Nevertheless, home buyers should remember that no developer would ever sell the property below its cost price or without earning a profit. One should never buy a property merely because of a discount or offer associated with it, cautions Prabhat Ranjan, CMD, Olympeo Infrastructure Pvt Ltd. “The status of the project, the credibility of the developer and customer’s requirement should be the primary factors,” advises Ranjan.
In addition to discounts, some developers may also offer to reduce or waive the stamp duty and registration charges and brokerage that are collected from the buyers. Other innovative options include offers of gold coins, furnishings, travel vouchers, club membership, free cars and even free flats.
Deceptive offers to attract the property buyers
Rohan Bulchandani, co-founder and president, Real Estate Management Institute (REMI) and The Annet Group, warns against several misleading offers in the market. Free parking space, is one example. “Many buyers may not know that car parking areas are part of the common area of an apartment complex, and that there is no additional charge for car parking, he explains. Several builders also offer pre-EMI schemes for a specific period of two years, which is the estimated time taken to deliver possession of the property. Under such schemes, the buyer does not have to pay any EMI for the specified period. However, the prices of the properties linked to such offers are usually tweaked, to compensate for the pre-EMI period. Despite this, such schemes still attract buyers. If the project is delayed, buyers will have to make the payments beyond the fixed period. This dilutes the value of this scheme,” Bulchandani points out.
According to experts, some common marketing gimmicks that developers resort to include:
- 20:80 scheme: Pay 20% amount at the time of booking and 80% during possession.
- 5:15:80 scheme: Pay 5% amount at the time of booking and 15% during possession; the balance 80% is financed through a loan and the buyer pays the EMIs.
- Price linked to the total number of applications received from potential buyers: Works on IPO subscription style and the final price is ascertained on the basis of applications submitted for the related property.
- Assured rentals for the starting 2-3 years.
- Attracting buyers by showing up-market model flats.
Things to keep in mind while buying a home during offers and discount period
Buyers should first check, whether the project is approved by a major bank or financial institution, as this will ensure that the due diligence is already done. Second, the developer should have a solid track record of delivering good quality apartments on time, with the promised amenities. Third, ensure that as a customer, you thoroughly understand all the costs, including the festive freebies and offers.