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Timely possession remains a major concern for home buyers, who opt for under-construction properties. On the other hand, owing to high real estate prices, home buyers are often forced to opt for under-construction projects, to stay within their budget. Sensing an opportunity, several property sellers are now offering a guaranteed delivery, by charging a premium.
“Time-bound delivery, is what builders should provide by default. It is their duty. However, now, they have started charging a premium for a timely delivery,” laments Bhashkar Goel, a home buyer from Gurgaon.
Experts point out that if a property is available at a cheaper rate, then, there’s always a reason for it. For example, under construction projects are cheaper but it entails losses on interest, for home buyers. There’s also a cost (both monetary and non-monetary), vis-à-vis the risk, efforts and the stress that such a purchase involves.
What should a buyer choose – price discount or immediate delivery?
Given a choice between the two, which one should buyers opt for?
“The answer to this question is not straight forward, as different buyers have different priorities,” explains Surabhi Arora, senior associate director – research, at Colliers India.
“If somebody is looking for end-use and living in a rented accommodation, it is wise to go for immediate delivery. However, if it is for investment purposes, then, one can choose to take a price discount,” Arora advises.
Points to consider before choosing between price discount and immediate delivery
When it comes to choosing between a price discount and immediate delivery, experts suggest that buyers should consider the following:
- Select an option, based on your priorities.
- Perform a financial calculation and a cost versus benefit analysis, of both the options. Take opportunity lost into consideration, while doing the cost-benefit analysis.
- Check if the developer is providing all the amenities, along with immediate delivery.
- Verify the security and infrastructure in the vicinity of the project.
- Check if the project is habitable or not.
Checklist before you finalise on a home
To lure home buyers, developers often offer attractive price schemes. Before finalising such deals, Ashish Raheja, MD of Raheja Universal, maintains that buyers should pay particular attention to five aspects:
1. Title: The project’s land title should be clear. The developer is obligated to provide a title certificate.
2. Commencement: One should check if all approvals are in place. The sum total of all approvals, comes to one approval called the Commencement Certificate. This should be a full Commencement Certificate not a partial one.
3. Layout: What are the other buildings that are coming up nearby, maybe now, or in the near future? Under what scheme is the project being developed? Is it a Greenfield development, where you will be sharing the premises with new residents, or is it a redevelopment, where you will be sharing it with old tenants? Also check whether it involves cessed structures, public parking, or whether it pertains to housing societies, slum redevelopment, etc.
4. Check the intangibles: the banker, the architect and other buyers.
5. Do not take a decision, based on the model flat alone. Perform a proper site visit. Even the number of labourers working on the site, can give a decent idea about the pace of construction.
What should buyers do?
Home buyers must do thorough research, check the track record of the developer and the credibility of the teams working on the project.
Check whether the developer’s prior projects, have been delivered on time and also read testimonials and online reports about the builder. If credibility is not a concern, one can consider taking price discounts for want of higher returns/ getting a better deal.