Being convinced of yourself that you are ready to go ahead & buy your own dream home, its’ time to move to the next step of finding out what you wish to buy, how to discover options, evaluate options, visit the projects, zeroing in on your most perfect match & then committing financially by booking that ‘CHOOSEN’ home waiting for you.

Based on my decade plus experience in real estate, I have designed a step-wise, process-based approach in discovering, buying & enjoying hassle-free possession of the house you will now call your ‘home’.

So lets rock & roll

STEP 01:MAKE A WISH LIST

Making your wish list is akin to writing the script of a story you have envisioned & is in your mind. Similarly in the wish list, you try to document all your aspirations, demands & features of the home you wish to buy & which would satisfy your emotional, financial & social aspirations.

Lets try to build a typical wish list. The list I have prepared may look quite exhaustive, but believe me, once you complete the exercise, you will be convinced of the need to draw up such a list.

– Now let us draw up your wish list. Go ahead & discover your wish. MY WISH LIST excel sheet to be attached here

 

STEP 02:HOME SEARCH – Project discovery & rating

 

The next step is to discover/find the projects whose product features are in line with your wish list.

You can find projects all over internet, social media & other online & offline media fighting to gain your attention. Most of the projects have a dedicated website or are in the company’s website. Most of the basic details will be available online & can help us compile the data without much difficulty. But the best steps that can be adopted to gain maximum data required can be as below. You can adopt your own methodology.

Best practice:

• Go to prominent online portals – say www.magicbricks.com,www.99acres.com , www.housing.com etc.
• Search for projects in the desired micro/market/location.
• List out the project.
• Check out project locations in Google Earth to understand actual placing, viz. neighbouring properties.
• Visit individual projects websites & gather required information as per wish list.
• You can do an online chat if available & get the required information if not available.

You can list out as many projects you wish to compare, but trying to build a list of top 10 suited projects would be a great idea.

Exercise – Lets rate projects on a scale of 1 to 10 against desired features as per our WISH List. One being the least available & 10 being the exacting match available.

STEP 03:Understanding payment Schemes offered by property sellers:

Depending upon the nature of development/construction, the completion timelines, funding options of the buyer and the inventory absorption trends, the builders from time to time come out with multiple offers to attract buyers into buying their projects. The payment schemes also depend whether the project is in a pre-launch phase, launch phase, under-construction phase or ready for occupation phase.

In any kind of payment plans, the buyer pays a certain amount during booking, usually 5 to 10% of the purchase value and another 15 to 20% of the value at the time of executing the SALE/CONSTRUCTION agreement, which is time-linked, usually 15 to 30 days from booking.

Thereafter, the rest of payments are spread out over the period of construction. The plans can be either:

1. Time-linked payment plan:

Under this plan the builder offer a time-linked payment schedule to the buyer irrespective of the construction status. Typically, the payment milestones are time-locked.

Here is an example:

Where TSV is the Total Sale Value & GST is Goods & Services Tax

2. Construction-linked payment plan:

Under this payment plan/schedule, the builder offers a construction linked payment offer, wherein each trench of payment is linked to a completion of a certain construction milestone. Below is the example

In case of time-linked plan, the payments are spread out over a fixed time schedule, irrespective of the construction stage/milestone.

In case of construction-linked payment plan, the payments are spread over the construction period & every trench is released after completion of the agreed construction milestone.

Subvention schemes:

The most popular payment scheme talked about in the market these days is the INTEREST RATE SUBVENTION SCHEME.

Under this scheme, the buyer, builder & the banker gets into a tripartite loan agreement, wherein the buyer pays initial contribution of say 10 to 20% of the property value & he need not pay anything till the buyer initiates the handover & registration of the constructed home to the buyer.

The scheme can be either be:

• Zero interest cost to buyer till offer of possession by the builder – Here the builder takes complete responsibility of paying the Pre-EMI of the buyer.
• Time bound subvention: Here the builder/developer will bear the interest cost for a particular time line, say 2 years into development of the project.
• Buyer & Builder share interest burden: In this scheme, the buyer & developer share the Pre-EMI burden in an agreed ratio till an agreed period as per loan offer.

V. PMAY – CLSS (Credit Linked Subsidy Scheme)

How it operates:

This is a Govt. of India scheme introduced in 2017 to give boost to the sluggish housing & Home Loan market post demonetization. Under this buyers qualifying under a set of parameters are eligible for an interest rate subsidy from their home loan & the amount eligible is credited to the home loan account outright, thereby helping the buyer in terms of lower EMIs & tenure.

We will discuss this in little more details under the next major TOPIC. Below is the latest summary & applicable dates as on August 2022

STEP 04: PRE-SITE VISIT INTERACTION WITH BUILDER/DEVELOPER

After you have listed out the best available 5 or say 10 projects, its time you start interacting with the concerned sales team to gather any missing information from your wish list.

You normally end up filling a form that will be routed to the concerned builder’s team, who are normally referred to as PRE-SALES team. This team’s job is usually a sales-driven, & target-oriented. Their primary objective would be to make you agree for a SITE VISIT with least effort in sharing all your required information. They will tell you that all your doubts & required information can be shared during the site visit & will ask you to agree to a site visit at their own expense viz. arranging the transport to & from the visitors to your existing home.

It is always advisable to extract & make them share information you want before you are sure of the ratings you have arrived at so that you can avoid visiting unqualified projects as per your project options list.

It’s always good to corroborate the information you have gathered externally with the information they share with you to check for the consistency of information that the builder shares across all channels.

Also, please have an check on the consistency in terms of their follow-ups at agreed times, promptness in sharing information, consistency in the nature of information etc. to gauge the professionalism of the builder & their work culture.

Once you are satisfied with the nature of information you have extracted & the features of the project confirming to your wish list, its’ time to confirm the SITE VISIT to the builder & schedule it accordingly as per your convenience.

STEP 05: THE SITE VIST 

Having convinced on most of the features meeting your parameters as per the wish list, short listing of preferred projects & after interacting with the Pre-Sales time, its’ time to check out your shortlisted projects in flesh & blood i.e., in person.

A. Few tips on visiting projects

• Always have an extra time bandwidth – you may have to spend some extra time to get the required information you need to make an informed decision.
• Try your best to visit the project with all the decision makers as much as possible so that you do not end up visiting the project again & again to show it to your family decision makers – Please remember, re-visits are not usually sponsored by the builder.

B. Interacting with on-site sales team – Dos & Don’ts

• Always ensure that you are speaking an authorized sales representative of the builder/builder.
• Its’ always good to allow the on-site sales team to walk you through the project rather than bombard him with questions outright. Once he is done with his presentation/talking, you can pitch/revert to him with all the questions you want to ask.
• Its’ good to ask questions on the vintage of land ownership, statutory approvals, construction commencement, current stage of construction, planned hand-over timelines, delays predicted, if any,& their reasons, completion/occupancy certificate etc. Please insist on referring to any documents available with respect to the above points.
• Try to best to examine the Mood Board (a display panel where specimens of listed specifications are fixed and displayed) to understand the brands & quality of products used.
• Let the sales team explain in detail the various components of the price/cost sheet.
• Ensure you collect the PRICE SHEET & a detailed brochure before you leave. Collecting copies of any legal or statutory documents would be an added bonus.

C. Visiting Model Flat/Apartment

This is where all the glitz & glamour is shown to influence your decision making. Never fall for the quality of interiors you are presented with. What is important in checking out in the model flat/apartment are as below & need top concentration.

• Try your best in superimposing the floor plan with the actual location of the apartment you are looking for, at the planned floor no, the direction & the tower placing.
• Check for natural ventilation & lighting as there can be much artificial lighting used.
• Check out the specifications closely along with their brand names wherever available – like floor tile size, skirting height & tiling, floor to wall height, thickness of sajjas, smoothness of plastering, power points, frames & shutters of doors & windows, ceilings, kitchen platform thickness, dadoding, taps & mixtures brands, commodes & heal facets brands, quality & functionality of modular kitchen if offered as standard, balcony railing finishing & gauge etc.

STEP 06:THE BEST TWO

After all the hard work, right from creating your wish list to completing the site visit, it is time to sit back & re-analyze your ratings of the project to arrive at the best two. You can have best 4, best 5 or best 6, but the more you shortlist for final analysis, the more confused you may be left with. All your efforts have to be in re-assessing the shortlisted projects based on your site visits & the information you have gathered & documented. The best two homes cut the clutter & helps in arriving at the CHOOSEN one more productively.

STEP 07:THE NEGOTIATION

After you shortlist the best 2 or 3 home options & move ahead with negotiations with the builders, its’ always better to understand the COST/PRICE sheet better to check for all kinds of costs involved & any hidden charges that can be noticed. Let us check out a typical cost sheet:

THE BUILDER PRICE   

THE  BUYER’S PERCEIVED PRICE

The builder price is Rs 4,590/- per sq. ft. in this case, if you exclude statutory taxes.

The builder will, in most scenarios, expect that you will negotiate with him for a price discount & finds ways to load additional costs so that his margin is secured.

On the other hand as a buyer, you expect the developer to offer a price discount that you have in your mind. Its’ always good if you adopt a logic process to arrive at the fair price you are ready to shell out & can be discussed with the developer your justification of the price you have offered to him.

Let us try to analyze what a fair price can be according to the buyer. This is purely indicative & the buyer can add as many factors he deems fit to calculate what can be termed as ‘THE BUYER’S PRICE’

Let us check out a sample BUYER PRICE sheet for the same apartment.

In this working, the builder has loaded a net profit of 13.8% on overall cost to arrive at his selling price.

PAYMENT SCHEDULE:

A Typical payment schedule for a under-construction apartment would be as below :

SUBVENTION/DEFERRED PAYMENT SCHEMES:

We have already discussed how subvention schemes work under TOPIC 03: The Funding Plan.

Any scheme that defers your payment till the possession/registration is heavily loaded with the interest costs as the builder bears your pre-EMI payments & pays to the bank concerned

Once you have arrived at YOUR PRICE, its’ time to start negotiating with the sales time. Its’ good to communicate your intention to book the home to the buyer & seek meeting with the highest decision maker in terms of pricing so that the negotiation time can be reduced.

STEP 08:BOOKING – THE COMMITMENT

Hurray!!!!

You have discovered “YOUR CHOOSEN” home at ‘YOUR PRICE’

It is time to get into the transaction mode, which gets more critical & gestational from here on. All actions, from booking to possession, are legally executable & binding actions governed by certain rules & terms agreed upon by the buyer and developer, which are generally compliant with statutory regulations namely RERA & other judicial authorities.

BOOKING/EXPRESSION OF INTEREST

The first step to buying a residential unit in a group housing project developed by a builder is filling, signing & submission of Application/Booking Form of the builder. This form is statutorily binding till the buyer & the seller execute an Sale/Construction Agreement.

This form is also called as an Application form as it describes the interest of the buyer in purchasing certain residential unit & the purchase confirmation is subject to fulfilling certain terms – both by the buyer & the seller.

The buyer’s fulfillment of paying the minimum booking amount as described in the payment schedules discussed & agreed up during negotiation state.

At the same time the seller has an obligation to receive & acknowledge the booking payment & issue a receipt that gives complete breakup of the cost heads charged by the builder.

As sample Booking Form is attached – Please read closely all the fields to be filled up by the buyer as well as Terms & Conditions set by the builder. In the real scenario its always advisable to collect the Booking Form from the seller/Builder & take a day to read all the fine print, because at time, the terms & conditions will be heavily favorable to the Builders.

Good practices while booking:

• Its’ always recommended to negotiate for minimum booking amount if it is a non-rated builder/developer.
• Get written confirmation (at least on Email) from the builder that the bank account to which the payment has to be made is the RERA-mandated escrow account for depositing 70% sale receipts.
• Ensure that the Application/Booking Form is completely filled by you wherever necessary.
• Ensure that all the cost components are individually captured in the Booking Form. There should be separate fields for basic cost, car park, PLC, floor rise, amenities, other charges etc.
• All terms & conditions agreed upon & excluded in the Booking Form clauses should be documented as an ANNEXURE & jointly signed by you & the builder/representative.
• Ensure the completely filled & signed booking form along jointly-acknowledged payment schedule is scanned & shared with you along with the Expression of Interest receipt.
• Ensure a set of Legal Documents are handed over to you within 2-3 working days from clearance of your payment.
• Ensure allotment letter is issued to you within agreed period.
• Ensure a clearly defined escalation matrix is shared with you, at least over mail.