Be Careful When You Buy Your First Apartment - IndianMoney.Com

 

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Be Careful When You Buy Your First Apartment :

The home loan interest rates have fallen and you want to buy your dream apartment.You generally buy an apartment only once in your lifetime.

This means you have to be very careful while buying it.A mistake while selecting your apartment can haunt you for a lifetime.

Check the title of the land:

 
The builder needs to have the title deed showing the ownership of the land. The title of the property needs to be clear and marketable.The builder then needs to get approvals from the municipal and other authorities. 

This is very necessary to start construction on the land. Approvals from the water and electricity board and environmental clearances are a must.The approvals for the building structure, the floor plan and the safety audit of the structure needs to be done.

Get a written commitment:

 
You need a written commitment (clause) from the builder clearly stating the payments, the time when construction is complete and the flat will be handed to you, as well as a penalty for the late delivery of the flat.

Check the background and reputation of the builder:

 
Check the track record of the builder. Has he been successful with his projects (constructions) in the past? 

Does he have the finances to complete the project?
How many projects has he delivered and in what time? 

Has the builder been involved in any litigation (legal feud) in the past?

Be aware of the cost of the apartment:

 
The cost of the apartment depends on its location. If it is in a posh area its price will be high.The builder gives you the price of the apartment as the basic selling price (BSP).Any extra amenities offered are charged separately.

The builder might offer you a discount (some builders offer gold coins) for the purchase of the apartment.Compare rates and discounts offered by other builders as well as the cost of similar projects in the area before going ahead with the decision to purchase the apartment.

Know the payment terms:

If you are purchasing an under construction flat check for the :

Down payment
Construction linked costs
Flexi payment costs.
You have to pay around 10-15% of the cost of the apartment at the time of the purchase. This is the down payment for the apartment.

Builders ask you to make a down payment at the time of booking of the apartment (10-15% of the cost) and another (70-75%) within a couple of months after booking the apartment.

You make the remaining payment at the time you take possession of the flat.
This is a highly risky method of making the payments as you are stuck if the builder delays the construction of your apartment.

You could opt for a construction linked plan where you pay 10-15% of the amount as a down payment and the rest of the payments are made as each level of construction is complete.

You could opt for the flexi plan where 30-40% of the payments are made as a down payment and the rest as each stage of construction is completed.

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