Mistake 1: Deposit or advance taken by promoter without first entering into agreement for sale.
As per law, Builder should not accept a sum more than 10 percent of the cost of the apartment, plot, or building, as an advance payment or an application fee from the buyer without first entering into a written agreement for sale with the buyer.
Mistake 2: Paying token before the loan is approved
There are a considerable number of buyers who don’t have the home loan approved on time. And paying advance before home loan approval is much riskier, and to get a refund may get caught up in legal cases or disputes.
When the buyer does not verify the document and is not aware if the house has all the requisite clearances would put the buyer victim to unprecedented fraud.
Several builders are slashing property prices but simultaneously increasing the maintenance and other charges quietly. Buyers should do the due diligence in terms of comparing prices in projects from the same locality. Pay attention to internal/external development fees, preferential location charges, parking/club/statutory charges, and service tax, which escalate the total cost. Ask for the final cost of the property.
Super built-up area always cost more than those based on the carpet area. It is better to insist that the builder quotes a rate based on carpet area. The carpet area of the flat could be 30 per cent less than the super built-up area. It is advisable to always go by the carpet area. If you are looking to buy a plot, check how much land (built-up area).
Ranging from commencement certificate for work, environmental clearance and approved building plans. Also, ask for the status of the land title and see if the builder has bought the land or has just development rights for it. Here is a list of documents you should check. (a). Title Deed (b). Release Certificate (c) Check Encumbrance Certificate (c). Verify land use (d). Approvals by Local Body (e). Property Tax Receipts (If you are buying a property for resale).
Mistake 7: Getting lost in Hidden facts from list of banks financing the project
Banks do not finance real estate companies developing on unsold inventory and not having enough cash to complete their projects. There are many builders which do not get bank loans at all. And, the project remains dormant in future.
Mistake 8: Background check on the Builder
The piece of land in question may be under litigation. Hence, it is recommended that you do an extensive verification of the builder. You could verify its past or current projects or even post queries on the various online real estate forums.
Mistake 9: Buying property thinking they will use rent to pay EMIs
The rental yield on residential properties is generally only 2-3 per cent. Moreover, the property may remain vacant for months before you can find a tenant. Every buyer who has entered into an agreement or sale to take an apartment, shall be responsible to make necessary payments in the manner and within the time as specified in the said agreement for sale and shall pay at the proper time and place, the share of the registration charges, municipal taxes, water and electricity charges, maintenance charges, ground rent, and other charges, if any.
Mistake 10: Ignoring Research on all Payment options
There are various payment options available in the market such as down-payment plan, flexi-payment plan, construction-linked plan, guaranteed rental schemes and possession-linked plan. Customers must also understand that any late payment or default on the part of the builder in such schemes will impact their credit history.
Mistake 11: Ignoring Matching the Brochure Layout and Site Layout
The layout in the brochure could be different from the reality. So, do a thorough site visit before booking the property. Interact with people in the neighborhood as they may know about any illegal occupation or other legal disputes related to the property.
Mistake 12: Not having a thorough check if the sanctioned plans and project specifications by the promoter are exact
Any additions and alterations in the sanctioned plans, layout plans and specifications and the nature of fixtures, fittings, and amenities, without the previous consent of the buyer. Provided that the builder may make such minor additions or alterations as may be required by the buyer.
Mistake 13: Missing on the Conveyance deed during Transfer of title
During hand over the physical possession of the plot, apartment of the building, the builder should execute a registered conveyance deed in favour of the buyer along with the undivided proportionate title in the common areas to the association of the buyers or the competent authority.
Mistake 14: Not fully aware of rights when Builder does not complete on time
Buyer shall be liable on demand to the buyer, the builder is to return the amount received by him in respect of that apartment, plot, building with interest. Provided that where a buyer does not intend to withdraw from the project, he shall be paid, by the builder, interest for every month of delay, till the handing over of the possession.
Mistake 15: Missing out on getting Occupancy Certificate
Buyer shall take physical possession of the apartment, plot or building within a period of two months of the occupancy certificate issued for the said apartment, plot or buildings.
Mistake 16: Lack of Awareness that the builder is punishable for sharing false information
If any promoter provides false information or contravenes the provisions of section 4, he shall be liable to a penalty by law, which may extend upto five per cent. of the estimated cost of the real estate project.
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