How Builders are Not keeping their Promises in Real Estate

POSTED BY manish ON July 31, 2009 COMMENTS (5)

Deepak Shenoy came up with a very nice article on How Builders are not keeping there promises while delivering the Residential Properties. He shares his views on Why it does not make sense to buy Real estate currently at idiotic prices level currently .

He also links to another article of this where he compares Renting Vs Buying a Flat. I am embedding the same video here which he has on this Excellent article. Have a look.

My take on the Subject

I am not a big Real Estate expert my self , but from Financial Planning point of view I have to say that Buying Home is an Important decision and we should look forward to it , but never at the cost of putting our self in a situation which can become disaster for our self. If you earn 50,000 per month, it does not mean you go next day and buy a Flat where you EMI is 40,000 .

Most of the people do not concentrate on Long term and have a short term view . Buying House needs planning and consideration of various factors . You need to find Value in the property which you are buying , just don’t see the value . A property worth 40 lacs may look Cheap , but its worth still be less than its price . Do you know the Formula to calculate the EMI on home loan ?

Given the uncertainty of Stock Markets in near term and no big improvement in Real – Estate sector , I am myself still not excited in Buying anything in real-estate (the main reason is that I don’t have much money).

Mohit Satyanand says

“I wouldn’t put money into real estate unless it fulfilled three conditions—

  1. It is a property I would be happy to live in.
  2. I could put down at least 25 per cent of the total cost;
  3. The EMI is less than half of my monthly savings.

With those conditions, it would be unlikely that I would exit the investment; not finding a tenant wouldn’t upset me; and with the balance of my surplus income, I could continue to build a nest egg of other assets. Read full Article

This view can look like a pessimistic views at first, but in the long run, these things pay off. Don’t take much risk that you are not alive next time to take another is the Funda you should Remember.

Please comment on what do you think about the Real – estate sector currently in your City. Also do share what is the most important thing one should look at before buying a Flat?

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5 replies on this article “How Builders are Not keeping their Promises in Real Estate”

  1. Thanks for sharing this insight with all of us Siddarth !

    Manish

  2. Amazing Grace says:

    It is due to the government unable to lay down and enforce strict laws because of which builders escape all this.

    I just cannot describe the pain I have gone through buying a flat in Salarpuria Phase 1.

    Most of the amenities are not complete, and the clubhouse will come up only at the end of phase 2.

    There are 2 basement parkings and the worst have been allotted to those who purchased the flat early. The best ones have been marked under management quota. People who have purchased 2 individual car parks have got a back to back one.

    Many flats have vitrified tiles instead of wooden flooring promised in agreement.

    Builder never responds to emails.

    In general Salarpuria is reasonable if there is a construction problem.

    One of guys I contacted on mailing list is even suspicious of the no-pre-emi scheme (80-20 scheme). Initially, the builder told that there will be no pre-emi till possession and took 20% of the money. Delayed the agreement beyond a month and then put in the agreement that it is for 18 months.

    1. Thanks for sharing your experience about Salarpuria ! . Sorry to hear about the issues, I think these things are a general problem with underconstruction properties !

  3. Anonymous says:

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