8 unbelievable tricks real estate agents play when you visit the project

POSTED BY manish ON August 28, 2015 COMMENTS (83)

I recently inquired about one of the plot schemes near Pune and finally visited their project. They sent a car to pick me up. When I reached the site, the staff there sounded very professional compared to some other experiences I have had in past.

While I had a good experience interacting with the sales person on the last project I visited, I realized that often that does not happen with many people. A lot of education needs to happen on this topic, because many investors who go to meet brokers for the first time or to do site visit are lured by some tricks and fooled a lot of times.

real estate tricks by agents

So I have created a list of points, which I want to share with all the prospective home/plot buyers. Some of these points are tricks played by agents, and some points are suggestions on what you should do when you meet a builder, broker, agent or sales executive who is showing you or explaining about a project.

Here are those points one by one

1. They create artificial scarcity and try to rush you

An year back, I got an email from one of the builders with the list of available flats, area, price per square feet and final price of the flat. Out of 600 flats in the project, Around 90% of them were marked as “SOLD” or “BOOKED” .

Just by looking at that, I got a “left out” feeling. It appeared as if everyone in this world is owning the plots and flats and its just me, who will be left behind. A voice from inside said – “Go, book that plot NOW, else you will regret all your life”

I had no way to verify if they were really sold or booked by someone. I just had to rely on what the excel sheet told me. This created a sense of emergency. The feeling I got was – “I need to hurry, else I will lose out on the opportunity”. Almost 80% of the time, this is artificially created by the sales executives.

See the table – 

sample cost sheet builder

If a sales executive tells you that you have a week’s time, multiply it by 10. That’s the time you generally have in real life. Some of the things you will hear from sales executive will be as follows

  • Sir, All the 2 BHK are sold except 3 units. You will either have to book it in next 10 days or go for a 3 BHK (they know you don’t have the budget for 3 bhk)
  • Sir, 58 flats are booked already in the pre-launch. This price is only for this Diwali after, which it will go up by Rs 300 per sq
  • This price is only available for this exhibition because of pre-launch offer, once the “actual” launch happens, the rate would be atleast Rs 100 more per sqft.

At times, you might really lose on some good opportunity in real life, but maximum number of times – its a sales trick. This is exactly the reason why they generally ask you to come along with cheque book, so that in order to not lose the opportunity, you will book the property right there and then by paying a token amount.

Note that this trick of creating emergency is a general sales trick and applies everywhere.

2. Don’t show the eagerness to buy

If you are seriously looking forward to buy the property and want to get a good deal, then do not show your eagerness to buy. Hide that over enthusiastic and needy person inside you.

Hide your temptation and do not show that you are dying to buy the property. The moment they sense, that you are already sold out in the game, it will be very hard for you to negotiate on pricing and other things, because they are very sure that you will not be stopped by minute points.

The agents/sales executives are paid commission on closing the deal and they will go to an extra mile to close the deal with you. Show them that you are not in hurry and your life does not depend on the property. Show them that you are a serious buyer who is not in hurry and if they have to win you, you will require a good incentive to invest money.

They will ask you for booking amount, token amount, they will give you “last date”. But don’t take a decision in hurry. Do all your investigation, scrutiny, and think on how you will arrange the money. Here is a nice comment from someone on the Indian real estate forum

Fully agree. Don't negotiate with fear in mind that this is your last chance, and so far nothing worked for you (frankly, if you have this fear, would suggest don't even bother to negotiate, and more so don't get into RE market). Be prepared to walk away right from the beginning. Don't buy builder claims that they are going to increase rates, all flats except one sold out, they have enough cash, etc.
Show them you are not emotionally attached and this is one of the many options. Also, don't close deal in first meeting (if you do, most probably that means you did not negotiate enough). Last but not least, you have all the negotiation power before handing over the money, once you pay them, your negotiation power is zero.
In general one who pays should be enjoying greater power, in reality we don't see that in RE market, more so in Pune RE. That was easy said than done, have tried it, and it works, key is patience.
As I said in the first point, most of the times the emergency is not real, its often the created one!. However, this does not mean that you delay things beyond limit, thinking they will come back to you all the times. If there are other leads who are ready to buy the property, you will not be contacted beyond the point. So keep a balance

3. Don’t get mesmerized by Sample flat or Jazzy brochure’s

Human visualize and fantasize about everything in life

This is the reason when you see jazzy brochure’s, the lush greenery, clean atmosphere and a world beyond reality, you visualise yourself living in the serene beautiful place which has no traffic, no tension and a all perfect life. I am yet to meet anyone with whom it has really happened 🙂

Please, do not do any booking only on the basis of the brochure, some presentation or looking at a sample flat.

Make sure you visit the actual project site and see the location, how well connected the area is city, how are the roads, what’s nearby the place and other important factors. A lot of people book properties in real estate expo and exhibition, which I don’t think is a good idea at all.

Real life example

I once met a sales representative who came to explain me about a project in WAI (near Panchgani, Maharashtra) and he sold a story which looked so amazing, that my inner self-was ready to book the property right then and there. I was so excited to take a look at the site.

However after a week, when I actually visited the site, all my excitement died because the reality was so different than what I had visualized. I must mention that it was not the sales executive fault here and he had not given any wrong information. In fact, he was a brilliant sales person and very professional.

The problem was me myself. I have over-estimated the greatness of the project and its location, because of the jazzy brochure.

jazzy real estate brochure

In case of residential flats, remember that the jazzy brochure and the sample flats are created to exploit the human imagination and sell you dreams. What you actually get in reality will not be exactly like sample flats you see.

You won’t believe, but there are professionals who are hired by builders to give mesmerising presentations to prospective buyers, especially NRI. Presentations are arranged in 5-star hotels and bills are paid in lacs of rupees. Here is one gentlemen explaining how it happens. Please see the video below

I am not saying that brochure’s are not important. They surely play a big role in marketing and you get a very good idea of what is the project all about, but go beyond that.

Judging a property by just looking at brochure is exactly like hiring an employee by just looking at resume.

4. Ask for the legal documents and regarding the basic amenities

You are probably doing one of the biggest investment of your life-time. Right?

If your buy something which is junk, you will regret it all your life. There are millions of people in India, who are dealing with legal issues today because the land they bought is disputed, the required sanctions were not taken and many other issues. So just don’t feel shy about asking legal documents. There is no hurry in doing the agreement.

Simply ask the sales representative to provide you all the legal documents, sample agreement copy and all approval related documents. For god sake, take the documents to a property lawyer and pay Rs 10-20k fees to consult him, before you buy that 75 lacs flat!.

The lawyer will check the documents and help you understand, if the project is totally fine or has some big trouble. Then you can take the decision of moving ahead or not.

It will save you a lot of money and energy in future. It’s not a very healthy sign if the sales person is constantly avoiding the conversation regarding legal documents or if he is hesitant in providing you a copy of the agreement.

Ask about surrounding area and the development coming up

Apart from the legalities of the project, you also need to enquire in detail about the surrounding area and what all development is coming up in future. Ask things like

  • Is some flyover planned?
  • Is some college coming up?
  • What kind of markets are nearby?
  • How far is bus stand?
  • How far is the main highway
  • From where will the water connection come?
  • What about electricity connection?

While you might not be able to verify a lot of things, but at least you can know about the basic amenities. Things like water is really a cause of concern

5. Say that you are seeing other nearby projects as well

Before you go to the project site, enquire about the other projects near by. Atleast, go to the websites of those projects and memorize the names, location etc. If possible enquire on phone about their rates.

Then, when you are talking to sales representative, share with him about all this. Let him know that you are an informed investor and if he has to win you as customer, you should be offered a good deal.

I can assure you, there is always a possibility of Rs 25-50 per square feet discount if you ask for it 3-4 times. Tell them that you had heard about the lower rate from one of your friends or tell them that someone else from their sales team had called them and shared about the lower rate few weeks back and thats the reason you are enquiring. The sales person always has that much margin in his hands.

The big boss always tells them – “If you see that customer will go away, offer him upto Rs 25-75 discount per sqft, but only in worst case”. There is nothing wrong in asking, the worst case is that you will not get it.

6. Don’t be tempted with awesome deals and discounts, they are well designed

So the builder is giving you are modular kitchen included in the flat? WOW .. Who is paying for it? Definitely not you! . Come on! .

It’s all included in the price. Instead of 49.5 lacs, he is charging you 50 lacs and giving away the free modular kitchen worth Rs 50,000. What’s so great about it?

Some builders in premium segment also offer a car along with the house. Book a Villa and get a car. Sadly, that means “My project is not able to sell, here is my last trick on you by offering you a bait”

Trust me, If I were a builder who is selling a 4.5 crore villa, I can also come up with such offers. Increase the price and give the car along with it. At the end, its the customer who pays the price.

offers and discounts in given by builders

Understand that whatever you are getting is funded by your money only. No one in their right mind, will give any kind of discounts or offers because they have a big heart. It’s all money game. It’s just a way to emotionally exploit you and make sure you feel great about yourself. Just because its bundled offer, it looks very good.

7. Ask which all banks have approved the project

A good way to filter a good project from a bad project is to see if its approved by many lenders or not. If all major lenders have approved the project, its a sign that the basic level checks are done by lenders and you can now trust the project more. It does not mean that you should not do your homework further, but the primary level of investigation is done.

If a project is not approved by any lender or some not so famous lender has approved it (just a single one), there is a possibility that something is fishy.

Probably some approval is not taken care of, or may be the land is disputed. You should also ask them if they have a good crisil rating. Go and check the pdf on crisil website for that project.

I lot of small time builders offer their own EMI scheme like pay 20% now and rest in EMI for 5 yrs . This happens a lot in plots especially very far from city. I am not saying that they are bad always, but you should be a bit cautious with them on legality factor.

8. Don’t get over obsessed with the “upcoming infrastructure”

There will be lots of promises (real and fake) made to you. You will listen about the lots of development projects, the ring road passing from that area, the grand temple coming up, the new wide road which is planned and many such things. Some of them might happen in reality, but not always.

real estate promises

A lot of plots schemes are sold as “Proposed NA” status (which means soon it will be approved for residential purpose) and the agents will tell you that they have put an application to convert the land from agricultural to Residential which will take just 1-2 yrs.

But don’t believe them blindly. Converting a land status is a big task and in most of the cases, it might take 10-20 yrs time or it might never happen. A lot of investors are stuck with the plots paying huge money which they cant use. Dont take decision in hurry.

Take your decision with caution

Real estate is a complicated investment and a lot of factors decide if you are making a right investment or a wrong one. As its one of your life biggest financial decisions, make sure you do not hurry and take your time. Everyone is there to make money out of you.

I would like to hear about your experience and what you have faced in life with different real estate agents and builders. Please share your unique learning which can help someone else. I would like to keep adding more and more experiences and tricks which you will share with me here in comments section.

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83 replies on this article “8 unbelievable tricks real estate agents play when you visit the project”

  1. Sanjiv says:

    Hi,
    Very well written article. Most of the points covered for potential investors safeguarding their interest. I agree that one should never take a instant decision of buying unless project is properly evaluated on all parameters.
    One of the most important aspect also needs attention is creditability of developer to deliver the project in time with quality standards. Go with reputed developers with consistent track record as most of the projects are getting delayed due to cash crunch.
    One can talk to banker also to get their views on the project regarding financial soundness of developer.

    1. Thanks for your comment Sanjiv

  2. Realestate says:

    Good. We do not show the eagerness to buy the apartments because they took advantage. Most of the builders saying like that almost registered before pre-launching but it is false.

    1. Thanks for your comment Realestate

  3. Megha says:

    In Mumbai I have seen couple of cases like this it mainly near to Palghar and Malshej Ghat. They are saying this property is mine (builder says) but after giving Down payment some other person will come into picture and shows you legal papers and say this property is mine.

    Such bad thing happened we need to be aware.I think the best think you can do is right now is leave your details at https://www.coverfox.com/jagoinvestor . And you will get a expert assistance on selecting and buying the right policy for you.

    You can then take the decision.

    Manish

  4. Vivek says:

    The article as well as some comments were definitely a big learning for all of us. But there are times, when we go by the reputation of the builder in a particular location (say for example Prestige, Brigade, Shobha etc in Bangalore, Gaurs in Delhi and so on)…. The reputation, we feel that they take it very seriously and once they have promised something, it will be there (like swimming pool, club house, gym, etc etc), which are basic amenities people look for before making a purchase. Now my question is, if we buy the flat and are assured of the amenities within a stipulated time and if they don’t provide us those amenities what all options do we have ? Here the payments are already made, flat is registered, and you have started staying there. What should we do ?

  5. Varun says:

    Your title says “8 unbelievable tricks real estate agents play when you visit the project”. Except point number 1 and maybe a little bit of point number 6, rest are all general precautions that every investors should take while investing in any product.

    Realtors’ are professionals too, trying to make ends meet for their families. Please don’t project them as scamster. Not all of them are thugs. If you have a problem, then please don’t approach them for their services.

    Thanks!

    1. Thanks for your comment Varun

  6. Sambhav says:

    One of the best things I have read in my life… thank you so much… I hope this helps other readers too!

    1. Glad to know that Sambhav ..

  7. Kailash says:

    Dear Sir,
    In Chennai, South Chennai leading builder put advertise in news paper, online and Local TV’s, 2 BHK Flats contains 65 Amenities for only 19 Lakhs for limitied time (3 to 4 Days) then price will be 39Lakhs. I don’t understand how to put ads like this one. These flats are really worth for 20 Lakhs? then how to advertise to 39 Lakhs. This 65 Amenities are free for lifetime? . What is the maintenance charges? for these amenities. if we own the flat, maintenance charges is really heavy as monthly rent for life time. most amenities are not used by most people. People should aware and avoid this kind of property.
    thanks

    1. THese questions you need to clarify with builder before buying .

  8. JayKumar says:

    Recently I came across a Mumbai Based renowned Builder selling Residential Plots outskirts of Hyderabad almost 40 KM from Main city.

    900 Rs/sft even charging extra for amenities like Club Houses, development charges,Legal charges & Corpus fund. If Plot is East facing they charge Extra, If facing club house then extra, North-East Extra,Corner Plot Extra, corner plot with Garden/Landscape facing for that extra like that 10% to 20% extra on Plot base price.

    Not even ready to negotiate even for 1 Rs.

    Being a renowned Builder we can trust that land will have no dispute but how come someone can sell if prices are not negotiated.

    After doing some home work by going by different forums like India Board Estate I found that they launched this Project in 2013 and prices they are increasing periodically and maintained same Stubbornness of not negotiating.

    I have not booked anyhow for my budget it too high but my wife says such big builders wont wait for Govt or public to develop that area wait and watch same guys or few more together builders will make that area develop by coming up with new projects and keep prices high and one day that remote area will be same as like Hyderabad’s Gachibowli or Banzara Hills.

    After all they have invested money and they wont exit from this game so early.

    I would like to share one experience I was able about to book a flat in Hyderabad but builder never disclosed where they have installed there STP (Sewage Treatment Plant), whenever I asked sells guy used to tell all Blocks have one each finally when I was about to hand over cheque I asked him to show where is STP he took me to that block and place where I was planning to book flat STP was in basement (Cellar-2 on corner) and flat I was booking was just above that STP. 200 Houses and one STP….Then I dropped idea of giving him money.

    1. Hey JayKumar

      Thanks for sharing your experience with all of us. It was a great learning.

      Manish

  9. ViralKamdar says:

    Some builders sophisticatedly ‘snatch’ money by the terms “Dedicated Parking” and so on. Even the Hon’ble High Court or Supreme Court has rulings that such kind of charges cannot be levied by the builder. Many investors pay this “Parking Charges”.

    Not only this, builders may insist that the buyer has to undergo the legal work through their agents only. In this case, the fees are higher by at least 40 to 50%.

    Investors should be careful about this.

    1. Hi ViralKamdar

      Thanks for your sharing your valuable comment on this topic. Please keep sharing your views in future also

      Manish

  10. sandy says:

    This is very unfortunate in India that We have an Authority (TRAI) for a 60 Paisa Mobile call but we don’t have any Authority or Body to put rules and regulations for this Builders.

    All the big schemes work on Pongi Scheme which is like they Buy a land at some price and then put add at Bhoomi Pujan that this is the price /Sq feet and we are bringing this kind of flats. Then they start collect money from Investors then they give that project to third party and use rest money for another land and collect money from their too.

    The real problem starts then they buy another land and don’t get investors then the real problem starts and it delays the previous projects also. Why i said it Pongi Scheme because till the time the money flow is there, no issues but when the builders own money starts going to the project they stop or delay it.

    That’s why people don’t trust these people and they try hard to get good projects but still we have very less flats in India compare to the demand.

    GOD BLESS US ALL.

    1. Hi sandy

      Thanks for your sharing your valuable comment on this topic. Please keep sharing your views in future also

      Manish

  11. satish says:

    Just make sure you avoid buying Under Construction, Its always better and prudent to buy a finished project. 9 out 10 projects are behind schedule by 1-3 years and you end up paying both rent and EMI, which can destroy you financially.

    cheers,
    satish

    1. Hi satish

      Thanks for your sharing your valuable comment on this topic. Please keep sharing your views in future also

      Manish

  12. Girish says:

    HI Manish,
    Thanks for such a informative article.
    It will be a good guidelines for individuals like me who are looking to buy flat in Pune moreover anywhere in India.

    1. Glad to know that Girish ..

  13. Sameer says:

    What you talked about is a typical real estate experience. Another point is to must visit the actual site before giving cheque. In some case, I have seen builders give stories of all kind with hypothetical time frames, but on ground it is just a no man land.

    1. Thanks for your comment Sameer

  14. Subh says:

    As we all know that now a days Real State Market is down and builder is sitting on a huge inventory .Supply is more than Demand .As per logic prices which were hiked to extreme without reason but as everyone was rushing to buy/invest in real state ,Demand was higher than supply .So these builders enjoyed the time and kept on increasing prices like hell and finally prices reached to that limit from where a serviceman with ones limited source of income can’t afford .

    Though it was expected that now builder will reduce the prices as demand is down ,as usual these greedy builders started playing smartly .Such a great tricks now builders are playing .They still feel buyers are fool and builder is smart .Beware of them :
    1.Book flat in just Rs.25000 .
    What man! just reducing the booking amount and after 15 days send letter to buyer ,pls deposit remaining amount else your booking will be cancelled and booking amount will not be returned .
    2.To make budget flat ,instead of reducing price ,started reducing size of flat . 2BHK in 40 Lac .
    They are not mentioning the size that now this 2 BHK is of 700 sqft that to saleable area not carpet .They know very well buyer first get attract by price only and after reaching builder office will know about size and when will ask to see sample flat ,it is on paper and will be ready in 15 days ,but after 15 days we may increase the price .So book based on design mentioned in Boucher .Wow great trick.
    3.Pay 20% during booking and remaining amount after flat handover or No EMI till possession or 0% interest till possession.
    As right now need is to get flat booked and execute agreement ,this clause works well but after 1 year your flat is ready and they will mark it ready to live without having completion certificate , amenities ,Proper Light Connection ,connecting road ,drinking water .You save a little amount on interest part and they saved their bad time .Now if you will say things are not in living condition ,you get smart answer “we told you remaining amount after flat is ready to handover not campus or with completion certificate, Check the agreement “ . I know many will say we will not accept it ,we will go to consumer forum ,we will file a case .But practically more than 90% buyer do nothing due to lack of support ,fear and extra money expense on legal .Builder will keep on pressurising by sending demand letter as per agreement clauses .Poor we are who don’t read agreement clauses with fine prints and finally when gets cheated feels now we can’t do anything as we signed agreement .But practically if the agreement is not as per government laws ,you can challenge it even after signing . But who will tie the bell to cat .So don’t think this 80% amount you will pay in 2-3 years .In such schemes builder completes flat fast and get the amount and then hand remaining things to 2-3 years as he has to get money from other projects .
    4.Moduler Kitchen free ,10 gm gold free ,Parking free , 2 year maintenance free etc .Great Man !!
    Nothing is free in this world .Specially from these builder communities who don’t even want to change price ,after having such a huge inventory. They have great invoice with great charges to adjust discounted amount in other sections :
    1.MSEB :Rs.1,50,000 – What is real cost to get a light connection .
    2.Infrastructure development –Rs.2,00,000 —What infrastructure you are developing boss !!We are already paying such a great price for a flat for which we have to work for years to pay loan .
    3.Club House Membership -200000—This club house will be equivalent to a row house which hardly will cost you Rs.75 Lacs .For which Builder will charge from almost 300-400 byers each Rs 2 Lacs and you have to pay every month maintenance while start using it .
    4.Legal charges –Rs-15000
    You will find many such stupid entries that a Rs.35 Lac advertised flat will cost finally around Rs.50 lac. So beware of freebies.
    5.No VAT ,Service Tax .
    Everybody should know that for all ready constructed flat ,VAT & service tax is not applicable .So for already developed unsold flat builder shows like he is doing some favour and discounting this money . Man! As government is not taking so builder is not charging it directly but in name of ready possession flat asking for more price .so wave off service tax and Vat and add double amount in name of ready passion however already base price is too high compare to area .
    6.To attract the buyer start selling low budget flat how without changing price ?Another weapon of location .Project will be far from developed or residential location and builder will say ,this location will be very hot soon .Put some false promises of Government which they announced during election and forgot after election .See the words :
    1. Metro line is coming ,this will be one of station .
    2.Ring road is promised here .It will connect whole city .
    3.SEZ is planned here ,Mall is planned ,DP road is planned .Some good company office is planned . etc
    But if you see ,you will find even connecting road from main road to project is not there .On more inquiry you will find from last many years same promises these builders are giving .And after handover of flat you have sweet reply “this is government related things ,we can’t do anything “. At least don’t buy your dream home based on those promises which are not in builders hand .
    7.Great promises ! World Class club House ,Huge Swimming Pool ,Grand children Garden ,Indoor Games ,walking area ,Dada Daddy Park ,Video Door ……..long list
    Can somebody tell me how many of these actually builder gives as shown in their Boucher and how grand they are when you actually get them .Indoor game (Chess board ,Carom ) .Do you know how difficult to maintain these common amenities ,video door ,remote control light system .They just increase your monthly maintenance and dispute due to use/unuse.
    We should really save ourselves from these fancy dreams ,amenities and facilities plotted by builder to trap you to just book the flat .We should know our need and accordingly you should decide project . Do check with buyers in other completed project by the builder ,what he promised and what he has given .

    There are many clauses you will find in builder agreement which almost 80% buyers never check before sign and read only when they get in trouble due to delay or extra charges etc posed by builder in future .I believe until you discuss builder agreement clauses with legal advisor ,have feedback from old buyers in other projects by builder ,have your actual need in mind ,don’t buy or book flat .

    As there is lots of inventory available in market ,it is always good to buy ready possession flat in fully developed project which has completion certificate ready and society is formed .It will save lots of your tension .

    Don’t get trap in false & fancy offers & promises .You have to pay 20-30 years for your dream home .So do proper work .

    http://www.lawyersclubindia.com/forum/Builder-has-increased-total-after-taking-booking-of-flat-63396.asp#.Ve2VkRGeDGc

    http://www.indianrealestateboard.com/forums/showthread.php/5759-Beware-Pune-s-Notorious-Builders

    This is not specific to Pune but over all india .But Pune Builder top the race .

    1. Thanks for sharing this amazing information !

    2. Pandu says:

      Thanks for the info Subh. Its very informative and eloborative.

  15. ANKIT says:

    Hi,
    I need to know about Pacifica Reflections, on-going construction at Ahmedabad S G Highway. I have taken a flat in the same scheme. Any one can update their reviews for the same builder and past experience ?

    1. Sorry we dont have any reviews about them

  16. Chhabria says:

    Sir,
    I am of the opinion that the only two things that should be considered while buying Real Estate are 1:- if it fits your budget. 2:- if it is priced at par with the surrounding markets.
    Every one has their own point of view. With due respect to yours, I would also like to add that unless you have made up your mind to invest in property, you will not be able to invest no matter what deal you get. There are a lot of ifs and buts that will strike you but if you have made up your mind, you will easily overlook the ifs and buts.
    Another important aspect that can be considered is that in a market like India that is highly obsessed with property, no matter at what price you buy the property as long as it is reasonably priced, it will fetch you best returns in the form of rental or appreciation, as compared to any other investment in the long run.
    Needless to mention the peace if mind that you get on owning a property of your own is incomparable…

    1. Thanks for sharing your views on this topic 🙂 .

  17. nimeshshah says:

    Absolute gem of an article and at an absolute right time for me. Since last one year I am looking for residential property at Virar and I have experienced all of the above. I have seen innumerabale flats and I am still negotiating and am sure that prices will come down more. Every week I am chased by brokers. My advice is not to go builders directly but search for investors flats which are off loaded at much lower price. Early investors are jittery now with the slack and are getting little desperate to sell off. Just wait and watch.

    1. Hey nimeshshah

      Thanks for sharing your experience with all of us. It was a great learning.

      Manish

  18. Ramcharan says:

    People investing in banagalore, Please make sure that the properties is not built on

    lakes/lake beds,tanks/tank beds,lake buffer zone,tank buffer zone,storm water drain,storm water drain buffer zone
    and raja kaluve
    Most of the apartments built by prestigious builders facing demolition threeat by govt

    1. Thanks for sharing that Ramcharan

  19. LOUIE says:

    Dear Manish,

    As usual good work!

    I would like to point out that though you have put the sales staff on the dark side, there are times when the sales staff are genuine but unfortunately they too have to use the same words. I have heard a lot from customers saying that builders first say all are sold out and then after a few days they call back and say it is available. I would like to clarify on these.
    There are some sales staff who say most of them are sold out to pressurize the customer but actually its a foolish thing to do because if the customer has some particular apartment or floor in mind and you show it as sold out, he may move to another builder.
    But sometimes a hot project which has been really sold out may get cancellations and the apartment may open. A good salesman will remember and call you back – There`s no trick there.
    Theres good news for customers. Government has drafted a bill where some of the usual problems of the customers have been addressed:
    1) Delay – If the delay is beyond reasonable time then the Builder has to pay rent or and compensation. If repeated the builder could loose his license.
    2) Permissions – All permissions should be attained before a sale is to be taken and the permit number should be shown in their website and project.
    3) An account should be opened for each project and the money for that project should be paid to that account only and the expenses to the project also should be thru that account. 50% of that money should be kept as security.
    4) The carpet area, plinth area etc should be shown separately. Builder should show the carpet area to the customer.
    5) Builder can accept only a specific small amount as cash from a customer in a year. If he takes above that the same amount will have to be paid as fine.

    Ofcourse people will find loopholes but from the side of customer he has definitely to hope for! 🙂

    1. Hey LOUIE

      Thanks for sharing your experience with all of us. It was a great learning.

      Manish

  20. Ramcharan says:

    People investing in bangalore real estate ,See how big builders are cheating investors

    ps://ravikanthpropertyconsultant.wordpress.com/0-big-builders-projects-super-stars-of-bangalore-how-you-blindly-dig-your-own-graveyards-there/

    1. Thanks for sharing that Ramcharan

  21. Anon says:

    Just watch in 2 years house prices will come down by not less than 30%, all the air in the bubble has to burst sometime.

    1. Thanks for sharing that Anon

  22. Unknown says:

    This is again a great article and just in time when now a days real state market is full of inventory but buyer can’t afford the cost hiked by these builder lobbies in last few years .Somehow if anyone buy the flat based on promised amenities and site plan ,99.99% he is getting almost 60-70% modified site plan along with small size or poor qualities amenities like Gym ,Garden, Swimming pool etc during handover.

    I would like to highlight specially Pune city ,where prices are hiked like anything in past few years compare to all other major cities in india. Pune Real state is nothing but a great loot .I am unable to understand if someone buying a 2 BHK flat of 900 SQF sellable area in min Rs.50 Lacs ,for which taking Rs.40 Lacs loan and his salary is between Rs.50000 to 75000 .After paying Rs.40000 in EMI ,how his family will survive with remaining money .Looks like now buyers are doing Job only for builders .As soon as Salary credit ,transfer it to greedy builders .

    See the link to understand :
    http://timesofindia.indiatimes.com/business/india-business/Only-builders-banks-gain-when-you-take-loan-to-invest-in-realty/articleshow/34712813.cms

    I could not see what extra ordinary changes in terms of infrastructure ,services , opportunities came in last few years in Pune that Pune witnessed highest property price hike in whole India. Every alternate week you can see Rs.50-100 psqft price change .

    When buyer is just doing job for builder ,he is also not getting promised amenities and facilities .Manish you have correctly said buyers are just in rush and they get trapped with these sales guys and buying flat without doing much R&D on past project of builder. While we invest such a huge amount , atleast we should visit past projects done by builder ,talk to residents of those projects ,try to understand all issues and problems of these already trapped buyers and then take decision .

    I can say with full confidence that almost 99% builder ,don’t handover same project which they show during booking .

    Friends start investing few amount in getting all legal document checked and understand problems in future before you book your dream house by signing builder designed agreement. Almost all builder put 20-30% such clauses in agreement that you will start facing problems after maintenance over ,society handover ,redevelopment of society .

    Few common observations now a days in Pune with these builders are :
    1.Instead of forming co-operative societies ,doing condominium or apartment Deed .Due to which land conveyance can’t be executed and land will remain always in builders name .Do try to understand difference between Co-operative society and Condominium before buying flat and also get in written that what builder is forming .Do check agreement .
    2.In maximum cases amenities will not handover along with flat. They takes extra 2-3 years to give amenities and now you already trapped by buying flat. Now builder will not even listen you .And finally a new plan will come and a new building will come in that plan by shrinking promised amenities size .
    3.Due to new building now parking problem will arise .Now your landscape garden will be converted to Podium garden and you can’t say anything because in your agreement there is a clause that “builder has full right to change sold project plan” .But you paid a big amount for a specious plan.
    4.Showing grand spacious plan while booking and during handover you will find size of club house ,swimming pool , party hall ,Gym is very small considering number of flats in area. These builder never specify size of common amenities in there agreement or plan and when you ask after handover why size of swimming pool so small ,they say we promised you swimming pool and given .We never said anything about size. Believe me guys don’t buy any flat based on number of amenities promised by builder .It will only disappoint you .Just focus on location ,connectivity and feedback by past buyers .
    5. Water is big problem in Pune .While you book project builder will commit that we have sufficient water sources and 10-20% you need to buy from tankers .Man there is big lobby of water tanker walas .Almost all new societies are 90-100% depend on water tanker which increasing maintenance cost too high .Almost 50% maintenance amount is spent on water .if there is any borewell ,builder will keep on using that for further construction and he will force you to keep buying tankers.
    6.They will show you some DP roads and based on that you will reach your office within 5 min but if you inquire you will find from last 10 year builder is showing same road and it was never developed .
    7.Builder will take 2 year maintenance amount and he will never give you expense statement .After 2 year he will come and handover you maintenance and on demand give you all expenses in a xls which will have a huge –ve balance .You keep on asking for audited copy but you will get skilled –ve balance xls.
    8.Maximum projects are in suburb location and comes under Grampanchayat .You will face lots of issue of water facility ,Street Light ,Roads and whenever you will talk about that to builder after handover ,they will just have a answer …”its not in my hand …you talk to Grampanchyat” .Hope everybody understands if builder need road to launch a project ,it gets developed within month or week but after selling project builder have different words ..

    Like thet there are many points which one should verify by visiting past projects of builder ,see online reviews ,talk to old buyers who are trapped by such builders .

    Here I would like to say may be all builders are not like that but I say 99% builders are like that .Here I am giving link of NSE/BSE listed Pune Builder also to prove my words .

    Belvalkar Housing (Read this link to understand agreement clauses which now a days Pune Builders are putting in their agreement and buyers just getting trapped)
    https://www.facebook.com/pages/Belvelkar-Housing-Builder-Review/944055502307264

    Kolte Patil Builder Project
    https://www.facebook.com/pages/Green-Groves/614265998613395?fref=ts

    Review by reputed blogger
    http://ravikarandeekarsblog.blogspot.ch/2013/11/Review-of-Belvalkar-Housing-Kalpak-Homes-1-2-BHK-Flats-Kirkatwadi-Sinhagad-Road-Pune-India-1.html

    Manish Thanks a lot for such a great help to open buyers eyes and guiding well.

    1. Hi Unknown

      Thanks for your sharing your valuable comment on this topic. Please keep sharing your views in future also

      Manish

    2. Rahul says:

      True, When I wen to a reputed builder 80% of his flats were sold out on second day of launch, when I asked for the booking sheet, I was socked to see that most of these flats were booked on same name. These are the games played by pune builders

      1. Thanks for sharing that Rahul

  23. Dipak says:

    Dear Manish..

    Great article. Realized my mistake i did 2.5 yr back. I purchased my 1st house. Though it is one of the best project in the area, and all well with legality but as u said, i lost my negotiating power by booking and paying in hurry.

    Anyways, there is no meaning regretting now. but yes, i learnt a lesson.

    BDW, i recently purchased and read your two books.

    1.) 16 Personal Finance Principles Every Investor Should Know.
    2. ) How To Be Your Own Financial Planner In 10 Steps.

    NO WORDS to say. simplyyyyyyyyyyy amazing books. thank you very much for writing such GEMS. I strongly advised to all readers to read these two books.

    Guys. if u take personal finance seriously, then u SHOULD have these books in your library. And if u don take it seriously, then THEY ARE MUST IN YOUR LIFE. It includes everything ranging from Life insurance, Mediclaim, Saving, Investment, Mutual Funds, credit cards, CIBIL Scores, Home loans, car loans, Goal setting, Nomination, Will making and many more areas of our financial life which i couldn’t thought of/imagined getting all information compiled in one/two books. WORTH PURCHASING. GO……. N…. GET IT…. and explore my words by yourself.
    thats it……

    Again . A ton of thanks dear MANISH.

    BDW, now i Started reading the 3rd one by NANDISH DESAI, (11 principles to achieve financial freedom), but found it quite dull and boring till now. but its not finished yet. so wil give u final feedback wn i finish it.

    1. Thanks for sharing your reviews

  24. anand says:

    In NCR these days, builders are selling dreams literally. They are offering flats in Dwarka Zone-L at concessional rates which is today ~ 5000/sq ft on DDA’s yet-to-be-notified land pooling policy. There are no approvals in place, just dreams. But people are in mad rush to buy them considering the prospects this location will have when approved. One of my friend paid 11000/- as token money but now thinks this might be a fluke. Not sure, if we can do anything about it – lodge a complaint with Police or anything? How can they advertise something that doesn’t even have the requisite approvals?

    1. Anand

      I think there is nothing legally wrong about the advertising part as such. Your friend booked himself without any pressure from anyone . So its assumed that he did it in his all senses. That is how the law will see it

  25. Nishant says:

    Just when I am in the lookout of a property, I come across this article. What an eye-opener. Thank you for the wonderful write-up and exposing the reality.

    1. Glad to know that Nishant ..

  26. ashok says:

    excellent article after a long time

    1. Thanks for your comment ashok

  27. kamal says:

    Hi Mohit,
    It is wonderful, article. I am impressed with the level detailing.
    And off-course , this will help immensely to many future home buyers.
    I have similar experience from the past where sales rep talks about upcoming surrounding infrastructures / collage / transport etc, but nothing happens after many years.
    Thanks a lot.

    1. Hi kamal

      Thanks for your sharing your valuable comment on this topic. Please keep sharing your views in future also

      Manish

  28. ashok says:

    One more trick which is being played by builder is regarding mentioning flat area.It can be mentioned in carpet area,built up area or super built up area.Many people do not understand difference among these 3.A flat having super built up area of 1000 sq ft if converted into built up area and carpet area will be only about 850 and 700 sq ft only respectively.Builders sell these flats saying that carpet area or built up area is 1000 sq ft.Believing this to be true people get an impression that per sq ft rate is reasonable.This is also a popular trick played by builders.

    1. Hey ashok

      Thanks for sharing your experience with all of us. It was a great learning.

      Manish

  29. Nilesh says:

    Excellent stuff as usual Manish..you have hit bulls (builders) eye with this article…well written..

    I have experienced myself all the above tricks. .most of the time human tendency is to fall fir them. .

    1. Glad to know that Nilesh ..

  30. Vijay says:

    Thanks for the article.
    Being desperate is the main reason for getting cheated, either our money or legality.
    One tactic is to check about the target project with the sales guys of neighbouring projects. They always have some inside info.
    Another is to get a friend to check the details through a property dealer.
    Lastly, never ever finalise a deal in first interaction.

    1. Hey Vijay

      Thanks for sharing your experience with all of us. It was a great learning.

      Manish

  31. Krish says:

    Most of these points are not applicable to top builders of Bangalore. These are listed companies and concious of their reputation and brand image. Legality, Titles, Approvals are never been a concern. They would never part with the docs if you don’t pay booking amount. But then you have a clear cut cancellation policy.

    While legality and extra pressure from sales men might not be there if you go with the reputed builders, but many failed to discuss the finer details. Possession date, Delay clause, Amenities ownership & handover date, SBA, payment schedule of other charges and so on. But then these builders are not going to alter for your sake alone. It is either you withdraw or book the project. Nothing in between.

    1. Gautam says:

      Kris,

      Mantri builders of Bangalore took me for a ride for 7 years –
      2009 to 2015. They are as bad as the small town players and play all the tricks of the game and then some more. They are all the same.

      1. Hi Gautam

        Can you share a bit more if possible on this. Share your story please .

        Manish

    2. Thanks for sharing that info Krish

  32. JeanPaul says:

    Awesome One Manish!

    1. Thanks for your comment JeanPaul

  33. krajiv26 says:

    Hi Manish,

    You have chosen very burning issue. However, in Ahmedabad where I looking for flat does not have so much trick playing game as I experience with various RE projects where I visited. Even they are very open to give legal document. Even most of the good builder provide you a CD with having all document copy in it along with project presentation and they ask to verify where-ever you want. I saw lot of transparency say 80-90 % in compare with NCR region where earlier I am roaming for a flats. I don’t know why this difference is?

    1. What I said will obviously not apply to good builders . Thanks for sharing how does it work in Ahmedabad

  34. Masilamni says:

    By way of 8 points you have cautioned the buyers of residential property. It is quite nice. It is also better to go by the reputed builders. In Chennai one multi storey apartment collapsed rendering nearby multi story buildings useless. We have to be very cautious about fly by night builders. How to check the
    the trust worthy of the builders?.

    1. You should read about the builders atleast on internet. Try to go to their other projects.

      Manish

  35. Vinay says:

    Agreement to sale is also a good document read and understand how the process ahead would be organised before you jump-in and commit. I have found a 52 page document all against the buyer’s interests in one agreement of sale.

    1. Hey Vinay

      Thanks for sharing your experience with all of us. It was a great learning.

      Manish

  36. Prasad says:

    Thanks a lot MANISH for the informative article. I am looking for a flat in BLR for a year and I came across all kind of smart/ugly tricks played by RE agents. In one instance they almost force me with, this apartment all sold off, you can book our new flat coming in adjacent area. All fantasy in model flat with glass door, super fine kitchen bathroom really doesnot exist. They hit the soft corner of buyer with super goodies(with your money) and live in heaven kind of scenarios. It is really sad people falling in the trap and regreting rest of life. Kudoos to you for this eye opener to most IT guys!!

    1. Hey Prasad

      Thanks for sharing your experience with all of us. It was a great learning.

      Manish

  37. Sushanta says:

    Hi Manish,

    Regarding legal documents they are not showing it unless I pay the token money around 1 Lakh. I am talking about Bangalore. When I asked you should be transparent and all documents should be kept as a part of leaflet in your office he is saying that this is the policy of all Builders in Bangalore. Is there any trick involved in it? Will I get my money back from them if my lawyer rejects the documents as illegal or something fishy?

    1. RAJESH says:

      My advice go with a passbook or bank statement. Show him that you have money and you are quite capable to finalize any project of your choice. You tell him that I have money I am going to finalize a project, if you are not giving legal , I will not even discuss with you. Please do not even give them 1 rupee if they are not furnishing legal documents. I used this strategy and it worked. What is stated (everything) in this article is correct, I appreciate the pains taken to bring out facts in this article.

      1. Sushanta says:

        Thanks Rajesh, I will surely attempt this next time.

        1. Vijay says:

          Dear Sushanta, I suggest you do not pay any penny. Take their e mail ID/ give yours and ask for the project details be sent to your e mail. Once that is received you will have their ID. On that have a revert detailing out the complete truth of your conversation with the marketing rep ( which you may record on phone during your visit ) and attatch the same with the e mail. Surely, you will receive no reply. Send 3-4 reminders and have the complete evidence, then you may lodge a complaint with the state regulator or the town and country planning department of the state against the builder for not showing the title/legal papers/sanctions/agreement draft etc etc. ( See how it will work).

    2. Sandeep says:

      It is always better before buying the flat from any one, Builder / Resell.

      Apply Home Loan with HDFC / SBI etc with payments of some 2000/- + ST (generally non refundable) and wait till approval. If bank approved than its cleared property (90%).

      Do Not pay any amount to builder till your loan is approved. even don’t pay more than basic service charges to bank for processing fee etc.

      1. Vijay says:

        Dear Sushanta, I suggest you do not pay any penny. Take their e mail ID/ give yours and ask for the project details be sent to your e mail. Once that is received you will have their ID. On that have a revert detailing out the complete truth of your conversation with the marketing rep ( which you may record on phone during your visit ) and attatch the same with the e mail. Surely, you will receive no reply. Send 3-4 reminders and have the complete evidence, then you may lodge a complaint with the state regulator or the town and country planning department of the state against the builder for not showing the title/legal papers/sanctions/agreement draft etc etc. ( See how it will work).

        Dear, please do not take that if the loan is sanctioned the project is clear. Its not the responsibility of the bank or loan giving agency to ensure that. You are legally bound with the agency to refund even if the project fails and you are subjected to cheating.

        Also most of the flats are being sold on the basis of Super Built Up area which is never defined in the exact terms. Also, the builders act smart by inserting one odd line in the application form ( when buyers are careless to read in between the line due to hurry ) and then at the end when only 5% of the payment is left they ask for extra money saying that the super built up area has gone up and then the buyer finds himself into binds. The one project ( Hero Realty Ltd., of the Hero Group at Haridwar by the project name ” Haridwar Greens ” has resorted to this method and apparently have been able to make huge monies that way. So check all the clauses, read those again and again yourself. Even a lawyer can mislead you. You must ask the full details as to how the said super built up area has been arrived at by asking him to show you calculations. I have asked a number of such builders they have never supplied the same and after that have never approached me for booking any flats etc. That showed that how truthful they were. More about these once my dual with Hero Realty Ltd., reaches some final conclusion, so that others are more alert and are benefited from the experiences.

    3. LOUIE says:

      Dear Sushanta,
      There are many builders who are genuine and follow the policy of showing all the original doc only on paying advance – this is to ensure that you are genuine. There were instances of other builder lawyers coming and verifying the documents and then simply going for a case or cause mischief just to dent the sales or just enough time to get their project sold which will be nearby. By the time the air is cleared the talk will be that it is a disputed land and there is some case going on and its better not to invest there. [This is exactly what the competitors want]
      So the best option is to look into their offer and if you feel its really worth and dont want to miss, you can offer them a PDC [Post Dated cheque] and within that time you can verify the documents. Get their surety that they will return the PDC if there is any issue in documents and you can give your surety that they can present the cheque on the said date.

      1. Sushanta says:

        Thanks LOUIE, actually one of the builder has given me the option to give pdc which also looks reasonable approach. Thanks for your advice again.

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