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POSTED BY ON April 17, 2012 11:09 pm COMMENTS (18)
Hi
My father owns a 30 year old house on land area 1800 Sq Feet : (2.5 Kattah (or Cottah)) in an upscale area of Kolkata- Ballygunge area. We are talking with our neighbour who also owns a house on land area 1800 Sqft.
My father and his neighbour wants to give their house (1800 +1800 = 3600 sqft land) to a builder..
In this area Kolkata-Ballygunge new flats are going around in the price of INR 6500/sqft
Do the builder will construct G+4 floors (8 flats each 1300 sqft super built) in the 3600 sqft land ? ( We have seen other neighbors doing G+4 bldg on similar size land)
1. Please tell us some list of documents that we need to sign/check with the builder ?
2. How much my father should ask ? ( Two flats each 1300 sqft super built up Plus 20 lakh cash Plus rental in a 1300 sqft flat in equivalent area during construction period). Is this a fair deal or this is too high or this is low ?
3.Do the builder will amalgamate the two property through Municipal Corporation ? (Father house and neighbor house)
4. Is there any danger/hassle during amalagamation of two properties ?
Thanks in advance. Kindly advise.
Samrat
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Does Good Real estate lawyers charge Flat fees or they charge per hour for General Real estate Transaction or is it based on 1% of Real estate value? (Prepartion of legal ppaers, Verification of docs)
Please give me some estimate.
Thanks Ashal and Bharat.
Side Question:
Based on your experience: Can you give me an estimate of a good professional Real estate attorney (lawyer) fees for Real estate transaction in big cities of India ?
[ I need the attorney to create the basic legal agreement and verification of legal real estate papers and accompany me during signature of papers.]
though repeating i must say you that on given information of ongoing new property rates of your area , i guess that the land price could be @1.25 lacs per yard , and total cost of your plot should be @2.5 crores, so you please inquire locally about the land rates before deciding any thing , and if it could fetch only 1.5 crores, only then think of second option. and one more thing i repeat, there are not only builders are interested for such land but also , new rich persons are interested for such land for constructing own dream home , and in that case you may get the payment at one go , not in installments as in builders’ case. you may give an small classified advertisement in locally more circulating for exploring the demand of the plot . best luck!
I am planning to offer the above mentioned Options I and II to different builders in next 6 months.
If they don’t agree then wait 2-3 Years (2014-2015) as recommended by Ashal.
Do you guys anticipate realty prices (land/house) will increase in Tier I cities (Tier I areas) India in next 2 years?
Hi Bharat and Ashal, Thanks for all your tips and opening my eyes.
At what percentage land/flats will increase in next 1-2 years at very good neighborhoods of Tier I cities like Kolkata ?
I already own a decent separate flat near our house where my parents will live if they do outright sale.
Ashal and All: Based on my situation (living overseas etc) I will propose the two options to diff builders. Otherwise we will wait 1-2 years.
Does that sounds right to you guys ?
——————————————————————————————–
1. Sale outright the whole house (sitting on 1800 sqft land) around INR 1.5 crore
OR
2. Ask for 2 flats 1300 sqft (super built) Plus 40 lakh cash + rent arrangement during construction period (Rent here is INR 20,000/month for 1200 sqft flat)
****************************************************
[1800 Sq Feet land (2.5 Kattah (or Cottah)). In this neighbourhood brand new Flats are going in the price range of INR 6500- INR 7000/sqft.]
Dear Samrat, if you are anticipating an increase in the price of the house, then my take ‘ll be to wait & watch & do not commit anything with that builder. Please take a rest of 2-3 years.
thanks
Ashal
i think, in your circumstances , outright sale is better option (of course, side by side you should arrange other suitable residence for your parents.) , but you must negotiate for better price based on your local enquiry. second option is not bad, actually better than first (if the value of land could fetch 1.5 crores). i have no knowledge for the effect of different steps by govt., but my take is , that the land cost would appreciate by 10% p.a. and as such you have to count only land value,and if you are not in need of urgent money, you should take decision after knowing the facts yourself.. wishing you best luck!
@Samrat sarkar
for deciding anything first you should know the ongoing rate of plot of land in your area. that could be done easily inquiring locally. i arrived the rate of rs.1.25 lac per yard from property price rs.6500-7000 stated by you. so if you do not get better or only a very little more than that in other two alternatives, you must select outright sale. as it is comparative simple and less risky. just you have to take some money as token and make a banakhat with conditions of sale,its payment and handing over the property etc. generally handing over of property, final sale agreement and final payment are simultaneous. for the detailed procedure you should hire a local advocate. for other alternative proposed by the contractor/builder, you are just as his partner where you are investing through your property worth@ 2.5 crores and he is investing his expertise in construction along with legal formalities and marketing the other(not allotted to you) flats plus finance for construction (60-70 lacs) and , cash payments + rent for your residence for 1-2 yrs( which both make @45 lacs). however depending upon his acumen , he may have not arrange any finance or a little finance , as he may get booking a/m for the flats on sale while construction starts and further get the balance payment through installments. you should weigh the more money against risk involve and your capacity to deal with. the advantage by say 10 lacs within a year or two is not mean for middle class. you may also think of the alternative suggested by Ashal also. in a way , i don’t know your condition and environment , but such digging of alternatives may not only benefit you, but may lead you to a new horizons of world of business. i like that that fore such type of land, not only builders are interested, but also new rich men are interested for constructing their dream house in area of choice. you should explore the market.
Hi Ashal and Bharat,
Again Thanks for your advise.
Building the G+4 Building on my own expertise is not possible as I am the only child and I live abroad. I work overseas and its hard for me to make frequent trips to India. My parents are too old to take the hassle of construction, working with Local Municipal Corporation etc bureaucracy. My parents have very little local human resource support. In our neighborhood lot of families are like us where kids are living overseas. That’s why builders approach the senior citizens people (empty nester’s).
So based on Bharat conclusion: I should at least try to negotiate with the builder for Best Option: Option (1) on which he might hesitate as it is a big initial investment for him. (Builders like to use initial Flat Booking deposit money from customers to pay the land seller). If he doesn’t agree with Option I should ask him for Option (2).
Otherwise I should wait for 6-12 months and not settle for anything less than the two options mentioned below.
What is your Take On this matter ?
Side Question: Due to recent RBI rate cut flat/apartment prices will increase in good areas of Tier I cities like Kolkata ?
1. Sale outright the whole house (sitting on 1800 sqft land) around INR 1.5 crore
OR
2. Ask for 2 flats 1300 sqft (super built) Plus 40 lakh cash + rent arrangement during construction period (Rent here is INR 20,000/month for 1200 sqft flat)
****************************************************
[1800 Sq Feet land (2.5 Kattah (or Cottah)). In this neighbourhood brand new Flats are going in the price range of INR 6500- INR 7000/sqft.]
Dear Samrat, what I meant was to enter only in a construction agreement & you ‘ll pay the developer for the construction part only. You (actually your parents) ‘ll sell all the apartments as per choice.
Thanks
Ashal
Hi Bharat. Thanks for your response. The builder initially said they will give us only one 1300 sqft super-built flat Plus 20 lakh cash. Do you think we should ask for the following two options or is it too much asking.
1. Sale outright the whole house (sitting on 1800 sqft land) around INR 1.5 crore
OR
2. Ask for 2 flats 1300 sqft (super built) Plus 40 lakh cash + rent arrangement during construction period (Rent here is INR 20,000/month for 1200 sqft flat)
****************************************************
[1800 Sq Feet land (2.5 Kattah (or Cottah)). In this neighbourhood brand new Flats are going in the price range of INR 6500- INR 7000/sqft.]
Dear Samrat, You did not answered my take – developing the building & later on selling the same as per your choice.
Thanks
Ashal
as figures suggest , if the land cost is 1.5 crore, the second option seems better(of course you should be very careful in dealing compared to option 1), but based on the flats’ value rs.6500-7000 , estimate the land value more, may be @ 1.25 lacs per sq. yard, totaling about 2.5 crore. so please check before deciding. i calculate as under:
total superbuilt 5200 sq.ft and total value of the project rs.3.5 crores. the total construction cost of 5200 sq.ft superbuiltup , may be 2700 sq.ft builtup , could not be more than 70 lacs , hence the land cost could be at least 2.5 crore.
this is my guess , and you must decide on facts. you may think of tax angle also.
best luck!
‘Do the builder will construct G+4 floors (8 flats each 1300 sqft super built) in the 3600 sqft land ?’
as my rough estimate there should be allowed FSI as 1.5 instead of here 1.8 as i mentioned. one more alternative , which might be thought of, could be outright sale , which is normally for such building could be the prevailing value of the land. it can be inquired. as per my rough estimate it could be between 1.5 crores to 2 crores. if you are going to fetch better than that option, then only you should go either for other two options..
Hi Bharat, Ashal and others . First of all thanks for sharing your great advice.
Legally my father only owns his 30 year old house sitting on1800 Sq Feet land (2.5 Kattah (or Cottah)). In this neighbourhood brand new Flats are going in the price range of INR 6500- INR 7000/sqft.(I guess builders sale Superbuilt area flats).
What is a decent or true market value offer ? Any comments or input from you guys.
1. Sale outright the whole house (sitting on 1800 sqft land) around INR 1.5 crore
OR
2. Ask for 2 flats 1300 sqft (super built) Plus 40 lakh cash + rent arrangement during construction period (Rent here is INR 20,000/month for 1200 sqft flat)
Dear Samrat, please do contact a local advocate in your area. You may also contact to other property owners in your area who had earlier entered in such deals.
By the way, how about, only making a construction agreement with the builder to construct the building as per your choice & you people later on sell the whole thing as per your demand?
Thanks
Ashal
JGMM gave the correct advice , and even the about the value part. however i dare to estimate the fair value based on the rules here:
generally one can make construction @1.8 times(it may be different there, it is known as FSI.) built up are on a residential plot, irrespective of floors of the building (of course there are rules and regulation for no. of floors and the land you should keep vacant , dist. from road etc.)accordingly on 1800 sq.ft plot builder could build 3240 SQ.FT BUILT UP AREA . as such there are many things, like parking area, staircase, etc are exempted from built up are calculation for FSI 1.8 stated above, and by different addition super built area for charging by the builders are approximately more than 4 times the plot area. so in this case he would get sale able super-built up of @ 7800 sq.ft including to be given to the land owner. after two flats of 1300 sq.ft. super built up, he can sell @5000 sq.ft super built up at @6000/- would fetch him rs. 3 crores. against he would spend rs. 6500000/- for construction and pay @rs.2000000/- cash plus rent during construction period to the landlord.. this approximate calculation shows that the builder would have optimum margin for fulfilling your father’s demand. may you may ask little more, i think.
I really doubt the exhaustive list of information you need would be available in this forum. Checking with a lawyer is the best way out.
Few points:
If the land is worth that value your ask appears fair to me. Also If you already reside in that house you need to ensure the builder pays the rent until he gives you possession of the flats whether it takes 2 years or 5 years or whatever. You also need to sign an agreement with the builder for additional damages for delay and also for abandoning the project at some point etc.