Buying a new House? Here are 10 additional expenses you should be ready for!

Are you planning to buy a house? If yes then, you would have planned your investments and saving in line with the “Cost of the house”, you are looking for. But, when we buy a house, there are so many other events/costs which comes during or after buying the house which we do not plan well beforehand.

In this article, we will look at various things where we might have to spend money for. If you are planning to buy a brand new house, this article will give you a good direction on how to plan out your finances.

List of expenses associated with the purchase of a new home

 1) Stamp Duty

Stamp duty is a tax, levied by the state government on every transaction of property i.e. buy and sell, whether it be commercial or residential property. As it is levied by state govt. the rate varies from state to state. It ranges from 3% to 10%, depending on the slab decided by the particular state (in Maharashtra it is 5% of market value or agreed value of property whichever is higher).

Stamp duty is calculated on the higher value of any of the following:

  • The ready reckoner rate also known as circle rate/market value which is predefined every year by state government for every town, state or village, or
  • The agreement value of property. For example, if the agreement value of a property is Rs 50 lakhs and the value according to the ready reckoner rate is Rs 40 lakhs, then, the stamp duty would be calculated on the higher value, i.e., Rs 50 lakhs.

2) Registration cost

For registering a property on your name, the state government will charge you a registration fee. It varies from state to state. But most of the cases it is 1% of Market value of the property. Registration fee is lowered if the buyer is a senior citizen or a woman. In most cases, the builder will add this cost when they quote the house value to you.

3) Interior Cost

When you get the new house, its the bare minimum house with walls, electric points. It’s your job now to furnish it and decorate it as per your taste.  So, it is suggested to consider the cost that you may need to spend on interiors. And if you want to do marble flooring, designer wallpapers, texture paintings on wall, chandelier, modular kitchen, etc… the interior cost will tend to go up.

4) Advance maintenance fee 

When we move to a new house, and if it is in a newly constructed project, usually we are asked to pay a maintenance fee for a year or two by the builder. It can be a decent amount if you consider advance payment, so please consider that.

5) House warming party

When you move to a new house, you may feel like celebrating it with your friends or family. Some people may like to have a grant celebration or some may like to have a small party with close friends & relatives. So, the cost of house warming party varies from the taste of person to person, find out how do you want to celebrate it? And accordingly, plan for that cost separately.

6) Furniture

Many people want to set up furniture before moving to the new house and some people do it after 2 to 3 years of moving in, which is also okay. So, if you want to move in, to furnished new house then, you will require to buy or appoint a carpenter to make your home furniture best suitable as per your needs and requirements. You need to be prepared for the cost of furniture such as sofa, bed, almirah, dressing table, dining table with chairs, shoe rack, study table, electrical appliances, etc… depending on your needs.

7) Additional charges in flat

Now, these costs are subjective, it depends on the needs of a family. These additional costs include a video security system and iron grill at the main entrance for security purposes, pigeon net if your new house is having open balconies and mosquito net for windows, etc.

8) Sinking Fund

Sinking fund is a cost, which you may need to pay, to the society you will be living in, every year for a certain period of time such as  5 to 10 years. These charges are paid by all the house owners in the society, so that society’s huge maintenance cost, which can be for Lift maintenance charges, Building painting, clubhouse renovation, parking space, and building renovation charges, etc.

For example, if the lift of your building is not working and it requires 10 Lakhs to get repaired then it will be made from the sinking fund collected by society.

9) Small house alteration

Now, this cost again is subjective, it may change from person to person. Many people want to make some changes in the existing layout of the new house before moving. So, they will be needing extra money for this. Examples of small alterations are changes according to Vastu Shastra & creating storage space (storage room or shelf) etc.

10) Packers and Movers Charges

Moving your home stuff from one place to another can also cost a bit, especially if its an inter-city move. Do consider this cost as well when you are buying a new house.


For many of us buying a house is like achieving a huge milestone in our lives. When we plan our savings and investments according to, not only for the cost of the property but, also for other additional expenses to be incurred, then we will have more clarity & avoid the burden of so many expenses before buying our dream home.

And I would say around 10 – 20% of your house cost, should be kept aside to meet all these expenses. eg. if you are planning to buy a house of Rs. 50 Lac then additional 5 – 10 Lac has to be taken into consideration.

If anyone in your circle of friends and family is planning to buy a house, let them know about these additional costs. And also, if I have missed some points so please add in the comment section.

Should you buy 2nd house as an investment? (28 min video discussion)

I along with my teammate Sagar, recorded a 28 min video discussion related to this topic – “Should you buy 2nd house as an investment?” yesterday. We talked about various pros and cons which are often missed by those investors who are thinking of buying the second house for investment. Watch the video below

What we discussed in this video?

  1. When does it makes sense to buy a 2nd house?
  2. How does it impact your cashflows and stress level?
  3. Why are investors so attached and attracted to buying “Real Estate”?
  4. What are the real-life issues which investors face after buying the 2nd house?
  5. Is it an emotional decision or a financial decision?
  6. Why buying just 1 hour is enough for 95% of investors?
  7. Why illiquidity is a big issue with buying a 2nd house?
  8. How 2nd house can create a good second income, and in which cases?

Do let us know if you have any comments after watching the video!

Understanding RERA – 14 rules real estate investors should know

For Long, the real estate sector was unregulated and in favor of builders and developers. From getting delayed possession to bearing a huge loss of project cancellation, all has to be borne by home buyers.

Even in worse case after living in a society for a long period of 10-15 years, homeowners need to vacant the society due to builder’s mistake of not getting approval from government for the said project.

And after all these, for any of these malpractices, if a home buyer files a complaint, it use to take years to get a verdict. However, now to bring transparency and accountability to this sector, Real Estate Regulatory Act, 2016 has come to force.

This aims to create a more equitable and fair transaction between sellers and buyers of properties. The Real Estate (Regulation and Development) Act is expected to ensure consumers will not be cheated or taken for a ride by the developers.

So, we will see in 14 points that how RERA will benefit us. But, before that let’s see all loopholes and malpractices builders and agents use to do in the real estate sector.

  • Delay in project completion
  • Use to cheat buyers with false information
  • Divert funds to another project or for other purpose
  • Get-away with sub-quality construction
  • Offer special pre-booking rates
  • Keeping Date of possession clause in agreement empty
  • Altering the project developments without consent

14 RERA rules investors should know

1. Registering project with RERA :

RERA makes it mandatory for all commercial and residential real estate projects where the land is over 500 square meters, or eight apartments, to register with the Real Estate Regulatory Authority (RERA) for launching a project, in order to provide greater transparency in project-marketing and execution.

The builders or developers have to publish all the details such as sanctioned plan, layouts, the location of the project with clear demarcation of land, carpet area, number and area of garage, etc. So, with RERA builder have to get all the clearance before they could advertise or sell any property, it will help in malpractices to be curbed.

Hence, before entering into the contract, you can check online on the website of RERA about every detail of the project by visit the RERA site of the concerned state and go into the registration tab. I have attached a screenshot of RERA Maharashtra. To get an idea about how RERA MAHARASHTRA REGISTRATION site looks like.

Snapshot of RERA website for registration

If you are offered to buy a property of any unregistered project then you can notify the same to RERA to save others from any kind of fraud.

2. Quarterly updates on Construction progress : 

Now builders/developers have to upload project details including number and types of units sold out, government approval taken or approval pending list & completion scheduled every three months. Along with that if there is any litigation going on related to that property then all the documents of proceedings have to be uploaded by builder/developer. Hence now you can check online the progress of the project they are putting their money in.

3. Escrow Account:

The developer will have to transfer 70 percent of the money received from customers to an escrow account. This will ensure the builder does not spend the money on other projects since they can withdraw money from this account after approvals from engineers and chartered accountants they appoint and your money will be used only for the project you invested.

4. Sale agreement standardization –

Earlier sale agreement use to be in such format that the home buyers were penalized on any default but similar defaults by promoters would not attract any penalty. But, now as per RERA norms, a standard model sale agreement has to be entered between promoters and homebuyers to ensure equality and protect buyers from various penalties and charges.

The agreement of sale shall specify particular details of the project including the construction of buildings and apartments, along with specifications, internal development works and external development works, the date on which the possession of the apartment, plot or building is to be handed over, etc.

5. Maximum 10% of cost of project as advance payment :

The promoter can not accept a sum of more than 10% of the cost of project, plot, etc.. as an advance payment or an application fee from you without first entering into a written agreement for sale with such person and register it.

6. Five years of defect liability period :

Under RERA, in case of any structural defect or poor quality, it will be the responsibility of the developer to rectify such defects for a period of five years. So, if any defect is found in the quality used in the construction of property then you can make the developer/builder liable for all sub-quality issues and ask for repairing or compensating the same.

You can also watch the video on RERA –

7. Carpet Area :

The area of a property is often calculated in three different ways – carpet area, built-up area, and super built-up area. Hence, when it comes to buying a property, this can leads to a lot of disconnect between what home buyer pays and what he actually gets.

But, now it is mandatory for the developers to disclose the size of their apartments, on the basis of carpet area (i.e., the area within four walls). This includes usable spaces, like the kitchen and toilets.

8. Title Representation :

Promoters are required to disclose clear title over the property and project. If any defect is found in title of property then you can ask for the compensation and there is no limit for the amount of this compensation.

9. False information to home buyers :

If you made an advance payment for a project on the basis of any false information given to you via prospectus or in advertisement then you have the right to ask for a refund of your money. And if you want to continue with the project then the builder has to pay penalty and that can go up to 5% of the cost of property.

10. Failure to complete possession on time :

If the promoter fails to complete or is unable to give possession on time then, the promoter is liable to pay the entire amount given by you if you wish to leave the agreement. But, if you wish to stay in the agreement then the promoter will have to pay interest for every month of the delay till you receive the possession.

11. Approval for alteration in sanctioned plans :

If a builder wants to make alteration in plans and specifications of your individual flat then he can do that only with the approval of you. And if a builder wants to make alteration in the entire project’s layout & common areas of society  then he needs approval of the 2/3rd number of total buyers.

12. Obligations of the promoter in case of transfer of real estate project to a 3rd party :

The promoter will not be allowed to transfer the majority rights and liabilities in respect of a real estate project to a 3rd party without the prior written consent from two-third allottees (buyers), except the promoter, and without the prior written approval of the RERA authority.

13. Agent registration is mandatory :

Now, every real estate agent has to register himself under RERA before selling or advertising any property and he has to abide by all rules of regulation like, maintaining books & records, not be involved in unfair trade practices or make any false statement oral or written.

14. Grievance Redressal: :

If any buyer, promoter or agent has any complaints with respect to the project, they can file a complaint with RERA. State real state regulatory department will try to resolve the dispute within 60 days. If you aren’t satisfied with RERA’s decision, a complaint can also be filed with the Appellate Tribunal within the next 60 days. Even after that if he is not pleased the complaint can be filled to high court and supreme court.

Benefits of RERA act 2016 :

This act is not benefiting only buyers but also agents and builders. RERA infuses credibility by making the sector mature & transparent and helping to Channelize investment into the sector. It will increase the confidence of financial institutions & foreign investors in the real estate sector.

Offense-wise penalties for developers :

The following are the penalties and compensation that can be levied on promoters.

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For non-registration of a project Penalty of up to 10% of the estimated cost of the project.
For violation of other provisions of the Act Penalty of up to 5% of the estimated cost of the project.
For non-compliance of the orders of the Authority Penalty for every day of default, which may cumulatively extend up to 5% of the estimated cost of the project.
For non-compliance of the orders of the Appellate Tribunal Penalty for every day of default, which may cumulatively extend up to 10% of the estimated cost of the project or with imprisonment for a term which may extend up to three years or both.


Offense-wise penalties for Real Estate Agent :

The following are the penalties and compensation that can be levied on the real estate agent.
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For non-registration under project, he is selling Rs. 10,000 per day of defaults which may extend up to 5% of the cost of the property.
For contravention of the orders or direction of the RERA Penalty on a daily basis which may cumulatively extend up to 5% of the estimated cost of the property whose sale or purchase was facilitated.
For contravention of the orders or direction of appellate tribunal Imprisonment up to 1 year with or without fine which may extend up to 10% of the estimated cost of project or both.


Offense-wise penalties for Allottees(Homebuyers) of RERA registered project:

The following are the penalties and compensation that can be levied on allottees.

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Contravention of any order of the RERA Penalty for the period during which defaults continues which may cumulatively extend up to 5% of the apartment or building cost.
Contravention of the orders or direction of appellate tribunal Imprisonment up to 1 year with or without fine for every day during which such defaults continues, which may cumulatively extend up to 5% of the apartments or building cost or both.


*Apartment means block, chamber, dwelling unit, flat, office, showroom, shop, warehouse, premises, etc.

How to file a complaint :

After the implementation of RERA, we are optimistic that the new law will protect our interest. However, the most important question is, how to file a complaint or a case, under the new RERA rules.

So, for this, every state has described specific forms and procedures which are to be followed. The application can also be filed online, as per the format available. For filing a complaint, the complainant has to provide following details-

  • Particulars of the applicant and the respondent
  • Registration number and address of the project
  • A concise statement of facts and grounds of claim

The form has to be filled and submitted with Real Estate Regulatory Authority or the adjudicating officer.


RERA is a huge step forward against thief developers. Till now, there wasn’t any regulator and neither were the rules in place. Delay in delivery of projects, bad material used for construction, changing of sanctioned plans every now and then was the major reason why RERA ACT,2016 came into existence.

However, even after RERA, there are many loopholes in this sector. For eg. It might happen that you wrongly signed some document which gives consent to any changes in agreement or project. Because RERA is just a mechanism which is in place to serve justice to all the parties. So, it is always your responsibility to be alert and get into any contract after due diligence.

I hope this article has helped you in understating RERA act 2016. Feel free to ask any doubts in the comment section.

Should you really take Legal Opinion while buying a home loan funded property?

Are you looking to buy a home which is already funded by a home loan and someone else is paying the EMI?

Does it make sense to rely only on the bank for verification process or should you take the second legal opinion? Most customers have this query when they are buying a property and availing a home loan.

Legal opinion on 2nd property

They are well aware that the FIs (financial institutions) have a panel of lawyers that do this day in and day out but still want to satisfy themselves by getting an opinion from that one ‘recommended’ lawyer that their uncle knows.While it is a harsh truth that no property can be legally proofed to a 100%, there are a couple of things which need to be considered while deciding to take a second legal opinion.

Let us consider two kinds of properties – one where there is a large apartment complex and second where it is an individual plot or a small apartment complex.

Case #1 : Large Apartment complex

When a corporate real estate developer intends to purchase a large parcel of land and develop it, they know they are going to invest a huge amount of time and money.

Large apartments in India

They already have the experience to pick up the right projects. They also have a tried and tested lawyer or legal department to check details and guide them through all the steps till they reach the point of selling apartment units.

It’s at this ‘late stage’ that the bank receives the set of papers and the em-paneled lawyer comes in and usually it is a matter of checking off the title, EC’s (encumbrance certificate) and other revenue records.

Such developers also have the financial might to settle any disputes that can be a legal hassle.In the unlikely event that there is a problem in the title / parent documents, then the owners can join together to fight against the developer or any other party.

Division of costs and burden

The financial costs can also be distributed, reducing the burden. However, this is likely to be an unwieldy and argumentative coalition so this is not a major advantage. To sum it up, these kinds of properties developed by a reputed builder are ‘less risky’.

In any case, it is a good idea for all buyers to keep a copy of documents pertaining to legal such as the legal opinion, copies of all documents including sanction plan and other statutory documents as far as the land on which the project has come up is concerned.

Case #2 : Individual House on a plot

Coming to the other classification of property – individual house / plot or small apartment complexes, it is worth taking a second opinion. The first and basic reason is that it is good to have a legal opinion in place.

Bunglow in India

The FI treats its legal opinion as confidential and does not share it with the customer. So, if the customer wishes to understand the intricacies of the property and also have a document to refer to at a later date, this is necessary. Even if the property is to be sold, the potential buyer would have more confidence considering that the legal clearance had been taken earlier.

However, one has to consider the cost of the opinion. It could be prohibitive considering there are payments to be made including the FIs processing fees, insurance premium and stamp duty of 0.25% to the government for availing the loan.

Hire a lawyer to do title search

The next best option is to commission a lawyer to conduct a title search on the property and give a clear report. This is different from what the FI em-paneled lawyer does (which is a title clearance report, checking the EC (encumbrance certificate) and an additional check of the approved building plans).

A title search report essentially consists of going to the sub registrar’s office and verifying the revenue records, ensuring there aren’t any open encumbrances or claims by any party. Usually, this is done for a period of 30 years. This will be an additional and strong check for a clear title to the property.

You will find a lot of articles out there detailing the list of documents one needs to check before purchasing a property. Many of the common issues are also listed. These are definitely worth perusing and acting upon. It is important to remember that purchasing a property is not the only important aspect, having peaceful possession of it is equally important.

This is a guest article by Pravin Mathew from Bangalore, who is a reader of this website. Incase you have any questions, we will be happy to answer it in comments section.

I don’t own a flat like Techie guys – So What ?

This is a guest post which is already published on Ravi Karandeekar’s blog, which is an excellent blog when it comes to real estate (more related to Pune). Ravi discusses various projects and his experience meeting with Builders and various stories of real estate frauds etc.

not owning a house

A few days back, I read a real-life story of a female IT engineer in Pune and she shared various aspects of her life in detail, which I thought should be read by more and more people and I took permission from Mr. Ravi, if I can republish his article on this blog, which he agreed to and I am thankful to him.

Here is a great write up below.

Hi Ravi,

I regularly follow your blog and I like your sarcastic style of writing. I have read several of your articles where you have highlighted the importance of living a quality life versus living a life under pressure to own a house as soon as possible at any cost in huge debt.

I think in life we have to make certain choices where we cannot achieve what others can because our circumstances are different. Mine is another such case.

I am an IT engineer and a daughter and a wife.

I am the only child of my parents so their entire responsibility is on me.

My parents are simple middle-class people who worked hard, saved every penny so that they can give me a comfortable life and a good education.

They sacrificed nearly every personal need of theirs so that I can go to a convent school, become an engineer and have a happy childhood with all worldly comforts. Beautiful clothes, birthday gifts, toys, ice creams, picnics. Everything was for me and only me.

We lived in the heart of the city

Until I graduated we lived in the heart of Pune city in our very old ancestral rented home. They did not even buy a new flat within the city limits although they could have afforded it.

If they had bought that flat they would have had to cut out almost all the comforts from my life and quality education.

So they bought a cheap apartment on the outskirts in a pathetic locality (just as a backup) while we continued to live in our ancestral home.

That 1.5 lakh difference mattered to them. And they made a choice – Me

When I graduated eight years back we had to move out of our ancestral home.

Our backup apartment is on the 3rd floor with no lift and my mother has health issues because of which she cannot climb those 3 sets of stairs.

So eight years back, at the age of 22, I had to think about our future accommodation.

My starting salary at that time was 24K and the rent was 7.5k. My father retired around the same time with a government pension. There was not enough money to buy a new flat in the city.

I had 2 Options

So there were two options.

Option 1: Save that 7.5k of rent for my future life and let my parents stay on the 3rd floor in a sad locality.

If I save the rent money I may even be able to buy a home inside the city in 7-8 years.

Or in that money, I can have a lavish wedding.


My mother’s diabetes had impaired her health and climbing stairs would have been extremely difficult. She compromised saying “I won’t get out of the house much so I don’t have to climb the stairs”. From age 55 she would have been trapped in a house for months like a caged animal.

My father too was old. The neighbors were not nice. Water supply problems were there. Medical facilities, our relatives and all the other things that we were used to would have been unreachable for us.

Parents were ready (as always) to live that life as of course they don’t want their daughter to spend 7.5k every month. Our scrupulous traditional middle-class parents will never touch their daughter’s money!

Option 2: Spend the rent money, I will have fewer savings and let my parents live a decent life.

All their life they sacrificed and adjusted. Don’t they deserve a good life at least during their last years?

Importance of TIME in life! YOLO!! (You only live once)

My parents are not going to have these last (healthy) years again!! Soon they will cross mid-sixties after which they will be too old to even get out of the house.

This is the time window (55 to 65 years) when I can give them the lifestyle they deserve as the proud parents of a highly qualified daughter. So I take the decision and rent out an apartment (against my parent’s wishes).

Our backup apartment stays locked.

Eight years have passed and option 2 has worked out really really well!


We live in a beautiful spot in Kothrud surrounded by greenery and beautiful bungalows.

My mother goes for walks every day since we live on the ground floor. She enjoys going to the market and being able to live a normal life.

My father is thrilled as there is a katta nearby where all the retired members like him meet in the evening.

All our relatives live nearby. We live in a 30-year-old 1 BHK and the floor tiles belong to the 70s era. But the people here are so friendly we live like one big family.

I can get a flat on rent in a high rise in a cosmopolitan atmosphere in Baner or Wakad (where I would be very happy btw ).

But here we are surrounded by Marathi families like ours. There is an excellent hospital nearby. The convenience, homeliness and the safety of the neighborhood are important to me. The society does not have amenities like swimming pool, club house but my home is filled with happiness.

My Priorities

Years passed, I got promotions and salary increased. I was easily getting a home loan. 1 BHK was a piece of cake and 2 BHK was also possible.

But turns out not buying a flat was very wise. There were many things that had to be handled first. We planned our monthly budget well, saved most of my salary, spent smartly and also had a little bit of fun.

Four years back my mother had a heart attack. Several hospitalizations and a bypass surgery set me back by around 8 lakhs.

But that was easily managed. I was never tense about money and my parents were relieved that we don’t have to borrow from anyone.

I had managed my finances so well that I gifted my mother a pair of gold earrings 2 months after the surgery for a speedy recovery!

I am happy too!. I was able to save for my own wedding. Since our wedding expenses were well within our reach we were able to enjoy it completely.

I have also been able to fulfill some of my dreams. I am passionate about travelling and I have been to my dream destinations Himachal Pradesh, Kerala, Dubai and New York.

In these eight years, I have lived a fulfilling life. Dining out in fine restaurants, going shopping in malls are some of the things we never thought we would do.

Parents/Family suffering because of loan

My folks are happy that I am able to have fun and don’t have to scrimp and save like a person in debt. I do not frown like a debt-ridden son when some unexpected expense turns up. I have seen the scenes from movies\tv serials where the son reproaches his parents when any expense comes up as he has a big loan and says “Baba atta Kasa Shakya ahe! Tumhala Kalat nahi ka loan ahe” (English meaning is – “Dad, How is it possible right now, dont you know there is  a loan”). Way to go, son!

This is what you give your parents in return for their entire life spent on you!!. Unbelievably, I have seen this scene in real life also in many homes!!!. These guys have a 2 BHK and a Sedan worth 10 lakhs but they will frown upon if their parents\wife have to have something basic.

There was a time when my parents made a choice between me and their dream home. When I grew up I made a similar choice. It’s okay if I don’t have my own flat at the age of 26 like IT engineers do.

I will have it when I am 35 or 40 years old. But these 10 years of my life were important to me.

Spending on top-notch medical treatment, living comfortably, travelling around the world, saving for my wedding, supporting my husband was my top priorities.

All the while I am saving money aside for my dream house too. I am halfway there, slowly and steadily I will get there. You must work out a plan that suits your circumstances and lives happily because you only live once.


2 Tough Question for all readers

  • Do girls take the decision of buying a house in a more sensible way compared to guys?
  • Do males face more life issues when it comes to “home ownership”?

Disclaimer: This is a personal story and views by 1 person depending on her life, her experience, and her circumstances. Let’s not judge male/females by this one article alone.

Please share your perspective about this article and what do you feel about the issue? How is a male life different then a female when it comes to buying a flat considering how our society has shaped up to date.

I would like to hear your views and stories in the comments section.


55% of Software professionals in India, dont own a house [Survey Results]

Today I am going to share with you some data related to software engineers and their home ownership pattern. But before you move ahead, I want to share with you that approx 55% of the software engineers who took our survey did not own a house.

Survey with 10,917 participants

Recently I ran a very large survey which was taken by around 10,917 participants. Out of those 4,940 people were from the IT Industry. I had asked many questions related to real estate ownership like how big houses they own If its bought with a home loan or not and if they don’t have a house, what kind of rents are they paying apart from many other questions.

As a big portion of this blog visitors is software professionals, hence I thought let’s do an article only for software professionals in India as of now. I will publish a detailed report later on the overall data, but as of now, you can look at 3 big and important information.

A survey on home ownership among Indian software professionals

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So what did I find in this survey? I found out that out of 4940 software professionals who took the survey, 2706 of them said that they don’t own any house or real estate property. That around 55%.

Majority of software professionals in India bought house with home loan

I know this is not a finding. Almost everyone buys a house on loan only because very few people can pay the full amount on their own and this gets confirmed by this survey. Around 81% IT professionals said that they took home loan for buying the house, however 10% people got the house in inheritance and only 9% people paid the full money out of their pocket, which I think is a good number.

90% of the house owners (IT professionals only) own either 1 house or maximum two house. Only 10% house-owners have more than 2 properties.

Out of 100 software engineers who dont own a house, 36 work in Bangalore

If we look at the top 6 cities which are into software jobs creation, we found out that the higher the cities reputation into IT Industry, higher is the number of non-home owners % wise.

I mean out of 4940 software engineers, 1533 work in Bangalore and out of those 886 said that they dont own a house, which is 36% of the total IT population which took the survey. So 36% of software engineers who dont own a house, live in Bangalore, compared to only 10% in Mumbai or 11% in Chennai. Here is the full data

citywise data of software engineers realestate ownership

Who is responsible for the high real estate prices in big cities?

In this article, I want to understand what you all think about high real estate prices? What is the reason behind it? Can we say that to some extent (if not fully), the IT professionals contribute to the real estate prices increase?

I know not all software professional earn very high salaries, but in all the big cities, there is a section of IT class which earns a very handsome salary and they suddenly use it to take home loan and buy a house either for consumption or for investment purpose.

This is true for many other Industries as well, but do you think IT sector contributes much more than other industries? I do not want to make any judgment here, but I want to hear from IT professionals who read this blog about what they think about this?

software and real estate price rise

Some people told me that we can’t blame software professionals for high prices in real estate, which I agree. No one can blame anyone, but I wanted to know what thousands of people from IT background and non-IT background think? What is the perception?

So I separated non-IT and IT people from the survey and I asked them the same question and looks like people from IT industry are of stronger opinion that real estate prices are high because of IT industry. While 39% people from non-IT background said clear “NO”, only 28% people from IT background denied that IT industry has contributed to rise in property prices. Below are the results of survey by around 10,917 participants out of which 45% are IT professionals themselves.

IT industry and real estate prices

What people have to say about this?

Let’s hear some people who have shared their views about this topic and how they feel that IT industry is somewhat responsible for high real estate prices.

real estate high prices in India

Snapshots taken from Asan Ideas of Wealth Facebook group

But 55% of Software professionals still don’t own a home

At the same time, we have a big number of software professionals who cannot afford a house because they don’t belong to that very high earning class. Software industry like every other Industry has its own issues. A big percentage does not earn very high salaries and that is confirmed by the survey also.

Salaries in IT industry is highly skewed

Only 12% of IT professionals who were surveyed, are earning more than 20 lacs per annum where as 57% of the participants are earning below 10 lacs. Now that’s just 80,000 per month and I am sure, if one is living in a city like Bangalore, Pune or Hyderabad, it will not be considered as a very high income because given the expenses these days, people at that salaries would hardly be saving anything significant.

As per a website payscale, which has an extensive database of various jobs related information like the skills needed, salaries etc. The average Salary of an experienced Software Engineer in India is close to 13 lacs (with experience of more than 10 yrs) . Note that this is an average number

Average salary of software engineer in India

Hence, while there are many IT engineers who earn big amount (many a times double income family), and who can afford to buy a house easily. At the same thing, there are many software engineers who do not earn a big amount and are struggling to manage their expenses. Here is one perspective

real estate high prices in India

I analyzed the results of 10,917 people who took the survey and found out that if you look at the percentage home ownership industry wise, then software industry is not at all at the top. Infact, it’s quite below average. But then we are talking of only big cities (top 10 cities of India). On top of it, IT Industry has somewhat slowed down in last 5 yrs and its not at its peak now. You can read this long thread on IndianRealEstateForum where people discuss about the impact of IT slowdown on the real estate market.

So basically we are trying to see that out of 100 people who belong to XYZ Domain, what percentage of them owns a house. Domain here means Software, Medical, Govt Job, Business, Marketing, Sales, Engineering * Finance. There are many other domains, but we are not considering them, because there was not enough data. For each of the above domains, we had at least 200 data points each and at times more than 500 or 1000. Here are the results.

industry wise home ownership India

I had kept Retired also as one of the categories, because that would be a big number. So we found that the those who are retired have the highest home ownership which is kind of obvious, but after that business class has the highest home ownership ratio of 52% , followed by Manufacturing and Medical, but they are not having very big margin.

IT Industry ownership stands at 45% and we can be kind of very assured of that because that comes form 4940 people data, which is quite huge.

Also, note that the lowest home ownership is among Sales and Marketing Professionals & Even Pharma, I don’t have much interpretation for that, but may be it’s because they might have a big variable component in their salary and that might be a deterrent in their home buying. If you have insight on this, please put them in comments section.

Question for you ?

We want to know from you, what is your views on increasing real estate prices in most of the Indian cities and do you see IT industry contribution to it? Please share what you think in comments section.

Buying Land or Plot in India? – Here is a 10 point checklist which you should know before purchasing any property in India

Are you looking for buying a plot or a piece of land? If not today, maybe you have this dream of owning a plot sometime in the future.

Buying land or plot has in a way to become a premium thing these days especially in big cities because the land is scarce commodity and the pride is associated with having your own plot where you can build the house as per your wish.

In this article I will tell you 10 important things that you should know before purchasing any property in India.

buying land or plot

If you happen to visit any real estate exhibition, you will come across many plots projects along with the residential apartment schemes. These plots are generally within 20-100 km of the city radius and often marketed as a second home or vacation home.

On top of it, the pricing is attractive (often within 5-20 lacs) and there is also the facility of installments which makes it too easy to own a plot. The deal is often paying a token amount and pay the rest amount in parts (EMI).

However, a common man is often not aware of the risks associated with buying land and the complexities involved in it. Buying a land is a very different kind of ballgame altogether compared to buying a flat (which is much safer), and today I am attempting to make things easy for you to understand.

My Personal Experience

I have personally visited a few plot schemes myself over the last few years (near Pune). I have interacted with the salespeople and have some experience in this area. Hence, I will try to share what I know with you. If you can also add to my points, I would love to incorporate it into the article.

This article will mainly help a newbie with the simple checklists which they should look at before buying a plot or when they go to visit a scheme or if they are interacting with the salesperson (here is a checklist for buying apartments).

Note that this article is mainly keeping in mind plot schemes or gated communities, but most of the things will also apply for a standalone piece of land.

1. Is the land on the name of the builder?

The first question you should ask the salesperson is that if the builder has legal rights to sell the land or not. Find out who is the current owner of the land? Is it a builder himself or not?

A lot of builders either buy the entire land from the previous owner or enter into a joint agreement with the owners to sell or develop the land and sell the plot scheme. No matter what, make sure that this part is clear. Ask for the documents which clearly show the builder has legal rights on the plot himself.

Here is a story on how small builders do frauds

2. Has the developer taken a loan from Bank for the project?

Builders often take a bank loan for the Plot schemes and even residential schemes. It’s a sign that the builder is more serious about the project and it’s also a positive sign, because if there is the money with builder which will be specifically used for the project development.

The builder is not dependent fully on the advance money the home buyers. It shows that there is a cash flow dedicated to the project and the issue of cash crunch will be minimized.

It’s not always the case the scheme has a bank loan, but still enquire about it. If bank loan is there, it’s proof that the bank has done thorough verification from their side on the legalities and only then granted a big amount (often in crores)

3. Where is the NA order?

By default, all the land in India is ” AGRICULTURE LAND”, unless it’s defined for some other purpose by the govt. So a piece of land is either agricultural or non-agricultural (commonly called as NA in real estate industry)

Agricultural land can be used for Agri purpose, whereas if you want to do any other thing other than agriculture then one has to first convert that Agri land to non-agricultural (NA)

However just because a land has got NA status, does not mean that one can start using it for residential purpose, because there are various types of NA like

  • NA – Commercial
  • NA – Warehouses
  • NA – Resort
  • NA – IT
  • NA – Residential (this is the one where one can build a residential house)

So if a plot of land is type NA – Resort, that means that that one can build a resort there, but can’t make a residential scheme. If a plot is NA – warehouse, then one can build a warehouse there for commercial purposes, but can’t make residential schemes and sell to the common man.

So you need to look for “NA – Residential” Plot

So, the point is that you need to ask the builder/salesperson, if the plot of land you are planning to buy is “NA-Residential” or not? Ask them for a copy of that. A lot of other kinds of NA plots are sold as “NA plot, collector approved” which is a misleading thing.

I am attaching a sample NA order below (from Maharashtra) for you too just get a feel of how it looks like

na order sample copy

Another thing you have to be very cautious is “Proposed NA” schemes. A lot of builders try to sell a non-NA land telling you that its a proposed NA land, means he has initiated the process of converting a land into NA scheme, and the papers are already in process and “very soon”, the land will become NA-residential and how you will then reap the benefits of the high prices.

While there are chances that the conversion happens, but in most of the cases, its a gimmick to sell a cheap land at high prices and often buyers are stuck in the project, because the land is nothing more than a piece of crap later.

Don’t fall for it, because converting an Agricultural land to NA-residential is a very lengthy process in which a lot of approvals needs to be taken for it. There are cases where it’s been 10-15 yrs and it’s “still in process”

I suggest you read the following experience to understand more about this point.

Proposed NA plots

So, ask the salesperson to show you the NA order papers. Have a look at it yourself and do not fall for the promises like its coming in 2 months or next week or anything like that. Don’t get stuck into those kinds of deals.

Understand one thing very clearly, NA plots with clear title are limited and scarce, & often you will have to pay good price for it, If the land price is dirt cheap and it’s promised as NA-residential, there is a good chance that it’s fake or very very far away from the city limits.

4. What is the FSI for the plot?

Suppose you bought a plot of size 2000 sqft for building the house on it.

How much construction can you do?

Here comes the concept of the FSI or Floor space index. FSI simply means how much construction can be done on a piece of land and it depends on the location of the plot.

FSI of 100% means if you have a plot of size 2000 sqft, you can build a house of 2000 sqft on that. If the FSI is 75 %, then you can only build 1500 sqft of house on that 2000 sqft land.

The project I recently came across:

I recently came across a project called Royal Purandar near Pune when I went to visit a plot exhibition. The lady at the counter told me that the plot sizes start from 5000 sqft and go up to 40,000 sqft (which is very big). I was shocked to hear about so big plot sizes because 5,000 and 10,000 sqft plots are quite big.

However, when I asked her what is the FSI of the plot, she told me it was just 15%. So with FSI of 15 %, if you buy a plot of 5000 sqft size, you can just build 750 sqft of house, which is generally a small bungalow.

There is nothing wrong with that, but you should be at least aware of it.

Why FSI is very very important?

So understand that FSI has a very important role to play when you will construct something or even when you will sell the plot to someone else. Imagine 2 plots which are of the same size (2000 sqft), but with different FSI like 50% and 100%

  • Plot A (50% FSI) – You can make just 1000 sqft home on that, which will be like a 2 BHK)
  • Plot B (100% FSI) – You can make a 2000 sqft home, which will be like a 4-5 bedroom Bungalow.

But then it might happen that Plot A is selling at 10 lacs and Plot B is selling at 15 lacs, and you might say – “Plot A is cheaper because its less priced and the size is same (2000 sqft)

One important thing you should know is that FSI for agricultural land is very small generally. In Maharashtra, it’s just 4 %, which means even if you buy a 10,000 sqft Agri plot, you can only do the construction of 400 sqft on that land.

You should definitely ask the builder/salesperson to share the document which mentions the FSI on it. Judge the price of land only after learning about FSI, not just the area.

5. What are the other projects done by the builder?

You should ask the salesperson about the other projects done by the builder. Check if they have done other similar projects in the past? What was the response to it? What is the quality of those projects? Were there any legal issues with those schemes? Are the buyers happy with the builder work there?

You can often get some clue about all this on the internet or the online forums. Just go to the website of the builder and find out what are the other schemes he has done. Search with the other project names and see what others are talking about?

If you get a chance, I suggest paying a visit to past projects once. Spending half a day in this will only help you further to take the decision.

6. When will the Sale Deed happen?

You will often hear about the “agreement to sell” which is executed when you book the flat/plot and clear your initial payments (around 35-40%). This is the time when you pay stamp duty and registration charges. Once the agreement to sale is completed, a lot of buyers think that the flat/plot is registered on their name and now they are legally safe.

However, this is a myth and the “agreement to sell” does not make you a valid buyer. The agreement to the sale (often called ATS) is just the AGREEMENT TO SALE, which means it’s an agreement between buyer and seller on the initial points and terms under which the sale will happen in the future.

It mentions the terms and conditions of the deal, how much initial payments are you making along with cheque number and also the future dates, by when you will clear the payments, etc.

What is the “Sale Deed” document?

“Sale Deed” is the document that needs to be registered in the office of sub-registrar in order to make the sale happen. Unless the sale deed is done, you do not become a legal owner.

Hence, ask the builder or salesperson about the sale deed? When is it going to happen? The sale deed is generally done, only when the builder gets all the dues from your end.

7. Will I get an individual 7/12 extract in my name?

Let me first help you understand what is “7/12 extract”? It’s a term which you will often hear in states like Maharashtra and Gujarat. In Karnataka its called 7/12 Uttara. It’s the document maintained by the revenue department which mentions how the land moved from one owner to another owner in the last 30 yrs.

So in a way, its a history of the land and you will find exactly on which date who sold to whom. This way you will find out who is the current owner of the land also.

For example:

If person A sells the land to person B, then it’s important that the name is 7/12 extract is changed from A-> B. Unless B name is not registered in the 7/12 extract, B will not be a valid landowner.

So it’s important to ask the seller about the 7/12 extract. There are many complications around this, like if you buy an agricultural plot from the seller in the name of “NA plot”, then your name will not be there in the 7/12 extract, because there are restrictions on who can buy the Agri land and even the minimum size restriction is there.

Also at times, the builder will tell you that the name of the builder will be there in the 7/12 extract, and not yours. Or the society name will be there in the 7/12 extract and not yours.

Also at times, what happens is that a big piece of plot is broken down into small land areas and sold to many people and a joint 7/12 is made, where all the buyer’s name is there in 7/12 extract (see the conversation below), which makes things very complex in future.

7 12 extract buying land

So make sure you enquire on this aspect properly, and if an individual 7/12 extract will be done or not.

8. What will be the per annum maintenance after buying the plot?

Once you buy the plot, there is annual maintenance that needs to be paid which goes towards maintaining the basic amenities like security, upkeep of the project, gardens, water, security etc. It should not be a surprise for you later. This maintenance is generally paid on a yearly basis and it’s proportional to the plot size. For example, if it’s Rs 4 per sqft and your plot size is 2000 sqft, then your maintenance per year would be Rs 8000.

9. Is the plot on flat land or on a slope?

Don’t assume that your plot is always going to be a piece of flat land. If it’s a big project, it might happen that the overall land which builder has acquired is uneven or has slopes. So when it’s divided into several small plots, many plots might be on the slope or it might be uneven.

You will ask what are the main issues when we build a house on land with slope or an uneven plot?

Below are some important points regarding the land on the slope from this website

If the plot is on a significant slope, either the land will need to be cut and filled, or you’ll need to build a house that takes that slope into account. It’s worth remembering that while these things might make your house more spectacular, they’re also likely to cost a fair bit more.

Depending on the angle of the slope and what’s built on neighboring properties, a slope can also reduce your exposure to sunlight – which in turn can affect how much light you get in living areas, and your potential to harness the sun both for passive solar heating and for collecting solar power.

Where we live in the southern hemisphere a north-facing slope is ideal for solar access – a steep south-facing slope not so much.

Below is how the project brochure looks like when its shown to you (often when the project has not yet launched or into the exhibitions)

project layout for plot

By seeing this kind of image layout, you never get an idea if a particular plot is on slope or not. So it’s always a good idea to ask this question and verify it by visiting the site yourself.

10. What are the arrangements for water and other basic amenities?

Always ask how they are going to provide water and other basic amenities. Is it going to come from the municipality or the gram panchayat? Or they are doing their own arrangement for it?

And also ask some other questions like :

  1. What about electricity?
  2. Are they going to arrange for a individual electricity meter?
  3. How much are they charging for it?
  4. If the plot/land is too much away from the main road, then what about the access road?
  5. Who will develop it?
  6. What about fencing of plots?
  7. What about security?
  8. Ask everything in detail and in points.

With this, I think we have completed the main high level 10 things you should ask when you are buying a plot. Below is another video on this topic where some industry-level people are talking about the same issue of buying land and the complexities involved.

I strongly suggest watching the 15 min long video below

Now we will see some important points which you should keep in mind before you buy the plot.

Important tips for someone buying a land

  • Do not hurry. Period! – Buying land is an emotional decision and often salespeople use a lot of tactics for selling the plots (just like flats). Don’t believe the seller when they say that just 12 plots are remaining or the prices are increasing next quarter when they do their “Mega – Launch” . It never happens.
  • Make many visits to the plot – Don’t book the plot just after one meeting or without visiting the plot yourself. I would say that one should make at least 3-4 visits before the deal. Try to visit the plot once when your salesperson is not on the site. Just make a surprise visit and ask others on the site about important points and you might find some new information about the plot which was not told to you
  • Check the nearby development yourself – Don’t believe the salesperson about the nearby development information. If the salesperson says that a new flyover is coming up nearby or if there are 3 colleges within a 2 km radius, just find it out yourself.
  • Talk to people nearby the plot – If you can go a bit further, see if you can talk to people who live nearby the plot. Make a random visit and then ask the shopkeepers nearby, houses nearby on the points which concern you.
  • Bargaining for the price – Often the list price quoted for the plot is never the final price. In a country like India, it’s a well-known fact that there is always bargaining. So you can easily assume a 5-10% margin. Ask them to reduce up to 10% price and then settle for at least 5%. Take a lot of time to decide and often you will see the prices coming down. It’s very important that you do not show your desperation on buying and also share with them some names of nearby projects and how you also like them and you need a strong reason to buy a plot from them
  • Search online about the plot scheme or the area of land – Always search for information about the project or builder online. You will often come across others who have visited the site, or interested in the same project, you can connect with them and discuss it

I hope this article has given a good knowledge to you about the important things you should ask and keep in mind before you buy a plot into some scheme.

Beware of small unknown builders for plot projects

By now I think there is no need to tell that land buying is very complicated and one should not attempt it if you do not have the risk appetite for it.

There are many small flies by night people who know how mad people can get to own a plot of land and they come up with schemes where their sole intention is to make money for themselves and cheat customers. Please see this below video where some buyers are sharing their real-life experience of buying a plot and getting cheated.

I would strongly recommend that you involve a good property lawyer for verification of documents and the legality of the project. It would increase your cost a bit, but then it becomes a more secure investment.

Please note that all the points I have mentioned above, are based on my knowledge and understanding. If there is any correction to be done, please share that with us. Also please share your comments and views in the comments section below.

8 essential checklist for buying property by a real life architect

Today, a real-life architect is going to share with you some of the most essential things investors should check before buying property in India. Do you want to know what are the topmost things to look into the property before you take that big decision of booking the property?

Do you want to know what are some of the tricks builders employ and how they make decisions? Mr. Abhijeet Patki, a practicing architect, who is also a consultant to a reputed architecture firm in Mumbai has agreed to share his knowledge with all of us.

Mr. Abhijeet is one of the readers of this blog just like you and when I asked him to write an article about this area, he agreed instantly.

Mr. Patki has an experience of more than 11 years in the field of architecture and interior design and has worked on different kind of projects that includes IT Parks, Commercial Buildings, Residential Projects, Heritage Building, and many commercial interiors projects. So I hand over to Mr. Patki to share his wisdom and knowledge with you all.

Checklist before buying property in India

8 important checklist points before buying property

Detailed descriptions of this checklist are done at a later stage.

[su_table responsive=”yes” alternate=”no”]

Checklist #1

Project site or Land

Checklist #2

Approvals from statutory bodies

Checklist #3

Flat Layout

Checklist #4

The view outside your flat

Checklist #5


Checklist #6

Luxurious and Affordable homes

Checklist #7

Fire Safety (In tall buildings)

Checklist #8

Big versus Small Developers


At some point in time in our life, everyone feels of owning a house. It may be for their own stay or as an investment. Depending on the stage of one’s life, buying a home is associated either with ambition or necessity or influence through various parameters.

It is taken for granted that it is THE ultimate investment to secure one’s future. Surprisingly, despite not having a regulatory body, an investment in real estate is assumed by many as a safe bet – safer than Equities, maybe because most of them are fortunate enough to not have faced any issues with their properties. However, the risk factor in this investment is equally grave like any other modes.

Without proper diligence, your dream investment certainly comes with a potential risk that can have lifelong repercussions on your livelihood. By no means I intend to say that all buyers are ignorant about the property survey before finalizing it; it is just that their analysis about their ‘to be’ property is limited to generic factors.

Usually, any Indian buyer looks broadly into the following parameters while selecting a property. Interestingly, a buyer buying property for his stay would look into the aspects in an order as mentioned below, while an investor will reverse the order except point #2 which will be on top of the list.

  1. Location & convenience factor.
  2. Rate of the property in comparison to the market trends in the vicinity.
  3. Surrounding neighborhood.
  4. Amenities offered by the builder.
  5. Building aesthetics.
  6. Expected rate of appreciation in the future.

What about Flat Layout?

You may be curious to know as to how I could not include an important factor – ‘Flat layout’.

Indeed, it is one of the most important factors while buying the house, but the price of the property generally takes precedence above the layout. Here the typical Indian mentality comes into mind – “Our budget is Rs. X Lakhs & we shall buy the best (bargained) property within our limits”.

Thus, in order to stay within their planned budget, many people let go of a flat that has a good carpet area or a better layout.

While it is a debatable topic about increasing a budget for a better property or buying a suitable property within a planned budget, all that I want to say is that in most cases, the price of the property governs the selection of the flat and not the layout.

8 factors every investor should check before buying a property

Anyways, moving ahead, I am going to make you aware of some very important factors that should be considered while buying the flat which is usually overlooked or is unfamiliar to the common man.

1. Project site or Land

The very first check that one needs to do is about the land on which the project is planned. The land should be a Non Agricultural land (often called NA) and should be registered with the local municipal body.

Each property comes with a ‘Property Card’ which mentions the details of the current owner of land and its status. Apart from the type of land, one should check in the city ‘Development’ Plan whether the land is earmarked for any reservations such as – playground, police station, public welfare amenities, religious structures, slum rehabilitation, etc.

For any city development plan, you will generally get it from the website of the municipal corporation. For example, in the case of Pune, you can get it from here.

Below you can see a snapshot of how it looks like

Pune development plan

No residential development can be allowed on lands that have reservations other than that for residential projects.

If the land had reservations & the developer claims that land usability has been changed with local authority permitting the same, then please ask for the proof for ‘Change in Land Use’ from the local body & State ministry of Urban Department, supported by valid approvals / NOCs covered in subsequent point.

Further, inquire if the land is a freehold land or leased one. If it is a leased land see the contractual documents relative to lease – lease tenure, usability, other conditions etc.

2. Approvals from statutory bodies

If there is any parameter that is of utmost importance while choosing a property, then it is this. Your property has no value if it has not got required approvals from the local authorities (municipal corporation or likewise).

Sellers advertise in a most generic manner in one line “All approvals in place” as they are aware that nobody will go deep into the investigation of the approvals.

I am located in Mumbai and I can tell you that any project that is planned to be executed in Mumbai requires more than 100 permissions / NOCs from various bodies and during different stages of the construction. This document gives you a good idea for these permissions and NOC required in various states

Ask for approvals form builder

As indicated earlier, the list of approvals / NOCs is not exhaustive and varies from cities to cities. It is recommended to investigate the status of the approvals with the builder, see the original documents before you make any monetary transaction. Yes, it is a bit complex to understand the approval process, inquire about the permissions, etc.

However, one can always appoint or seek advice from a local municipal leasing consultant at a nominal cost to carry out an assessment for you. It is a small price that you pay to safeguard your big investment and you can rest assured about the legal intricacies.

Many investors/buyers fall for the lucrative offers during ‘Pre Launch’ of the project. The attractive prices make the buyers hasty in buying the property. However, buyers should be aware that the Pre-Launch offers are marketing gimmicks and generally approvals are in the process during this stage, thus posing a risk to your investment.

3. Flat Layout

This is another important aspect to think about before you finalize the property. This becomes a family’s habitat for years to come. Regardless to say, the flat should provide you comfort, joy and a sense of complete satisfaction.

Taking all members of family in confidence, it should become a unanimous choice and one cannot leave a chance to regret the choice at a later date.

Important points one should remember

a) Your Life Style – First and the foremost thing you need to evaluate is whether your current lifestyle or routine would remain as it is or get better OR you would have to compromise on certain aspects.

If you anticipate a well-informed compromise & are still ready to buy it, then you may take that in your stride for a few days or even months. But deep inside, you would start regretting that compromise as the years go by and as you get used to it.

We buy a property for our betterment but if that is not happening then it becomes a liability. This point is more important for ladies in families because, in India, houses are run by our mothers and wives. If they are not happy, no member of the family can be.

b) Do not fall for the saleable area figures – Saleable area includes the common areas of the buildings in addition to the carpet area of the flat. Generally, the saleable area is additionally 35% to 60% over the carpet area.

For example: If you are planning to buy a flat with a carpet area of 700 sq ft, then the saleable area is generally between 1000 – 1300 sq.ft. which includes the common areas like – lift lobbies, terraces, clubhouses etc which is proportionately divided among all flat owners.

The cost of the flat is generally projected in a saleable area which is actually wrong. Carpet area should be of primary importance to you as you are going to use this area for your habitat, hence try to do dealings on carpet areas instead of saleable areas.

c) Carpet area is important – Check the room sizes and the carpet area of the flat you are choosing. A carpet area is a usable area measured from wall to wall. In a layman’s language, it is that area where you can lay your flooring or carpet.

Room sizes should be adequate for us to maneuver comfortably after all the furniture is placed. Room shapes should be ideally rectangle or square.

At times developers concentrate more on building elevation/form to make it prominent in the locality but that can result in odd shape rooms or acutely angled corners were placing furniture is not possible. It just becomes a waste of space; yet paying for that area is inevitable since it gets counted in the carpet area.

In the adjacent image, you may note how tricky or difficult it would be to plan furniture in the odd shape bedroom and the living room. Also, the toilet is of a funny shape. To ensure that room sizes and shapes entail you to use each and every inch of the space.

bad flat layoutd) Vaastu compliance – Many buyers are stringent about Vaastu compliance of the flat – whether it is east facing or west facing, whether or not the entry is in south etc. This is again a subjective factor with opinions varying from buyers to buyers.

Although being an architect, I am not an avid follower of Vaastu principles for an apartment flat, just because I am not convinced with the principles of Vaastu in a mass housing scheme. Vaastu was applicable then when people had their own dwelling unit on their own land.

So, if you are buying a plot or a bungalow, applying Vaastu principles can be convincing, but applying to an individual flat just doesn’t look convincing. Imagine for a moment, that you find a Vaastu compliant flat and choose to stay in it.

However, you later come to know that the plot, on which your building is built, is not Vaastu compliant. Further, in such mass housing schemes, it is extremely difficult to apply and comply with Vaastu principles.

So it all boils down to your ultimate choice – whether you want an apartment flat that is very good in layout but not Vaastu compliant or whether you are okay to compromise on layout and be satisfied with Vaastu compliance.

e) Deviation of room size – Further, it is very necessary to check the actual sizes of the rooms that are constructed. Brochures indicate room sizes uniform for all the units. However, they vary a bit as per the construction. A deviation of 1-2% is accepted as a standard norm because construction is never 100% accurate.

There is always a construction tolerance of 15-20 mm applicable. So ensure that you pay for the carpet area that you get.

4. The view outside your flat

This is a selling point that is hot favorite by the builders. “Sea facing flats”, “Flats overlooking the green fields/hills” and similar panoramic views become a USP of any project.

With the help of advanced software’s & computer-aided renderings, developers even showcase you during the sale inquiry, the view that you would get once you occupy the premises. We all become excited and we get emotionally attached to the property. While a good view enabling adequate daylight & ventilation is absolutely necessary, one has to be very careful of the ‘view’ aspect.

While you would be certainly happy with the view that you may get, you just need to ensure that you would enjoy it permanently or at least for the long term.

There have been instances where the customers have paid a premium price to achieve a great view from their windows but within couple of years, their view got obstructed permanently because of a new building getting constructed on the land adjacent to their building/premises. Here you can’t blame the builder too because things outside his plot, is not under his control.

So, if you are vouching for that great view at a premium price, ensure that there are no chances of development that could obstruct the view and even if there are any in the future, see that the daylight, ventilation & privacy will not get compromised.

In the image below, you can see how the new building on the right has blocked the view of the building on the left. Fortunately, the natural daylight & ventilation for the older building is still intact.

building blocking view

5. Specifications

When we intend to buy an electronic gadget, say a mobile phone, we tend to go deep into its specification – Operating system, processor, storage capacity, battery life, etc. All this study is carried out for a gadget that costs mere thousands of rupees and is with us for a couple of years.

Contradictory to it, a purchase like a property, which runs into lakhs and crores of rupees & which could be with us for decades, is finalized on the aesthetics and other generic factors mentioned earlier. Little do we get into the details of the specifications.

We seem to be satisfied with just the high-level things which are provided to us – wooden flooring, granite kitchen platform, wooden doors, vitrified tiles so on and so forth. But we ignore the specification of those materials.

For example, what type of wooden flooring, can it remain durable with daily floor mopping, what type of wood is used for wooden doors & frame, what brand of vitrified tiles is used, how the waterproofing is done & what is the technique used. All such questions need to be asked to the developer.

Yes, one has to first get appraised with the knowledge in some way, but that shall do a world of good to you. With Google providing answers to any question, it does not seem impossible for you to get into details of materials.

Developers generally limit their capital costs incurring on the interior finishes or items that become a part of the customer’s possession. They simply ignore the aspect of operational costs as the money goes out of the resident’s pocket.

Real-life example – My personal experience

Let me give an example of this. I was involved in a design scheme of bungalow projects in the city of Pune. The bungalows were meant to be of high-end finishes providing luxury to the owners.

All interior finishes were selected accordingly to meet the expectations of a luxury villa. Buyers went crazy over the finishes and it became a strong selling point. However, there were few other items which were equally important but went unnoticed – one of those was the glasses that were used for windows & facades. Everyone knows that Pune has a hot climate and the summers are extreme.

Needless to say that people do require ACs in their rooms. Now the tonnage of an AC depends on the size of the room and size of the window openings. Bigger the window opening more is the tonnage required as there is a considerable heat transfer.

There are glasses available in the market which cut down the solar heat getting transferred through it, without affecting the vision. If such glasses are installed, then there is a significant saving in the AC tonnage requirement which eventually saves the electricity.

But these glasses are a bit expensive compared to standard glasses. Needless to say, that builder chose standard glasses as his capital cost was involved and he was least bothered about the AC requirement and its consumption. You must have now got an idea of how important it is to have materials with appropriate specifications.

To conclude, the materials that are used as finishing items of the flat costs are always bargained to fit in the budget and hence may not be of the highest quality or the one that cut downs its maintenance.

They are all standard products that the developers get at a very low rate due to bulk ordering. Assess the items that have been proposed and if that would require frequent maintenance / periodic replacement etc.

6. ‘Luxurious’ and ‘Affordable’ homes

Developers have started a new trend of marketing their schemes like the one that provides ‘Luxurious flats’, ‘Ultra-Modern flats’ and even ‘Affordable homes’. While it is an individual’s choice of deciding how should be his lifestyle and gaining luxury with hard-earned money is no wrong.

But buyers have to be prudent in knowing what ‘Luxury’ is being offered. Understand whether the luxury is being offered as a spacious flat with a large carpet area or a standard / compact size flat with finishing items with high-end specifications.

If you ask me, luxury is having a spacious flat which will satisfy your needs & also give you good resale value. The other aspects included in luxurious schemes are amenities, spas, concierge services and many more.

While this can be a treat for people who really desire such facilities, for middle-class buyers it can become a big liability because once the builder hands over the scheme to become a society, then the overheads in maintenance can shoot up much folds.

So luxury will always come at a high cost and one has to decide about it with a long-term financial implication.

On the other hand, affordable homes are marketed with a certain attractive price tags. But they are located far from the city center. So the purpose itself gets defeated. Flats can be termed ‘Affordable’ if they are within the municipal limit of that city with good public transport & convenience factors.

But that is generally not the case. It is located far away in areas that have good low rates if you buy resale flats. Further, the specifications used for building materials can be substandard to reduce the overall construction cost. So it is better to check the specifications of all the materials.

7. Fire Safety (In tall buildings)

Tall buildings are sprouting up because of a lack of space in the city. It is also an economically viable option for a developer to go for tall buildings within a city where the development charges are high. Buyers too are excited to live in a tall building where they can enjoy great views, daylight & ventilation.

But what one doesn’t take seriously is the fire safety measures or evacuation strategy in case of emergency.

Below is a nice presentation giving the full specification of how a high rise building should handle various things at the time of construction to combat the fire safety issue. If you live in a high building, please check if your building has things mentioned in the presentation or not.

Builders do provide the fire fighting equipment & fire egress stairs since they are to be provided as per the building codes. However, one should ask the developer, the evacuation strategy envisaged in case of an emergency.

Ask them the fire rating of the walls and concrete structure. Fire rating means the time taken by materials to succumb under the event of a fire. Ideally, it should be rated at 1-2 hours.

Check the refuge area, where in case of emergency, residents are supposed to gather and stay safe till the fire personnel come and evacuate them.

Do take a look at the fire staircase & if possible, do descend by it. This is because, in case of fire, you are supposed to use the staircase & not lifts. A few months back only, there was a case of fire in a high rise building in Mumbai, where people died because they were stuck in an elevator

death in elevator due to fire india

So you should feel comfortable while getting down. Ideally, the builders should provide the fire fighting gadget – water sprinklers in individuals flat too so that in case there is fire, it is arrested by sprinkler burst.

But very few builders are committed to such precautionary measures as they understand the importance of safety. Others limit their scope only in common areas like lift lobbies and foyers.

If you are opting for a resale flat in such a building, ensure that fire fighting equipment is operational & that the society is committed to maintaining it. Also, ensure that all egress paths are free from any obstructions enabling comfortable progress.

8. Big versus Small Developers

It is a general opinion that one should buy property from big, reputed developers as their schemes & construction quality is superior. Someway, buyers feel more reliable on them and are willing to pay more expecting superiority, timely possession, transparency etc.

Let me be very clear that – this is a myth.

There are many small developers too who give equally good service. In fact, prices of the reputed developers are high to cover their marketing cost & branding. You are certain to get equivalent quality of flats from small or medium-sized developers.

The most essential thing is to check their past records irrespective of their stature. So before investing in their property check out the projects they have completed. Get in touch with the residents living in their old schemes.

Inquire with them if they got possession & occupancy certificate on time. Ask whether the process of builder handing over the conveyance deed for society formation was smooth or rough. See how the buildings are looking after a few years – whether they still look decent or have deteriorated rapidly.

Check the monthly outgoing of those societies and if it is high what are the reasons for it. After this survey, you will surely get an answer as to how good the builder is.

I believe with all the points that I described above, you must have got a fair idea about how complex it is to choose the right property and how one needs to be cautious, appraised of all the intricacies involved for selection. The above list is certainly not exhaustive and can be extended further but till then, this should hold good.

By no means am I discouraging anybody from getting into the real estate investment, but it is just a word of caution for buyers & investors.

Quick Checklist while buying the flat

  1. Information about the Land – to confirm if it is NA plot, non–reserved plot, freehold / leased, etc.
  2. Approvals for the projects (Varies from cities to cities)
  3. Infrastructure around the project/building – electricity, water line, telecommunication line, sewerage disposal line, stormwater drain line, etc.
  4. Potential development around the project.
  5. Facilities around the project – Public transport, hospitals, schools & colleges, markets, police station, etc.
  6. Track record of the builder – visit past completed projects
  7. Availability of funds for the builder to complete the project – whether it is a self-funded or bank-funded project.
  8. The overall scheme of the project
  9. Evaluate the probable outgoings once society is formed. More the facilities, the higher the outgoings.
  10. Carpet to Saleable area ratio – Prefer to carry out a transaction on the carpet area.
  11. Flat carpet area
  12. Flat Layout, Room sizes, and shapes
  13. Availability of adequate daylight & ventilation.
  14. Does the planning of the building/project provide comfortable access to senior citizens & handicap people?
  15. Good quality of finishing materials – flooring, kitchen platform, bathroom fixtures, windows, doors, paints, etc.
  16. Guarantee on waterproofing for bathrooms & flats below the terrace.
  17. Fire fighting systems and evacuation strategies.
  18. View from the building / flat.
  19. Do periodic site visits to check the progress and workmanship quality.
  20. Ensure a safe handover of the project from a builder to make a cooperative society.
  21. While buying a resale flat, ensure that the property is a freehold property & that the seller provides access to NOC from the society, Chain of all old registered agreements, Occupancy certificate, share certificate, Maintenance Bill, Electricity or Telephone bill, Property Tax receipt and Registered Sale & development agreement of Builder, Conveyance Deed.
  22. While buying a resale flat, ensure that the water supply is provided by the corporation / local authorities and not by tanker water. If that is the case, then either OC is not available or the water supply line to the area is not available. That will shoot up your monthly outgoings.

Hope you enjoyed reading it and let me know if you liked it. Thank you.

Disclaimer – The information and views expressed in this article are those of the author to create awareness and does not necessarily reflect the official opinion or guarantees the accuracy, completeness, currentness, validity in any way.

Neither the author nor any person acting on their behalf may be held responsible for any errors, omissions & delays in this information or any losses, injuries, or damages arising from its display or use. All information is provided on an as-is basis.

checklist for buying property
About the Author

Architect Abhijeet Patki is a practicing architect and a consultant to a reputed architecture firm in Mumbai. Graduated from the University of Mumbai, Ar. Patki has experience of more than 11 years in the field of architecture and interior design. Ar. Patki has worked on different kind of projects that includes IT Parks, Commercial Buildings, Residential Projects, Heritage Building, and many commercial interiors projects.

Interview with Real estate expert – Mr. Purav Goswami (Gujarat Special)

Recently we met someone with deep understanding of real estate business and strategies to make money from real estate and we thought why not ask him few questions and share with our readers. We are fortunate that he agreed to share this thoughts and share talk one to one with few selected people who are passionate for real estate and want to make from it by finding the opportunities.

Meet Mr. Purav Goswami from Gujarat.

About Mr. Purav Goswami

Mr. Purav Goswami has been into real estate business from last 10 years. He is an active member of renowned Ugati Buildcon Association. He has over 300+ HNI clients from all over the world. He also owns design and architecture studio which provides end to end solution to his clients.

His articles have featured in various newspapers and magazines. He is passionate about real estate sector and is now planning to design some workshop and online program for investors.

real estate opportunities in india

Q 1: Can you please share about your journey so far in real estate market? How did you get started and how do you help others in making money in real estate?

Answer – Well, I have been into real estate business from a long time now. I started my journey working with pharmaceutical company and then slowly moved to real estate sector.  I learnt about real estate and it’s dynamics in a very hard way, in the initial years I also lost a lot of money but it has been a good learning experience so far.

I would like to help others so that they don’t make similar mistakes which I made. I think making money real estate is simple.

I am not saying it is easy. You need to do your homework well, select right kind of property and should know when to enter and when to exit. We help investors in building their real estate portfolio; we guide them and actually be with them in making real estate decisions. According to me buying real estate is not about having or not having money, it is about making a BOLD decision.

Q 2: You have primarily kept your focus on Gujarat, can you please share why Gujarat and what kind of opportunities are available for investors?

Answer: Well I am born and brought-up in Gujarat and I have witnessed growth of this region. This region in my view is magical and has tremendous potential for investors. Gujarat according to me is land of entrepreneurs and so it is always loaded with many real estate opportunities.

Because of work and job opportunities, people from different states are moving to Gujarat and demand for real estate is increasing day by day. This is the right time to invest in Gujarat, don’t miss this bus of growth.

Q 3: How do you select properties or developers for your clients?

Answer: Out of our years experience we now have our own internal parameters through which we judge and evaluate different properties and developers. We have an in-house team of people who continuously study and examine different locations. We also have our own grading and ranking system that we follow.

It is not easy for a normal investor to select real estate projects and developer but we make this task easy for them.

Q 4: What is exactly real estate portfolio Management, what is the process you follow to help your clients?

Answer: It is a service that basically helps investors in managing their real estate investment. A normal investor after making real estate investment gets busy in some or the other activities in life and they stop managing their real estate investments.

Real estate is a money making asset class but it calls for lot of attention and active management. As I said earlier also, it is simple to make money in real estate but not easy. So, actively managing real estate investments is what real estate portfolio is all about.

Q 5: What are some of the marketing gimmicks investors should be aware about?

Answer: It is said, “All marketers are liars and to a great extend I also believe the same”.  Marketing gimmicks are there in all kinds of businesses and it also prevails in real estate business. Artificial scarcity is one gimmick which creates sense of urgency inside an investor’s world. Investors should not rush in buying real estate because they may end-up making mistakes.

Q 6: What kinds of risks are involved in real estate investment?

Answer: Be clear risk and return will always go hand in hand. Real estate investment is high on return and also it is high on risk. You have to buy right, sit tight and also maintain your property from time to time. A lot of people do not maintain their real estate investments properly and so they pay a very high price for their negligence.

Also, like stock market real estate market also has its own cycle, it is a game of demand and supply and government policies also plays a very important role. If you buy right property it fetches you good returns on long run.

Q 7: Can you help our readers to invest in real estate or can be their real estate guru?

Answer: Yes why not, I and my team are passionate about helping people in the realm of real estate. Your readers can send me questions; if they want I can also get on call with him to help them further. I am also ready to share some material and projects which you can share with your readers by email or you can share about them in your one day workshop.

Q 8: Don’t you think high EMI’s are putting a lot of pressure on young investors?

Answer: Yes, I agree EMI are putting lot of pressure on investors. This happens due to lack of planning, many people jump in real estate without doing homework, and they choose to invest where their friends or relatives are investing and so they end up in a tricky position. Some people are not ready for real estate and still they enter the game, it’s like jumping from a 10 storey building without packing their parachute.

Q 9: When it comes to ROI, how do you compare real estate with other investments?

Answer: Real estate according to me is strong growth asset. It has the power to beat inflation and it has its own dynamics attached to it. It would be unfair to compare real estate with gold or other investment tools.  One real estate investment can be a game changer for an entire family and so I love to help people in making real estate investments.

A normal person is able to make 2-3 real estate investments in his entire life time and so it is extremely important with what kind of property he is investing in.

Q 10: Our readers are based in different cities, in fact different parts of world; can you still help them in making real estate investment in Gujarat?

Answer: Yes, if your readers want to invest in Gujarat I am ready to assist them. We already have clients in different parts of India and abroad. Also, I am ready to share different kind of real estate opportunities that we have short listed.

Thanks Mr. Purav Goswami for your valuable insights and for sharing your knowledge and real estate expertise with us. We will forward questions from our readers. There are many things to learn from you and from time to time we will continue to touch base with you.  Thank you so much once again.

If you have any real estate related questions you can either fill up the form below or you can leave your questions in comments section.

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

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. Detailed description of these tricks can be seen after this table.

[su_table responsive=”yes” alternate=”no”]

Trick #1

They create artificial scarcity and try to rush you

Trick #2

Don’t show the eagerness to buy

Trick #3

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

Trick #4

Ask for the legal documents and regarding the basic amenities

Trick #5

Say that you are seeing other nearby projects as well

Trick #6

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

Trick #7

Ask which all banks have approved the project

Trick #8

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


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 at least 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 visualize 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 mesmerizing 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 inquire 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, inquire about the other projects near by. At least, go to the websites of those projects and memorize the names, location etc. If possible inquire 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 that’s the reason you are inquiring. 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 up to 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. Don’t 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.