Buying a flat - do your homework on the builder

In today’s fast growing real estate market there are several small builders who have entered and are advertising for new constructions with equal zest and enthusiasm as established and large scale builders. This frenzy is fuelled by both real estate investments as well the growing trend of home buyers who end up buying their first home before they hit their 30’s.

If you are going to buy a house aside from the location and price of the building, it is also important to know who the builder is. The history of the builder, condition of his previous constructions, quality of his work, delivery schedule adherence and many other details will play a vital role in the future market capitalization of your property.

Price of a property is the biggest driving factor for most real estate investors. First time home buyers are also the most gullible lot because in their enthusiasm or desperation to get a new house they rarely do proper research on the builder. There are many cases of long delays in delivery of projects or poor quality of construction. Even big name builders have faced flak for delay in project delivery. So before you invest into a property find out the following

  • Builder history and types of projects he has undertaken
  • Visit a completed project of the builder to assess his quality
  • If possible try and speak to a previous buyer on his experience with the builder
  • Find out how he handles his financial terms and how much hidden cost you might encounter as the project progresses
  • Ensure that a bank pre-approves the project before going in for a purchase in case you need a loan. Do this before making your down-payment to block the property.
  • Check if the builder is affiliated to a consortium such as Confederation of Real Estate Developers Association of India (CREDAI) and Builder’s Association of India (BAI)
  • Documents that you should certainly check before investing in a project are Land Records, Land Usage Certificate by zonal commissioner, Clearance of Construction Site, No Objection Certificate from the authority, Approval of the Plan, and Master Plan of the area
  • Check if legal documents are proper and get your own legal opinion if you must
  • One must always check whether the builder is certified under ISO or other protocols or not.

Check if agencies like CRISIL or real estate awards have rated and awarded the builder.

You can find details regarding the financial health of a builder on the company website and assess whether the builder would be able to the project’s deadline or not.

If there is no transparency from the builder’s side then probably it is not the best idea to invest in the project. If there has been any case of funding issue, then probably the builder is not the best one to go for. In such cases you can identify the weaknesses, assess the overall credibility and make your final call.

You can also take some pointers from reviews, forum or friends who have gone through the same experience.

If you are looking to buy properties in Bangalore or Pune, reputed names like Prestige Builders, Brigade Group, Godrej properties etc tend to be safe bets. However, you should still do your homework because at the end of the day – real estate investment tends to be one of the biggest decisions of our lives.

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