5 guidelines to avoid wrong decision when buying property online
Even though the search for property is widely done online, for property transactions buyers still prefer the offline medium.
By Ganesh Vasudevan
Technology has transformed the way people search and buy a piece of property. A big chunk of property seekers today search for properties online. Property buying today has been converted into an experience with easy access to unbiased information, virtual and augmented reality tools, price trends, discussion forums etc. With the help of such advanced tools, many developers and online property portals are using unconventional approach to give buyers an experience of real home even before the house is built. Above all it is possible to experience it sitting at the comfort of your home.
Even though the search for property is widely done online, for property transactions buyers still prefer the offline medium. Some of the prime reasons for it being lack of transparency in the realty sector, the concept being new in the market and involvement of a high transaction amount.
But slowly the market is also moving towards property purchases online. In the past 2-3 years many prominent developers have successfully booked homes online. In the coming years the realty market is expected to become more favourable for end users with the implementation of RERA and expected reduction in cash component involved in property transactions post demonetization. One can expect a more regulated, transparent, less cash dominated and stable realty market in India.
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Buying a property online is convenient, but it also has higher risks associated with it. Here are 5 major guidelines to avoid a wrong decision when buying property online:
1. Calculate the Total Cost and Size of the Property: Most of the times builders will only list the per square feet rate of the property online and buyers might pay the booking amount based on that price. But any property purchase involves many additional charges which might increase the total cost of the property by 20 – 30%. Some of these charges include parking cost, club house membership, internal or external development fees, statutory charges, service fees, registration cost, preferential location charges etc. Each of these costs individually may seem small, but collectively they do add up to increase the property price considerably.
Builders sell properties based on the super built-up area. A buyer should check the exact plan of the property and see how much carpet area he is getting for the price he is paying.
2. Check the exact location of the property: A buyer should not solely go by the representational map on the builder site as they are never as per scale. If it is not possible to physically go and check the project, then do find the exact location on Google maps and also see street pictures in it to get familiar with the area, check for last mile videos of the project if available, and the approach road shouldn’t be narrow.
3. Getting a legal check done for the property and the builder: It is very important to get a legal check done for the property as well as the builder. Involving a competent third party to do legal and other mandatory checks doesn’t cost a bomb and makes your investment safe. This professional should be independent and not the one suggested by your builder or selling agent. This check is critical as the land or property might be under litigation or the builder might not have right to build on that land or the builder might not have necessary government approvals which might delay the project or if it’s a resale property then it might have some loans on it.
This professional will also check for all the approvals and necessary licences which a layman normally won’t understand like the commencement certificate for work, approved building plans, delay clauses, environmental clearance and documents like the Title Deed, Release Certificate, Encumbrance Certificate, Property Tax receipts, approved Land Use for land in question etc.
Hence a detailed verification of the project by a trained professional is a must for a stress-free and safe investment.
4. Go for projects which involve low risk: Buying a property online is a new concept in our country. There are a few ways to invest in a safe project online. Firstly, check if the project is pre-approved by some banks for financing. The bank would have done all the mandatory checks before agreeing to finance buyers for that project. Secondly, it is not recommended to buy a pre-launch project online as it involves high risk as the builder is yet to receive government approvals for the project. For such projects a physical booking is better. Thirdly, when booking a property online, buyers must check the cancellation clause just in case they don’t want to go ahead with the booking at a later stage or find some faults in the project.
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5. Contact the builder to own the property legally: Make sure that post booking the property online, the builder has contacted you within the first week and made you sign all the necessary documents confirming the purchase.
(The author is CEO, Indiaproperty.com)
I agree on T&C