Toying with the idea of investing your hard earned money into real estate is extremely stressful for many people. Today, most of our adult generation has a clear vision of their dream home and a certain lifestyle. More and more people are willing to take the necessary risks of pre-booking homes in upcoming constructions. However, we keep hearing stories and receiving news of unfinished developments, loss of money, absconding builders and interruption of development due to legal issues.
From a builder’s point of view, the entire process of acquiring space, necessary permissions to finally completing a project is a long and tedious one with innumerable block holes. This article explains a broad sense of the various stages involved in a new construction and the pros and cons of purchasing a property in these stages.
For a builder, this involves various technical and legal steps such as site analysis and acquisition, approvals and registrations, planning, concept and design and building approval stages. Many builders are open to pre-booking of flats at this stage. Pre-bookings actually reduces a builder’s project risk to a certain extent and also help them in initial finances for the construction loan repayment. For a buyer, this stage is certainly very attractive due to lower prices of flats and other offers. However, it is the riskiest of all the above procedures can be time-consuming and there may occur some legal liabilities at every stage which may delay or even stop the construction completely. Also, you may not be able to exactly visualize the final outcome of the construction. Note that many builders deviate from the original plan, however around 5% variation than the initial plan is acceptable. Usually, a small amount as the token is to be paid at this stage. It is best to carefully do your research regarding the upcoming property, builder credentials, and the area if under hidden legal battle. Buying a property at this stage is recommended for those who are willing to wait for possession.
There are a few basic stages involved in the development of a property. Although these steps are complementary to each other, each builder will overlap the steps depending on the nature and magnitude of the construction. That is why there is no fixed linear method and every developer ought to be flexible at every stage to circumvent any legal or technical obstacles. The 4 basic stages are:
a) Pre-Launch or Pre-booking stage
b) Launch or Advertising stage
c) Completion and
d) Post Completion stage
Construction or Launch stage
According to analysis, this is the best stage to purchase a flat as the construction has already begun and there are moderate to fewer risks involved. There is a lower chance on the property being stalled altogether. Many builders prefer to promote and advertise their property at this stage along with some attractive discounts and offers. We see a surge in the sales of flat at this stage. For a buyer, you can visit the construction site and also demand to know about the proceedings of the foundation, surrounding roadways, quality of fixtures, furnishing, kitchen, and bathroom.
In this stage, the building is already up and almost finished. This stage comes with least amount of risk for the buyer. However, it will definitely cost you more as the builder is ready to hand over the possession of flats and some of them may have already been sold off in previous stages. It is heavily dependent on the demand-supply aspect and market trend during that time of completion. Buying a house in this stage is generally recommended for those who are in immediate need of a home to live in or looking for current investment returns. The biggest advantage here lies in the fact that you can see the entire architect of the plot and home and incorporate your furnishings early on as well.
Post Completion and Resale Flats
This is a time period after the building has been developed and homeowners have started using the flats and facilities. Some people may opt for an already established home which is due for resale. While this has its own advantages like settling in an already “developed”, it can also come with certain wear and tear with the previous usage. It is hence advisable to check the flat thoroughly before investing. Sometimes, builders may come up with some offer schemes and discounts especially during festival seasons in India. It is best to keep a constant check on these offers to avail the best of them.