[amitsingh08]

Dear Team BHP

After enjoying the high quality of car advice, I am starting this thread hoping for insights from those who bought flats before building construction stated.

What have you learnt from your real-world experience?

This afternoon, I visited Dosti Acres in Wadala Mumbai to learn about their 2/3 bedroom offerings. While looking at the floor plan and reviewing the sample flat, I quickly realized that I really didnt know what to look for.

But here are some of my thoughts

1. I was shown both empty and furnished flat. I tried to focus on empty flat, becuause I wanted to judge the underlying product I was buying. The furniture was distracting.

2. I checked for quality of switches, taps, flooring - they were all mediocre.

Some questions in my mind.
- How do I check for view, assuming I'm buying on high floor.
- Will flat be breezy?
- Does floor plan change during construction?
- What is quality of lobby and elevators?

Flat is the most expensive thing people buy. Its strange how people pay a crore without seeing end product.

Would love if people could share their real lessons; hope enough of you bought pre-construction.

Amit

[khanak]

If your buying an under construction flat, make sure its from a reputed builder that doesnt have a history of cancelling projects, It falls a lot cheaper to buy under construction or even pre construction flats.

Builders like the Hiranandanis enjoy the fact that a lot of their flats are sold just as the project is announced,

btw are you buying this an investment or a future home?

[amitsingh08]

Originally Posted by khanak

If your buying an under construction flat, make sure its from a reputed builder that doesnt have a history of cancelling projects, It falls a lot cheaper to buy under construction or even pre construction flats.

Builders like the Hiranandanis enjoy the fact that a lot of their flats are sold just as the project is announced,

btw are you buying this an investment or a future home?

khanak: I'm buying for future home. Cheaper price attracted me to under construction flats. Planning to visit Powai to see Hiranandani buildings; heard so much about them. Have you bought from Hiranandani? Also heard that premium builders have 30% built-up markup over carpet. This will significantly increase costs.

[khanak]

Originally Posted by amitsingh08

khanak: I'm buying for future home. Cheaper price attracted me to under construction flats. Planning to visit Powai to see Hiranandani buildings; heard so much about them. Have you bought from Hiranandani? Also heard that premium builders have 30% built-up markup over carpet. This will significantly increase costs.

I live in an apartment built by Hiranandani, Hiranandani also have two properties in Thane in case you are interested,

[amitsingh08]

khanak: Do you live in the Hiranandani Powai complex? I'm planning to buy a flat there, but am concerned my work commute will be long. If lucky, I'll work in Seepz. But could end up in Vile Parle West or Dadar. How much time would it take me to drive to Andheri station, Kanjurmarg station and Dadar?

[lamborghini]

Cheaper price attracted me to under construction flats.

Very true. We bought a flat, 10 min walk away from Mahalaxmi station at6 Rs3300/sq foot.
the building is almost ready (another 1 year/2 years max) and prices have shot up quite a bit.

Builders like the Hiranandanis enjoy the fact that a lot of their flats are sold just as the project is announced,

This is quite true as well. In the building mentioned above, around 86% of the flats have already been sold even thought the flats are still under construction. The flat was built by Godrej.

A word of advise, shifting into a new flat that was just built does have some cons.
We just shifted to a new house that was just built, by a reputed builder however, there are small teething problems such as small leaks. However, this is rectified in the first year itself.

PS - if you want, i can fin out about the building in Mahalaxmi.

[pawan]

one major thing what you have to check is leaks for ex in my appt my flat has no leaks of any sort but another 3 to 4 flats have leaks which leads to black patches in their houses.
another thing is in flats yet to be finished you can never tell when its going to be finished for example my new apartment was supposed to be handed over on march but till now its not yet finished.

[lamborghini]

Originally Posted by pawan

another thing is in flats yet to be finished you can never tell when its going to be finished for example my new apartment was supposed to be handed over on march but till now its not yet finished.

This is quite true as well.
We were supposed to shift into our new place over 2 years ago but we just shifted in last year.

[khanak]

Originally Posted by amitsingh08

khanak: Do you live in the Hiranandani Powai complex? I'm planning to buy a flat there, but am concerned my work commute will be long. If lucky, I'll work in Seepz. But could end up in Vile Parle West or Dadar. How much time would it take me to drive to Andheri station, Kanjurmarg station and Dadar?

Kanjurmarg Station is hardly 10-15 minutes away from Hiranandani,
Seepz is around 20 mins away.

[Wheeliej]

Pre-construction tips :

- Buy from a reputed builder who does not have any cancellation reports.
- Get a lawyer to check up the paperwork (your banker will do that before sanctioning a loan, but the responsiblity is yours anyway)
- Expect a 1 year delay in most projects - plan accordingly. Very few builders provide on-time completion
- Measure the rooms before making the final payment - in a lot of cases the measurements are smaller than was shown in the drawings.
- Breeze - you will get breeze in higher floors; much lesser in the lower floors. Look at the plan and know your directions to expect the right breeze.
- Stand at the site and imagine which direction your flat will face and see how the afternoon sun hits it. In a lot of cases, afternoon sun saps away all the wind/energy and burns up the curtains post moving in
- On the other hand, ensure from the drawings / directions (try your best) there is sufficient light in the rooms and there are no dark corridors where there will be no light at all.
- On a financial side, try to pay up full EMI from day 1. it will be difficult to start with, but no point in paying pre-EMI on the loan amount for 2+ years while the construction is in progress. Your principal does not reduce by even 1 Re. with a pre-EMI loan.
- Do not pay FULL money to any builder (even the most reputed ones - the net is full of irritated Purvankara customers who are crying about their promised and much delayed 'dharti pe swarg' homes). Take an instalment loan from the bank and release payments as you see the floors rise. Most builders and even bankers will try to persuade you to take full loan upfront and even offer you fixed rate of interest.
- Before you take possession of the apartment, do a PDC like you would with your car and point out ALL the items that you feel need to change/modify/correct
- Most builders will offer 6 - 12 months warranty on the project and correct changes in that time, but you need to provide them with the feedback at the earliest.

Will update the list later if i can think of more items.

[amitsingh08]

Excellent list @Wheeliej, this is a superb quality post.

Originally Posted by Wheeliej

Pre-construction tips :
- Measure the rooms before making the final payment - in a lot of cases the measurements are smaller than was shown in the drawings.

Builders may change design 1-2 times during construction; because initial designs arent 100% accurate. So if rooms are smaller - could price be re-negotiated? If property prices rise, dealer may offer to buy-back flat. I guess holding part of the payment gives leverage, but not sure how much.

Originally Posted by Wheeliej

Breeze - you will get breeze in higher floors; much lesser in the lower floors. Look at the plan and know your directions to expect the right breeze.

My parents always recommend buying flat facing South or West - for breeze. Not sure about logic. I avoid East facing because sun hits you in morning and wakes you up. Dont mind skipping the supposed healthy morning rays. But how do you check for breeze? I guess checking if flat will have cross-ventilation when internal doors are open.

I have a follow-up question.

Considering buying a 80 lac pre-construction flat. How should I divide the payments? Builder is asking for 4 lac token deposit. When should next payments be; I need negotiating help.

Thanks for sharing

Amit

[Wheeliej]

Hi Amit,

Let me try to answer your questions :

Inform the builder that you will make the final payment only on receiving the full apartment - i.e., sq footage that you have paid for. Be upfront with the builder and put it in a letter and get an acknowledgement that you will do a pre-possession check for square footage before you hand over the final payment and expect a reduction in price (proportionate to price paid) if the square footage is not as per the drawing.

Re. direction of house, it really depends on the area and you have to be lucky to get breeze into your flat. My cousin once lived in a flat where the only breeze came in a small corridor in front of the bathroom door when the bathroom door was open. I personally like to have early morning sun in my room; i feel it is healthy and not as irritating as late evening sun. It also seems to bring in cool breeze in the morning, but as I said it depends on the area.

Because banks normally sanction about 85-90% of the loan, builders (and bankers) will expect you to pay 15% upfront for the property. Builders will normally also expect 5% of that before they give you any paperwork for the property (Agreement to Sell / Agreement to Build and other property documents - normally a stack of them). So 4 lacs seems reasonable for a 80 lacs property. However, ensure that the builder understands that if the property does not withstand legal scrutiny or you cannot raise a loan against it or if there are unacceptable terms in the Agreement to Sell/Build, you will expect a full refund of the advance money paid. Dont just release any cheque stand-alone. Write a covering letter detailing why this cheque is being given and the conditions and get an acknowledgement for the letter and a receipt for the cheque. Then the builder cannot say later that he did not know the intention behind issuing the cheque or that he mis-understood your conditions.

Even if your banker is going to do a legal review of the documentation, it is a good idea to get the paperwork verified by your lawyer. Will cost a bit of money, but when you are spending so much whats a few more thousands.

Payment is normally to be paid by instalments depending on when the project will be ready - evidenced by floors being raised by the builder. So if it is a 10 floor property, work backwards.

5% advance
10% on agreement to sell
final 10% on possession (subject to PDC).

Balance is 75% which should be divided by 10.

Everytime he raises 1 floor, he will send you a demand note (alongwith a picture) for 7.5% of the sale price.

Try this logical argument with him.

Also, get a clause in the agreement that the date of possession will be dd/mm/yyyy. That if the possession of the apartment is delayed beyond that date, he will pay you Rs. xy per sq ft per month as liquidated damages. Builders will normally agree to pay between Rs. 2 & 5 per sq. ft. per month in Bangalore. Since you are in Mumbai, start negotiating with him based on 25-30 Rs. per sq.ft per month. you will be paying huge amounts in interest and any extra payment due to delays should be compensated

I was reviewing an Agreement to sell this week for a colleague and came across many irregular terms inserted in the Agreement by the builder / promoter. i will list to you 3 which are clearly in the 'not acceptable' list :

1. Builder had not specified how much undivided share of land the buyer will be entitled to, because
2. The builder wants to retain the right to build another floor on top of the building at any point of time;
3. Promoter wants to retain rights to all common areas and also wants to use unsold car parking spaces and do what it wants with it (so they can open a disco and your floors and walls will reverberate all night.....).

These are terms that would worry me no end. The agreement must contain clear clauses that the builder / promoter will vacate the project once the construction is completed and warranty period elapses and hand over to the resident's association. They have no further right on common areas, terraces, basements, car parks or any other part of the building.

Watch out for these items in your agreement with the builder. All the best.

[manson]

Regarding the builtup, i was recently told that builders since a while have been charging as much as 65% super builtup on the carpet area, and even before this is was a good 51% in most of bandra-khar and south mumbai.
The rising prices are a lottery for someone with spare property, anyone looking to sell and buy is gonna have to fight with the rising price scenario.

manson.

[deepaktpatil]

Originally Posted by manson

Regarding the builtup, i was recently told that builders since a while have been charging as much as 65% super builtup on the carpet area, and even before this is was a good 51% in most of bandra-khar and south mumbai.
The rising prices are a lottery for someone with spare property, anyone looking to sell and buy is gonna have to fight with the rising price scenario.

manson.

Commenting on the topic of built up, there is additional shaving off in form of measurements. Inside measurements are considered from the center of one wall to center of other side of wall. Generally we book by looking at the size of a room but what happens is we get the dimensions minus approx 6 inches. So a 12' X 12' room is actually 11.5' X 11.5'. This could be more if builder has thicker walls. So an additional heartburn if somebody is not aware of this.

[danlalan]

Originally Posted by amitsingh08

Flat is the most expensive thing people buy. Its strange how people pay a crore without seeing end product.

Amit

Well there are people who pay crores to buy the flat and pay even more crores to do up the place.