[shyampsunder]

I don't think there is any country in the world that beats India when you compare and contrast how well the financial world runs vs real estate. It literally feels like the two asset classes are operating with a gap of 100+ years.

While we often focus on returns, we forget to understand non-return related risks.

Just couple personal experiences that I would like to share:

Recently we tried selling a piece of land purchased a decade ago in TN, wanted to be completely clean and wanted to register it as 100% white. As most of us know, it's tough to find buyers who are amenable to that. With great difficulty found a buyer who was willing to purchase it. The real shocker was when the registrar refused to register the transaction because it would cause a spike in the guideline value of that area. We were even threatened that a case of money laundering maybe registered because our transaction would be much higher than the prevailing price in the area.

Forget about being rewarded for honesty, here we were being threatened for being honest.

A few months ago, I sold some US RSUs granted by my employer but I was surprised to see that after couple of days the money was not credited to the broker account unlike Indian broker accounts. Only after I searched online, did I realize that USA was following T+2 settlement whereas India was at T+1 and hence the delay.

The two experiences made me realize how much of a difference there is in the two asset classes. I feel lucky that my parents much to the chagrin of my relatives refused to park significant assets in real estate.

For close to 30 years, I have been living in rented houses because of frequent job changes by my dad. In the most recent house that we lived in, we were paying a rent of 1L per month without a single rent increase over 5 years at a home where the owner was receiving a rental yield of 1.5%.

The one observation that I have over these 3 decades of renting is that there is an enormous difference between renting a middle class home versus a high end / luxury home (1L+ per month rent outside Mumbai).

Right from the owners behavior to rent increases to arbitrary rules/diktats. The conclusion that I have come to is that high end homes outside of certain super core areas receive much lower demand and it is a lot harder to find new tenants which shifts the balance of power towards the tenants.

Thankfully my parents have accumulated a large enough financial assets corpus and I hope to not buy an house for the next decade or so till I have done the same.

Whatever money I invest in an house I would like to write it off just like buying a car. That's the only way to maintain peace of mind in my opinion.

[darkchild82]

Originally Posted by swiftnfurious

I know Lokayukta was very very strong in Bangalore - no way to get this to their attention? Only once a few top shots are sent to jail, there'll be some fear I guess.

I keep thinking about investing in a property in Bengaluru, but time & time again, where I hear about the horrors buyers are going through... that too after taking 1 crore loans... I tell myself, it's just not worth it!

[GeeTee TSI]

I happened to complete a transaction including registration of a resale apartment (not a tier one brand of builder here) in the same complex where I was staying on rent (but another unit). Some of my reflections with the power of hindsight
What went well-

• Full visibility on the apartment in terms of physical condition and ownership
• Direct interaction with the sellers who in turn, felt more comfortable with a 'fellow resident' as opposed to prospective buyers through brokers. Perhaps it made me a preferred buyer (or maybe I'm imagining it)
• Reasonable expectations on pricing
• Seller's emphasis on completing the end to end transaction at the shortest possible time (initially it felt daunting for me)
• Full set of original documentation with no outstanding loan from the seller
• Direct interaction with a known bank/branch/manager where I had closed a loan earlier, lower loan amount than the maximum eligibility.
• Faceless interactions and information sharing with all stakeholders which had minimal disruption to work

What did not-

• Just 24 hours to make up my mind and confirm on a final offer (of 8 figures!)
• Non refundable token deposit (an amount of 2L) in case buyer backs out or does not fulfill the timelines of registration
• Rather unrealistic expectations on date of registration notwithstanding my stand on bank loan and their (standard) formalities. I had to push back really hard to agree on a 30 day window (with a 15 day grace period) from the date of sale agreement
• Chicken and egg situation of advance payment vs legal due diligence outcome. I had to have an exhausting conversation of inserting a null and void condition in case of red flags. I could digest this risk only since I live in the same complex
• Extremely wary of contractual clauses even on pretty standard and fair terms and conditions
• Insistence on RTGS payment of the loan amount from the bank (was at my wit's end on this!) again leading to exhausting negotiations on the mode of payment (DD)

It felt like a relief when things went as planned but it does not remove anything from the fact that an undue level of risk and anxiety impact the buyer.

[RGK]

Sorry to hear about what you've been through.

Does KA have an organization similar to the Tamil Nadu Real Estate Regulatory Authority (TNRERA) to address such irregularities? RERA has established valuable guidelines to guarantee the timely and proper completion of residential projects.

OT here:

Three key points to note are that builders are allotted 42 months to finish a project, meaning buyers cannot interfere with the builder during this time.

Additionally, builders are strictly prohibited from using the funds provided by a buyer for other projects.

The flat's registration occurs solely upon the project's completion, which means only after all payments have been made to the builder. Home loans are issued based exclusively on the construction agreement.

Originally Posted by Xaos636

Genuine question. Is there a builder we can trust in Bangalore as of now? I hear horror stories for Mantri, Brigade, Puravankara, Sobha etc. I am concerned now.

This issue isn't limited to BLR, Unsettling tales in real estate projects are becoming quite common these days. Personally, I think purchasing a second-hand apartment is somewhat safer.

[ashkamath]

I hear these builders horror story regularly and repeatedly. I understand that many of us would opt to buy an apartment where the project is yet to commence or has just commenced to benefit from the early bird offer or the stage wise construction payment benefit or to benefit from the lesser price of the apartment. Ofcourse the builder will paint a rosy picture saying that the apartment will appreciate 2X or 3X in a matter of few years and so on and that will lure the buyers to get in due to the FOMO.

I have a college classmate who is into building apartments in Bangalore and his method of construction is way different from other builders. He would procure the land, invest in the construction, build the apartments, get all things done including the lighting, plumbing, GAIL gas, water connection etc and then put the apartments for sale. I know it is a strain on his finances as crores of rupees get blocked in one project, but again he has a loyal clientale (earlier customers who purchased apartments from him and the word of mouth about the quality of his construction) that he is able to sell his project after completion quite successfully. The only drawback being, the home buyer would not be able to customize the house as everything is done and the key is handed over to the buyer. If the customer is happy with the apartment, the location & the price, they buy otherwise no. Ofcourse his prices are higher than the other builders for similar sized apartments in his locality. Surprisingly, he doesn't even take bookings or advance prior to completion of the project and only after the project is complete, he starts the selling process. He has the financial muscle to pull it off and does it with quite elan.

I learnt from him, that it is better to buy a completed and ready to occupy apartment rather than buy a project about to start or under construction as there could be a lot of slip between the cup and the lips, as they say. A completed and ready to occupy apartment with all amenities done will relieve lot of stress at the price of a higher cost, which is still justifiable looking at all the horror stories of incomplete projects in the city.

[swarnava.ch]

Originally Posted by areddy

🚨 FRAUD ALERT: Bhartiya City’s Nikoo Homes & Leela Residences - Harassment & Nightmare! 🚨

Its good that you have posted the real feedback and issues you are facing. I have seen these adds popping up for the last few days on my facebook feed.
https://www.facebook.com/share/v/gj6...ibextid=WC7FNe

It seems Nikoo homes are openly advertising there phase 5 projects at par with current premium rates.
I remember a few office colleagues also who had purchased very early in this project, but have lost touch with them now.

Best would be to add the link to this post to various Google reviews and other online forums so that un suspecting new people don't get into this trap of the brand name.

[Sebring]

This is the most important point. Also, you get to see an actual view outside the windows, not some fairy fantasy

Originally Posted by GeeTee TSI

Full visibility on the apartment in terms of physical condition and ownership

[ninjatalli]

Originally Posted by GeeTee TSI

I happened to complete a transaction including registration of a resale apartment in the same complex where I was staying on rent (but another unit).

This is an extremely tried and tested successful strategy being seen across the city. One of my colleagues did it last year; after staying a few years at one of the gated complex for a year or two; they went ahead and purchased a flat for themselves. As per her (and other friends who lived in that complex of 900+ flats), most resale flats got lapped up by existing tenants immediately.

I also see it happening a lot in the gated complex I live in. Every other day, I see a post from an existing tenant/renter asking if any flats are available for sale. It's no wonder that hardly a few reach the Nobroker / 99acres / etc portals; only those that are obscenely priced land up there and stay there for months.

[.HEM]

Originally Posted by ashkamath

I learnt from him, that it is better to buy a completed and ready to occupy apartment rather than buy a project about to start or under construction as there could be a lot of slip between the cup and the lips, as they say.

This is the best way to do and I think in Chennai most of the builders do the same. If you buy or go into agreement for an under construction apartment will attract GST for the entire cost of the flat.

The ordeal for most flat owners do not end when they get the keys. It starts with a mafia like gang taking over the Owners association and try to eat the monthly maintenance.

[handsofsteel]

I've been on the fence regarding investing in RE in Bangalore. I completed my schooling there and parents live there in an independent house for over 35 years in a great locality. However, after a lifetime of travelling / staying in metros/ abroad, we would prefer a gated community for our golden years.

However, reading this thread makes me extremely wary. Time to invest more time in nurturing my Plan B -
1. Identify 5 places in all corners of the country. (Tier 3/4 places)
2. Buy a great car (for 2) preferably 4x4.
3. After retirement, (60-70 years of age), stay in each of these places for a good two years.
4. Indulge in all your fantasies to see what rocks your boat - sleepy hillview abode or a house by the beachside or a farm in a rural area. Explore all these places to your heart's content for the two years - cuisine, culture etc.
5. End of these 10 years, come back to Bangalore to settle down on rent for the final years (or in the independent house)- having satiated all desires.

[Theyota]

Originally Posted by shyampsunder

Recently we tried selling a piece of land purchased a decade ago in TN, wanted to be completely clean and wanted to register it as 100% white. As most of us know, it's tough to find buyers who are amenable to that. With great difficulty found a buyer who was willing to purchase it. The real shocker was when the registrar refused to register the transaction because it would cause a spike in the guideline value of that area. We were even threatened that a case of money laundering maybe registered because our transaction would be much higher than the prevailing price in the area.

Increase of guidance value increases revenue to government. Real estate transaction taxes are a big source of revenue to state governments. So the registrar clearly gave you a bunch of baloney. Nobody could have done anything to you as long as the source and destination of funds involved in purchase are clean. The registrar would like you to show a lower selling value so that buyer could save on the registration taxes and share a part of that savings with him. One of the primary tasks of a registrar is to increase government revenue by registering properties at the correct transaction value, but most of the times they are doing exactly the opposite.

Sub registrar offices, along with Police, Public Works Department, Irrigation Department, etc are among the most corrupt offices in State Governments. The hearty folks working in these offices have targets to collect and distribute their ill-gotten mollah all the way to the top. There are unwritten rules of who gets how much per month. If they don’t reach their target, they will be transferred to a less attractive office.

[shyampsunder]

Originally Posted by Theyota

Increase of guidance value increases revenue to government. Real estate transaction taxes are a big source of revenue to state governments. So the registrar clearly gave you a bunch of baloney. Nobody could have done anything to you as long as the source and destination of funds involved in purchase are clean. The registrar would like you to show a lower selling value so that buyer could save on the registration taxes and share a part of that savings with him. One of the primary tasks of a registrar is to increase government revenue by registering properties at the correct transaction value, but most of the times they are doing exactly the opposite.

Sub registrar offices, along with Police, Public Works Department, Irrigation Department, etc are among the most corrupt offices in State Governments. The hearty folks working in these offices have targets to collect and distribute their ill-gotten mollah all the way to the top. There are unwritten rules of who gets how much per month. If they don’t reach their target, they will be transferred to a less attractive office.

Legally I know nothing can be done to us as long as we are playing it by the book but it's an example of the unexpected hurdles one faces with real estate transactions and how easy it is to manage your wealth in financial assets like equity, bonds, MFs etc. In this case, unfortunately the deal fell apart because the buyer got cold feet because of such statements by the registrar.

Thankfully we have managed to sell off most of our real estate assets apart from the house that my parents want to live in and this piece of land. Waiting to sell of the land to get absolute peace of mind.

[akhil_007]

Originally Posted by areddy

🚨 FRAUD ALERT: Bhartiya City’s Nikoo Homes & Leela Residences - Harassment & Nightmare! 🚨

Sorry to hear about the ordeal you are going through.All I can say is stay strong and wish you get justice.

At the same time, heartfelt thank you for sharing this. I was about to make a booking in Nikoo 6 near International Airport Road. I have now backed off and will err on the side of caution.

Originally Posted by ashkamath

I learnt from him, that it is better to buy a completed and ready to occupy apartment rather than buy a project about to start or under construction as there could be a lot of slip between the cup and the lips, as they say.

If it's ok with you and your friend, can you DM me his contact? I would like explore this option and see how it goes.This is a slightly better option (nothwithstanding quality of materials and workmanship issues- not aimed at your friend but speaking generally)


On an unrelated note, I strongly prefer builders who transfer the land,common areas and flats and everything in owners/association name during handover. 99.99% don't do this and this makes the concept of UDS null and void. I have seen only apartments built in 90's/2000's doing this. Sigh[/end of rant]

[ashkamath]

Originally Posted by akhil_007

If it's ok with you and your friend, can you DM me his contact? I would like explore this option and see how it goes.This is a slightly better option (nothwithstanding quality of materials and workmanship issues- not aimed at your friend but speaking generally)

I have received multiple private messages with regard to my post about my builder friend.

I called him up today morning to ask if he is still in construction business. He replied that he has retired from construction since last 2 years and wants to enjoy the remaining life with the fruits of his labour.

He is a college classmate, a neighbour and a family friend of over 43 years. I asked him a variety of questions with regard to the apartments. He said that he took care of everything such as Khata and even the first year property tax for his apartment buyers is paid by him. And with that sort of customer delight, he said his apartments are sold within a fortnight of putting them on sale. His appartments are priced higher than his competitors, but sold quicker than others as he just had to handover the keys to the apartment with the interiors and kitchen and bedrooms all done and ready for occupation..

But then we all age and we both are senior citizens now. I am retired from my profession as a Marine Hull Surveyor in Goa and he has retired from his construction business and wants to enjoy his remaining life in peace and joy with his family.

However, I shall send you his mobile number through a private message and you can have a chat with him and learn from his experience and advice.

[balenoed_]

Today happened to see one sad sight and I knew it was coming but was hoping it doesn’t.

This acres of land had a green cover of trees for years. Assetz group is developing and started cutting these trees from one side and is about to finish of all those remaining ones too soon. The question I always have is, there are already so many layouts around, unsold, a lot of inventory and why one more. Not sure if this deforestation will have an impact of cool weather that always was around. Other issues like rain water flow, multiple borewell that is going to come are inevitable.