Planning to Buy an Apartment? Don’t Believe These 10 Myths!

RERA's Impact on the Real Estate Market

The new Real Estate Regulation and Development Act (RERA) has revived the dormant property sales market. Some of you might be considering buying a home now.

Beware of Aggressive Marketing

This is a time when sellers and agents are aggressively promoting with free schemes and discounts. Analyze their sales peaks and make decisions based on facts.

Property Prices Never Fall - Myth

The first thing a builder or property seller might tell you is that property prices never fall. In other words, they will urge you to not worry about the price and just go ahead and buy. Get real insights from friends, relatives, or parents who have purchased property before. What was true in the past may not be the case now.

Real Estate is Like the Stock Market

Real estate, like other asset classes, goes through ups and downs. Unlike the stock market or gold, real estate investments don’t evaporate quickly. However, in some markets, property prices have stagnated for the past 1-2 years, with some areas even seeing price drops.

Buying a House Far Away for Lower Prices

Buying a house in distant areas may seem cheaper, but it brings additional expenses like long commutes to the office, children's schools, weekend shopping, and social outings. Don't rely on assumptions about high rental returns if you don't plan to move in immediately. Future rental income cannot be predicted accurately.

Market Correction Doesn't Always Lower Prices

In case of a market correction, builders don't always lower prices. If you consider inflation, even if prices increased last year or the year before, they are corrected in real terms. Similarly, higher discounts on the same property compared to last year reflect real value adjustments.

Is it a Scam if a Property Costs Rs 50 Lakh?

If a new project offers a 2BHK apartment for Rs 42 lakh, but the market price is Rs 50 lakh, is it a scam? Not necessarily. Full-page advertisements in newspapers often highlight the amenities and features of the project but may omit important details like the actual size of the apartment.

Don't Agree to the Builder's Price

According to a report by property consultant Jones Lang LaSalle, the average size of apartments in major cities is decreasing. Never agree to the builder's price without considering additional costs like maintenance charges, parking fees, club membership, and preferred location charges.

Common Sales Tactic

A common tactic used by builders is to say that most units are sold and prices will rise soon if you ask for time to think. Builders are often more eager to sell than buyers are to purchase.

Delays in Construction

Construction projects often get delayed, with very few completed on time. Some builders offer compensation for delays, but you cannot rely on that.

Compensation is Insufficient

The compensation provided for delays may not cover your monthly payments. This is because you pay the EMI on the total property price, but compensation is based on the base price, excluding additional charges like parking and club membership.

Builders Escape Legal Liability

Some builders include clauses in the contract that protect them from legal action for delays beyond their control. Some cap the compensation they pay. Always read the sale agreement carefully before signing.

Model Apartments are Deceptive

The sample apartment shown by the builder at the construction site is often not realistic. It may look like your dream home but is usually very different in reality.

Deceptive Interior Designs

Interior designers hired by builders create optical illusions to make the space look bigger. Pay attention to the actual floor plan and layout for accurate information.

Don't Rely Solely on Builder's Words

Retrieving money from builders facing financial difficulties is not easy. Sales representatives are keen to secure your advance payment because once paid, it’s hard to get a refund.

Challenges with Canceling Bookings

There are no strict rules for canceling a booking. Some builders deduct 10% of the advance, some on the total property price, while others might deduct 20%. Smaller builders might even forfeit the entire amount.

Free Schemes and Discounts

Free schemes are often offered during certain seasons, ranging from registration fees to kitchen setup, even cars. Don't be swayed by these offers as they are already factored into the property's price.

Banks and Builder Collaboration

Builders’ ties with banks do not necessarily mean project approval. This collaboration also doesn't guarantee the best home loan interest rates.

Plan According to Current Interest Rates

Plan your home purchase based on current interest rates, not on expectations of lower rates in the future.