Top 7 Reasons Why Investing in a Brand Name Matters in Real Estate

Top 7 Reasons Why Investing in a Brand Name Matters in Real Estate

your-aug2012-masthead2You have decided to buy your own home. The moment you speak your mind, there is a whole world of real estate agents, builders, brokers, and your own friends and family giving you their opinions. Finally, you have zeroed in on the locality and the type of home you want – the most demanded villa or the illustrious apartment. But, this is only the first step. You are still confused whether you should go for a branded builder or to go with any player in the housing sector.

If you’re wondering why you should invest your savings in a brand that is going to cost a fortune, here are top 7 reasons why you should:

1. The Invincible Trust

While you were busy doing your bit of research on the real estate sector, a few brand names popped up again and again on your computer screen. Moreover, you can see these names on billboards, in newspaper and television ads or even during discussions at social gatherings. It may occur to you that these brands have a lot of money to spend on advertising, but it is also true that they have been doing good business by selling well constructed projects that have left their customers satisfied. They are known to consistently deliver quality projects that are highly valuable. In another words, they are trustworthy and hence safer bets.

2. No Foul Play

Your investment is secure as there is less chance of foul play in case you buy property from a renowned property house as they are always transparent in their dealings. A branded developer will always sell you at the prevailing rate in the market while a lesser-known builder may charge extra than the current rate. A reputed builder will always give you the promised carpet area and total built-up area.

When you go with a brand name, chances are bleak that you will get a property which is built on disputed land. With an unknown party, there will always be a nagging thought in your mind that what if the land is not clear and you are not aware of this information.

To keep your worries at bay, you can ask the builder for the sanctioned plan and the

The IOD is a set of instructions that a developer needs to comply with so that he can legally construct the project. An unknown builder may violate the sanctioned plan.

You can ask the builder for title papers and the Commencement Certificate (CC). The CC is required during the process of registration and the stamp duty process and also during the time of resale.

A good builder will have these papers ready for you. Moreover, a good builder will provide you the ‘A’ Khata A and the Occupancy Certificate (OC) on time. The Khata is one of most important document for a property owner as it records all details about the property. The Khata comes handy when it comes to electricity and water connections, trade and building licenses and availing of bank loans also during the time of resale.

OC is another most important document required for any kind of apartment buyers. A branded builder will commit to the OC and ‘A’ Khata in writing and make it as part of Sale Agreement/Sale Deed.

An established builder will also make the payment schedule reflect the stages for actual completion of your home, which a non branded builder may fail to do.

3. Ease of Availability of Home Loan

Buying a new home, often means applying for a home loan. In most of the cases, if you decide to buy a brand property builder is known, your loan gets sanctioned easily. This is because financial institutions like banks are tied with well-known players of the real estate sector. So the chances of a potential fraud fall down drastically as the banks and housing finance companies have carried out the due diligence process by themselves.

When names such as SBI, ICICI Bank or HDFC Bank are associated with a builder, chances are very dim that any kind of malpractice will surface in the long run. There have been numerous cases where fraudulent builders have robbed people of their hard-earned money.

Banks trust the reputed brand names in the housing sector and know that these builders will complete the construction on time. This simply means that you are buying the right property. That’s more peace of mind for you!

4. An Edge over Others

When you go for a brand name, it certainly has an edge over others as far as amenities, material used and finishing are concerned. For the price you pay, a well-known builder will always provide you the best of amenities for your property and you will not have to worry about the quality or finish of doors, cabinets or windows.

When you go hunting for a new home, not all layouts or constructions may be to your liking. Reputed builders can realize this and try to satisfy the varied interests of their customers. That’s why when you walk into a construction and find your preferred bath fittings, a window fitted into that pretty little kitchen or a South-facing balcony, its not mere coincidence.

5. No Hidden Costs

With a renowned builder you can be sure that additional charges such as legal fees or parking charges etc. will be revealed to you in the beginning. You can be sure that they will not surprise you at the time of possession  with some additional costs.

6. Delivery on Time

A name becomes a brand when it can live up to to customer’s satisfaction. A branded builder can always tell you the tentative date of acquisition of your property and will always deliver on time no matter what. Hence, you do not have to grey your hair with your pre-EMI rates. However, a non established builder may not be able to stick to timeliness.

7. High ROI Guaranteed

Everyone waits for the day when their new home will finally be ready and resemble the pictures in the builder’s brochure. Receiving the keys and moving into your new home is indeed a joyous occasion. But what really makes it an investment for life is how valuable your new property is. Over the years as the city expands and you realize your home is in an enviable location, so will the real estate pundits who will add this when they price your home at double or triple (or even more) the amount you bought it for! Hence a guaranteed high return on investment.

Moreover, the real estate pundits also add your builder’ brand value to the property appreciation trends, making your dream house a priced possession. This is an added benefit when you buy invest in real estate from a compared to a branded builder.

Perspectives on Bangalore’s Real Estate

Perspectives on Bangalore’s Real Estate

Suresh Hari

Suresh Hari – Secretary, CREDAI – Bengaluru

For the large influx of people coming into the city, understanding the pulse of the real estate market is important. After all, many choose to make Bangalore home.

Several questions plague the mind on prospects of Bangalore real estate, the infrastructure available today and in the future. Which are the upcoming areas for investment and what there may be to look forward to, are also questions that are ever-present.

We speak to S Suresh Hari, Secretary,Confederation of Real Estate Developers’ Association of India – Bengaluru (CREDAI) to understand where Bangalore stands on the real estate scenario and help give the prospective home buyer a bird’s eye view.

What is the current state of Bangalore realty – is it on a high, low, stagnant or stable?

The market is stable and constant for the past 6 months.  With expectancy of a stable Government, the buoyancy is expected by June. The year started with a bang for Bangalore, with the city attracting private equity investments in the real estate sector.

Several deals for over Rs 60 crore have been signed or are in the final stages of closure. One of the main reasons for this is the great level of absorption of residential homes that the city is witnessing thanks to the creation of jobs at a regular pace.

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Finding the Right Tenant for an NRI Property

Finding the Right Tenant for an NRI Property

provisions-for-NRIM. A Muthanna is a General Manager by designation and is based in Dubai – UAE. As with many NRIs, he invested in an upscale apartment in HSR Layout and wanted to give out the space on rent.

His apartment is spread over 1853 sq ft and the expected rent was around Rs 28,500 + maintenance charges. Being based in Dubai and having to rely on small time real estate agents to find a tenant turned out to be Muthanna’s worst nightmare. He was unable to verify the background of the tenant and ended up with someone who did not pay on time and for months on end.

Finally, this tenant had to be evicted with the help of the police and the building association. Based on recommendations from a good friend, he then found another real estate agency that had a professional system in place to find rentals for properties and finally found the right person for his home.

Finding the right kind of tenant for your home is definitely not an easy task, especially if you are based out of the country. You may look for a real estate agency or a property management company to help you with the task. These are the features to look for in such an agency:

  • An agency that is well recommended by someone you know and who has used its services in the same way you plan to.
  • A property manager with a good standing in the real estate field and a good network of contacts as well. Being local will help in understanding the market better.
  • A proactive agency that has protocol in place on how they go about finding tenants and ensuring the rental contract is seen through to the end.
  • A real estate company that has good experience on their side and at least three references from clientele who have used their services not more than a year earlier.
  • An agency that has an effective communication system in place so that they are always accessible when you need them.“When NRIs look for tenants for their home, importance is given to the kind of tenant more than the monetary transaction,”says Geetha Naresh, Partner and Real Estate Consultant, Bhoomika Consultants.

How do Agencies Find a Tenant for an NRI?

Muthanna says that it is always advisable to retain a professional real estate agency that will ensure all background checks are conducted and the necessary formalities completed with regard to the tenancy contract. This is recommended so that the agent may also assist with other issues like payment of house taxes, etc.
Geetha Naresh explains how interiors are done keeping in mind international exposure and NRIs prefer to have tenants who are able to appreciate that. That is why agencies like hers interact with expats who are looking to rent.

Finding the right tenant: “We approach relocation agents for tenants that are MNC employees or those that require company leases. Advertisements are also placed on real estate portals online and through paper advertisements. The possible tenants are screened by us and we then let the NRI owner make a choice,” explains Geetha

Accurate paperwork: Once a tenant is settled on, paperwork regarding the rental agreement is the next step. Having a professional draft the agreement is a must. This must happen from the tenant’s side as well.

Securing rent on time: For an NRI, a real estate consultant is the right choice to ensure collection of timely rent. Geetha says, “To ensure that the NRIs are comfortable with their tenants, we have them talk over phone, communicate via emails, etc. and familiarize themselves with each other, with actually meeting. We also facilitate a system of bank transfers. We encourage tenants to ensure that there is no default and to provide standing instructions to their bank for the transfer. We also request them to include us on bank notifications through sms/email.

For an NRI looking to rent out his space in Bangalore, there are several options to ensure the process goes smoothly. Finding the right real estate consultancy is a great first step. Some of the popular property management services in the city you may contact are:

  1. Realty Kart – http://www.realtykart.com/aboutus.php
  2. Sangau – http://www.sangau.com/
  3. PMS Bangalore – http://pmsbangalore.com/
Home Loan Rejection- 6 Reasons and Remedies

Home Loan Rejection- 6 Reasons and Remedies

rejected-home-loanIt has been a long month and your feet still ache from pounding the pavements that lead to your bank’s door.

You have seen more of the bank, its personnel and your bank manager than you have seen your house, your wife and your neighbours. But in the end, you face dejection when your home loan gets rejected.

Rings an ominous bell?

I have met several people who voice the same concerns and thought it best to spread the word on this topic so fewer people face such dejection.

Keep the following things in mind and you should be quite well-prepared to meet their daunting requirements:

1.Be stable

Not only with your spouse but also with your employer! Too many jobs indicate a flightiness that bankers frown upon. When you cannot remain rooted to a place for long enough to EARN the moolah, how can they expect you to RETURN it to them!

We switch employers for various reasons – higher pay, better positions, improved work hours, desirable location, brand value, etc.

While it may seem usual to us, bankers must be convinced about your dedication to your employer; a good tenure indicates commitment and integrity – most important in terms of repayment!

Tip: Stay in your organization for at least one year before you apply for a loan. And put those skipping shoes away for a while, at least until your loan is sanctioned.

2. Cut those plastics and improve your credit score

Too many credit cards may earn you a kiss from your wife but not one from your banker! The greater your tendency to spend more than your income, the more a banker imagines his money flowing through your fingers like desert sand.

If you thought your days of keeping score got over when you graduated, think again! Indian lenders have become wiser and consult with companies such as Experian to obtain your credit history. Having a minimum score of 700 is advisable.

Tip:Having said this, do have one or two credit cards. You never know when you may forget to carry your wallet in your hurry to catch the latest IPL game atyour local cafe!

A rightly used credit instrument does substantially help you get a credit score.

Make all payments on time, do not apply for too many credit cards and home loans, maintain a reasonable debt-to-income ratio and keep a track of your score by obtaining your credit report from CIBIL.

That way, you can spot any unauthorized debts too, which may have been set up fraudulently without your knowledge.

3.CIBIL-beware of the ghosts from the past

That’s right! You did not read this wrong.

CIBIL, that ominous, national watchdog that keeps a track of your credit history, gives you a little pat on your back when you show timely payments to your creditors such as your post-paid mobile service provider, your credit card company and your two-wheeler finance provider. Make sure you’re prompt to bump up that score.

Tip: Do not go overboard with loans and post-paid services. Have an optimum mix of all, properly maintained.Unforeseen circumstances may cause your credit scores to dip.

But there is hope for people with average scores too. Private lenders such as Gruha Finance are willing to lend monies under these circumstances too but you should be prepared to pay a higher rate of interest as you shall be considered a bigger risk as compared to others.

4.Ask, and you shall receive. But asketh not too much!

Approaching too many lenders for a loan sends out a distress signal to your banker – does this person intend to survive on his income or his borrowings?

Why were so many doors slammed on his face before he knocked on mine?

You’re already 3 feet deep in the mud.

Tip: Take a good look around before you leap. Carefully select your prospective lender so that you know your chances of an approval are higher, thereby avoiding unnecessary adverse entries from showing up on your credit report.

And keep a careful eye on those reports, from time to time. Check the bank’s lending criteria. Keep the inflated ego aside for a while and make sure you meet most of their requirements, be it financial, social or geographical in nature, before you approach your bank.

Your best bet would be to first ask the bank in which you holdyour salary account.

5. Appreciation does matter

Houses come in all shapes and sizes. While we may prefer a variety in a buffet at a friend’s wedding to satisfy our gastronomical tastes, bankers unfortunately are more stereotypical.

Tip: Choose a house that has a good market value, is well located and easily saleable.

If the lender feels the house is undervalued, visit the local estate agents and surveyors to get the property correctly valued along with the recent sale sample in similar localities.

The brokers and agents may charge a hefty commission but get the job done when it comes to selecting the right property.

6.Keep your linen clean

There’s a saying – ‘washing dirty linen in public is obscene.’ Well, be careful not to dirty the linen in the first place! In this context, we refer to one’s past social and professional reputation.

Tip: Make your payments on time. Do not let your address be a familiar hot-spot for creditors. Take steps to reclaim your financial glory and get your address off the defaulter’s list by making all the payments and thereafter contacting CIBIL.

Even if one meets all specified guidelines, there are chances of getting a home loan rejected. Consider this unusual incident that I have come across is – an acquaintance of mine recently applied and was approved for a home loan from a leading housing finance company. Inadvertently, he used a cheque from an old, closed account to pay the lender the loan processing fee which of course was returned unpaid by the banker, and this lead to his loan application getting rejected.

Arm yourself to the teeth with the relevant knowledge and options before you embark on your hunting expedition.

Keep both your ears and that one brain on the alert mode when you do your research about home loan service providers and their schemes.

Once you make an informed decision, things are bound to fall in place. So go ahead and shop for a loan.

 

Answers to Top Legal Questions when Buying a Home

Answers to Top Legal Questions when Buying a Home

insurance for new home builders

Whether you purchase a ready-to-occupy home or one that is under construction, there are always a few legal tangles that may occur. We speak with Suparna Umashankar, who leads the real estate team at Legal Torque, a Bangalore-based law firm on the subject,and answer a few common queries that home buyers have:

What is my legal recourse if a builder has taken an advance and has not completed work on different slabs as promised? Is there are way to ensure he does or can I secure a refund?

 Suparna Umashankar (SU): suparna
The collection of advances depends on the credit worthiness of the developer or the stage of construction that the building has completed. Usually, there are slabs for payment with respect to an on-going construction. They are :

 

  • First stage or the advance payment stage.
  • The completion of slab work is another stage and may be taken as the completion of the roof of each of the floors.
  • Sale deed registration is another stage and indicates that the apartment is ready-to-occupy.
  • Completion of common areas is a stage where areas that all the occupants of an apartment have access to is done. Each of these stages is outlined in the sale deed.
  • Final payment is done at the stage of execution and registration of the sale deed.

You may approach the consumer courts or file a civil suit for damages if the builder has delayed completion and handing over of the apartment. Approaching consumer courts is proven to be a quicker process involving much lower expenses.

What can I do if a builder raises a demand note for provision of amenities but has not completed slab work yet?

SU: A demand note outlines the payment of amounts according to the construction agreement.  The demand note should always be in keeping with the terms agreed upon, each time it is raised. You may always refuse to pay if you find any contradictions to the agreed terms.

Tricky areas are bills related to electricity, amenities etc. These need to be clearly defined in the agreement itself. Developers usually keep payments for amenities apart from the payment slabs for consideration and construction. This being the case, you cannot disagree to pay for amenities as and when approached for it. Negotiations relating to the same depend on the credit worthiness of the developer.  Near completion of slabs is not completion of the building.  Even after the BBMP hands over a completion certificate, a period of one year is set aside as a defect-rectifying period if any is found.

How do I ensure payment is released only on completion as per the actual agreement?

SU:This may be done by imposing appropriate clauses in the agreement with regard to payment and its stages. An example of an important one is to state that “You are not obliged to entertain any payment demands which are contradictory to what has been agreed in the construction agreement.”

What is my legal recourse if I move into the flat and then find the quality of work below what has been promised and certain facilities and amenities completely missing?

SU:You are entitled to move the consumer forum for the purpose of seeking damages against the developer. You can also approach the City Civil Court for specific performance against the developer for a direction to rectify the defects at his costs and also for damages.

There may be several financial offers that accompany buying a home under construction. For the potential buyer who is working on a budget, these homes are a great way to invest, However, being aware of what your contract entitles you to – as a buyer releasing payments at various stages, is important. You must not be pushed into making decisions that are not essentially part of the process.