You can save a couple of percentage points by buying online but it needs to be backed by a lot of legwork.
The online advantage
The internet has made the entire inventory of the market available to buyers at the click of a mouse.
On a property portal you can search for an appropriate property by location, price and size. You can scout for the best deals, compare rates of similar properties in the same location, and study price trends. Even without setting foot outside your home, you can zero down on five-seven builders and their projects in the desired location.
Next, you can visit each builder’s website, where you can find detailed information on their projects, site and flat layout, specifications, progress of construction, completion date, elevation (what the project will look like when it is finished), and so on. You will also be able to download the price list and sales agreement, and request for a booking chart (which tells you which flats are available). Says Ashwinder Raj Singh, chief executive officer (CEO) – Residential Services, JLL India: “Potential buyers can complete a significant part of the due-diligence that must accompany every property investment online.” By doing your initial research over the internet, you can avoid interacting with brokers and builders’ salespersons and protect yourself from their aggressive sales pitch.
A medium for due-diligence
Besides using the internet as a source of information, buyers can also use it to do background checks on the builder. “You can figure out from Facebook, Twitter and real estate forums the opinion that past buyers hold about the builder,” says Ankur Gupta, joint managing director, Ashiana Housing. You can glean information about the builder’s quality of construction and infrastructure in past projects, level of maintenance, and so on.
Doing the background check on the builder, however, requires some persistence. “Using search engine optimisation (SEO) techniques, developers push favourable pages up in searches. You will have to go beyond the first five or 10 searches to get a complete picture,” says Sanjay Sharma, managing director (MD), Qubrex, a Gurgaon-based real estate consultancy.
Prospective buyers can also visit the websites of courts and search for cases against a builder. “That will tell you whether there are long one or two cases against the builder or many,” says Sharma.
Disadvantages and risks
While the amount of information available online is humongous, its quality can be suspect. “Data are not completely transparent and are not available in a standardised format,” warns Gupta. To draw a parallel, if you go online and search for the price of a cell phone, you get the all-inclusive price for delivery to your doorstep. You can compare the prices offered by different online sellers and go for the best deal. In the real estate space, some developers quote only the basic price, some quote the basic price with IDC and EDC (internal and external development charges), some quote it with the service tax and others without it, and so on. So, while you could get many price quotes, you can’t be assured that more charges will not be tacked on later. “You risk becoming confused, being led astray by marketing hype, and falling prey to impulsive buying, all of which can have serious consequences,” says Singh.
When buying a big-ticket item such as real estate, you should not sign on the dotted line immediately. Since the demand-supply dynamics in the market also favour the buyer today, do thorough due-diligence before arriving at a decision.
First, visit past projects and try to gauge the level of satisfaction of past buyers. Next, try to find if the developer has a strong intent to deliver. “If a developer has 15 projects and 13 have been delivered and only two are ongoing, that tells you one story. If he has 15 projects and only two have been delivered, that tells you another story,” says Pai.
Visit the project site. “When you visit the site, the vibes you get often lead to the right decision. The chances of disappointment tend to be lower among buyers who have visited the site and then made the purchase decision,” says Sharma.
Check whether the builder has received all the approvals. Currently, this information is not available online, though it will be once the real estate regulator comes into being. “A prospective buyer must insist on seeing all the relevant documentation related to a residential property purchase, including clear land title, development permits and the commencement certificate,” says Singh. Another alternative, suggests Pai, is to go with a project that has been pre-approved by some major banks for home loans.
Finally, before writing the first cheque, have a face-to-face meeting with the developer and clarify all your doubts. “Ensure the price being quoted is the all-inclusive,” says Gupta. Get all the commitments from him in writing and only then sign on the dotted line.