Today catchy tag lines & celebrity branding has become a regular way of attracting people by developers. Attractive prices & lucrative payment plans with the availability of home loans have made buying a house easier. But builders need to understand, it is not just about starting or completing a project with building material, bricks & wood, it’s about creating homes for those who believe in you.
It’s a mismanagement of a builder only, when projects are left incomplete or inaccuracy in things promised or construction quality is not even close to average. Agent/ Brokers working with builders as channel partners play an important role for buyers to investigate about builder. But today, what interests an agent the most is only the payout which they get from builder for selling their project. It’s a responsibility of an agent to guide a buyer with correct and unbiased information about builders and let buyer choose a project according to their requirements.
Some points that an agent should check before promoting/ suggesting a project are:
1. Builder’s Profile: Getting the details of builder’s qualification & experience in the industry is the first thing to enquire about. As an inexperienced & unqualified person is more likely to do mistakes or leave a job undone.
2. Past work done: Taking a tour of completed & ongoing projects gives a fare idea about honesty and promises made by a builder. Also check if projects are handed over after “Completion certificate”, as it makes sure that project is fully complied with government norms.
3. Approvals: The project being promoted should be checked in terms of legal approvals & NOC’s from related regulatory authority. The land should be registered with builder, all necessary sanction plans should be generated, clear information of FAR being approved & sanction for sewage, water connection and electricity are some key points to check upon.
4. Financial Stability: Builder has to be financially sound to complete a project successfully. Agents should search for financial status & liquidity of builder.
5. Does builder uses sub contractors: Builder may sub-contract a part of work to a specialist or sub-contractor, may be for plastering, plumbing or electrical. Builder has to stand responsible for all work carried out by a sub-contractor and put it right if anything goes wrong.
6. Crisil ratings: Ask whether the project is rated by a credit rating agency. It gives you insight of project as these rating are generally based on a detailed survey of a project.
Besides the point mentioned above, it’s a responsibility of a buyer as well to do a research before investing with a builder:
1. Builder’s Website: Check the builder’s official website, not for designs & colors but for the information they’ve put about themselves & the way it is presented to judge their profile.
2. Avoid low prices: If you find out a property at very low price comparatively to property very next to it, you should avoid investing in such property as it may incur litigation or is a fraud.
3. Hire an agent: It is always good to have an agent by your side not just for discounts & services, but also for support in case of any disputes with builder. They also keep you updated about your investment.
4. The trade body: Check builders association with bodies like CREDAI, BAI or NARDECO etc, as they set guidelines and provide ethical code of conduct that is mandatory for all members of such association.
5. Check on Builder Buyer Agreement: Read the agreement carefully before signing that if there is any price escalation clause, any penalty mentioned for delayed possession or any possibility of changes in layout or specifications of units allotted etc.
6. Every bankable property need not be legal: As a lot of misrepresentations are being done by builders, buyers should be aware that every bankable property might not be legal. So don’t just rely on banking of project, do search about if the title & sanctioned plan are clear, and approvals for water connection, sewage, electricity could be generated. Buyer’s can do it by simply filing a RTI with related authority.
7. Get recommendations: Talk to your friends & relative who have invested recently. Take testimony of Residents of past projects of builder to get a clear picture about the profile.
8. Check Consumer forum: Most convenient way of searching in this e-world is internet. Search on consumer forums and ask people if there’s any major complain regarding the builder.
9. Number of projects at a time: It is very important to understand that limited no. of projects should be run by a builder for successful completion. Otherwise, the funds for old projects are diverted towards new, leaving projects in a lay, slow work or incomplete work. Govt. has recently taken steps to put a cap on no. of projects a builder can run at a time.
10. Check construction quality: By visiting their under-construction sites, having a look over the material being used, quality of finish product to be installed like sanitary & electrical fittings etc.