Things To Keep In Mind During Property Transactions

<p><em>Lack of proper structure and a standard model of market operation is primary reason of a growing distrust between buyers and developers, writes <strong>Gaurav Yadav</strong></em><br><br>Investing in your long-yearned dream is not just based on one single decision. It is an amalgamation of various factors which play an essential role in your hunt for the perfect heaven. Family aspirations, personal motivations, financial limitations and prevalent policy and real estate norms - all of these impact your decision in one way or another.<br><br>We all believe that property is one of the best thing to invest in, considering it as a recession proof investment.&nbsp; There are many reasons behind why we feel that buying property is the best investment vehicle for long term wealth. Moreover the demand for property will always outweigh supply, keeping the prices high.<br><br>But property being a smart investment can become a huge trouble for a person who is un-aware about things that should be kept in mind while purchasing a property. Most booking agreements for real estate projects start by emphasizing the importance of being aware of the terms and conditions mentioned therein. But how many of us take the trouble of going through these agreements?<br><br>This is important because most clauses in these agreements aim at protecting builders from legal troubles while giving very few rights to buyers. If you do not have the time or inclination to go through the legalities, you should at least take care of some key points to avoid fraud.&nbsp; Hence, it is very important to choose the right property for yourself.<br><br><strong>Legal Background: </strong>Taking keen interest in knowing the legal background of the developer will help the buyer ensure that the developer has not been in any legal hassles.<br><br><strong>Financial Stability: </strong>Financial Stability of the developer is another aspect to keep in mind that states the credibility of the developer in the market. Listed firms have an edge over other real estate companies as they are under the scanner of Securities and Exchange Board of India (SEBI).<br><br>They mandatorily follow principles and guidelines issued by SEBI and are required to submit financial statements. Due to better corporate governance and audited financial statements, such listed real estate firms have better chances of sourcing funds from financial institutions, provided they are performing well. &nbsp;<br><br><strong>Listed Company: </strong>The state of a listed company is more visible to the buyer and it can assist in making a comprehensive investment decision. A listed firm provides higher transparency and accountability as its activities directly impact its share prices. Aspects such as financial leverage, delivery versus commitment, internal and external focus, etc should be carefully studied.<br><br><strong>Title Of The Land: </strong>Make sure that the title to the land that of the project and all the regulatory approvals are in place. This needs to be done irrespective of the nature, size and reputation of developer. The buyer should insist on verifying all documents pertaining to land title, approvals of building plans and commencement of construction. It is always a good idea for a group of buyers to get together and hire professional legal expertise to get due-diligence done.<br><br><strong>Track Record Of The Developer: </strong>The track record of the developer in delivering projects is a key criterion while buying any property. Amount of space delivered, timelines for delivery and quality of work produced is critical for the buyer to analyze. A developer with an impressive track record will surely deliver better than any other developer.<br><br><strong>Tech Savvy Developer: </strong>With technology leading the way, a consumer is sure to enjoy more benefits if he chooses a tech savvy developer who is always implementing the latest technology in construction along with the various amenities provided to the consumer. The final investment decision of the customer should ideally be a combination of credibility of the company, an assessment of the project fundamentals and his understanding of the market situation.<br><br><strong>Return On Investment:</strong> Certain factors that can assure good return on investment to a buyer in case of re-selling the property is another aspect that should be considered. Evaluate various aspects of the project like the master planning and amenities provided. Developers these days are getting international expertise to master plan their project and consumers can get a feel of it by going through the master plan.<br><br><strong>Location: </strong>Location of a project is very important. The real estate development in the surrounding areas and the connectivity of the project to important centers in the city such as school, hospital, bus and rail services, shopping complex, etc. is something the buyer should first look at before planning to invest.<br><br><em>The author is founder &amp; director of UdayHomz.com</em></p>