If you are planning to buy a property under
construction, don't just go by the brochure claims. A lot depends on the builder's
competence and resources. ET lists some checks before you finalize
a project
1. Groundreport
You can conduct a quick Internet search by keying
in the company name since customer forums, blogs, news reports, property
sites, etc, typically have a lot of information. However, it is still a good
idea to go in for field research. Talk to customers who bought units in old
projects as well as local brokers. The current market price of the past
projects in comparison to peers in the same locality is also an indicator
of the builder's standing. You should check the credentials of the
contractors associated with the project as well.
2. Trackrecord
It is safer to buy from an experienced builder with
a good delivery record since he is likely to have a more professional
approach, with systems and processes up and running. Besides, you can check
his track record and find out how well the past projects have been executed.
Remember, lack of transparency is a good enough reason to not buy. A
reputed builder will also typically be a member of an industry association,
such as the Confederation of Real Estate Developers Association of India
(CREDA),or the Builder's Association of India (BAI). These are
self-regulatory bodies that have strict norms for builders and any deviation may
lead to the company being blacklisted by the association
The International Organization for
Standardization's 9001:2008 certification criteria for a quality management system is based
on eight principles, including customer focus and satisfaction.
Therefore, an ISO 9001:2008
audited and certified builder is expected to be
more professional in his approach, and it is a good idea to check this
before zeroing in on a housing project.
4. Realty
ratings
Started in 2010, the CrisilBSE 1.29 % Real Estate
Star Ratings (Crest) provide cityspecific assessment of real estate
projects, and can help you compare and identify quality projects in a
particular city. They also have a National Developer Ratings list, which rates a
developer on parameters such as good track record of transfer of clean title,
maintaining legal and construction standards, and timely project
completion. However, the developer has to register with Crisil to be rated
and not many projects are on its radar yet.
5. Financial
stability
Is the company overleveraged? Get hold of the
company's balance sheet, and if the business has too much debt or is unable to
repay its loans, strike off the project. Some listed builders put up their
financial details on
their websites. For others, you can contact the
concerned Registrars of Companies (ROC) office. The Ministry of Corporate
Affairs' website (Mca.gov.in/MCA21/) also has the details. Log on
and register yourself to view all company documents under the 'view public
documents' section. The
site will ask for information like company
CIN/FCRN, registration number, ROC details, which should be easily available with
the company, or you can run a Google search. Also, check the cash flow statement
(not income statement). Companies with strong cash flows are
likely to complete the projects on time.
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