6 Things To Check Before Buying An Under-Construction Flat

One of the first decisions you must make as a prospective home buyer is whether to invest in a ready-to-move flat or an under-construction apartment. Buying an under-construction property has certain advantages, but there are some things you must consider and check before investing.

Advantages of investing in an under-construction flat 

• The greatest advantage of investing in an under-construction project is lower pricing. On average, under-construction properties cost about 20% less than ready-to-move apartments. While this also means that you will have to wait till the construction is completed, this could result in a lower home loan and EMI in the long run.
• One of the main reasons homebuyers prefer under-construction properties is the prospect of quick appreciation of the real estate asset. As mentioned above, ready-to-move properties cost considerably more. This means your asset value is already higher by the time the construction is complete and you take possession of the apartment.
• The sale of an under-construction property translates into higher liquidity for the developer. This prompts builders to offer a number of discounts and add-ons to a homebuyer investing during the construction phase. From an extra parking spot to the choice of floor, homebuyers investing early can find several attractive reasons to buy an under-construction property.
• Buying an under-construction property allows you the advantage of being able to take possession as soon as the occupancy certificate is issued and being able to live in a new flat. This is also good for community building and those looking to build a life in a new locality.

Despite these advantages, homeowners have several concerns about investing in under-construction properties. Delay in delivery, adherence to quality, and conformity with approved plans are among the worries homebuyers have. Here are some things to check before buying an under-construction flat that can assuage your concerns.

Things to check before buying an under-construction flat

1. RERA registration and compliance - The Real Estate Regulation and Development Act (RERA), 2016, ensures that the developers comply with the specifications of any project registered with the state's RERA authorities. It offers homebuyers safeguards from delays and allows them to seek legal recourse when the quality or timeline of the project has not been adhered to. It is thus very important to check the RERA registration number and details before investing.
2. Developer reputation – While investing during the construction stage can bring concerns about possible delays, this can be managed by researching the reputation of the developer. Some of the leading builders in Mumbai and other major cities have earned the trust of homebuyers by strictly adhering to promised timelines and delivering high-quality homes.
3. Title deed and permissions – While checking and verifying the land title and the requisite permissions are important for buying any real estate property, this becomes significantly more necessary in the case of newly launched or under-construction projects. At the same time, it may be important to check the soil testing certificate and the quality of construction materials in the proposed construction.
4. Floor and unit plans – You get what you see in a ready-to-move property. Many of the details, such as the layout, the space, the views, etc., in under-construction flats are left to the imagination of the buyer. This makes it important to study the approved floor and unit plans and check any computer-generated renditions the developer may have.
5. Builder buyer agreement – The BBA or the builder buyer agreement is the legal document that clearly details the builder's responsibilities and your rights as a home buyer. It will also provide you clarity about the timeline or the various stages of construction and the tiered payment schedule. It is a legally binding agreement and one of the most important things to check before buying an under-construction flat.
6. Loan terms – Most of us opt for home loans or financing when buying a property. In the case of under-construction properties, banks may charge you only the interest on the loan amount disbursed during the construction stage. You complete the EMI of principal repayment, and interest on the total loan may start after construction is completed. This is something you must check when applying for a loan and before buying the property.

Buying an under-construction property may require an additional level of checks and precautions, but the benefits are quite lucrative as well. It is always a good idea to keep yourself updated about the progress of construction and the development of the project after having invested.