For those of you getting acquainted with the real estate industry for the first time, it is only natural to come across new words, phrases and terms that may confuse you. For instance, a simple term such as 'area of the home' can be very misleading – this is because the area could be the carpet area, the built-up area or the super built-up area. It is imperative to get familiarised with real-estate terminologies to ask the right questions and prevent any complicated situations and misunderstandings.
1. Carpet Area
The term carpet area will be included in almost every property you review. The carpet area is the area of the residential property that can be used in its entirety to lay the carpet. Essentially it is the net area that can be put to use; it encompasses the entire area within the walls as well as any balcony. So when someone says the carpet area, you should know that it comprises the drawing room, bedroom, kitchen, living room, balconies, staircases and bathrooms within the apartment. It does not include areas beyond the walls, such as the lift, lobby, stairs and the building's open spaces.
2. Built-up Area
The built-up area covers the property’s periphery; it includes the terrace and balcony area, the inner and outer walls thickness and the carpet area. The built-up area, like the carpet area, does not include the standard stairs, lobby, lift, common playground etc. The built-up area is 1.10X to 1.15X of the carpet area.
Built-up Area= Carpet Area + Terrace and Balcony + Wall Areas + Exclusive Corridor
3. Super Built-Up Area
The super built-up area of a floor comprises the entire scope of the house that you can use. So this means the built-up area, as well as other usable areas like stairs, corridors, lifts, lobbies and so on, constitute the super built-up area. If you are looking to invest in a flat in an apartment building, then the common spaces, such as the hallways, lifts, staircases etc., are divided among flat owners proportionately to add to their super built-up areas.
4. Loading Factor
Loading factor is the area between the super built-up area and the flat's carpet area, which is used to construct common spaces such as a play area, swimming pool, elevators, lobby etc. So if you read that the loading factor of a flat is 1.50, it implies that the builder has supplemented your carpet area by 50%. For luxury apartments in Mumbai, the loading factor should preferably be below 60%. Anything higher would translate into a smaller carpet area, meaning you will settle for tinier homes.
5. Per Square Foot Rate
When it comes to buying and selling property, the unit in which the price is determined is the 'square foot'. Thus, this crucial rate is what makes or breaks every real-estate investment decision. The per square foot rate of an apartment’s super built-up area determines the price of apartments.
6. Floor Space Index (FSI)
Floor Space Index is commonly known as the floor area ratio and denotes the ratio of the total built-up area to the size of the actual plot area as permitted by the government. This is one of the most critical real estate elements; the higher the FSI or FAR, the more the built-up area of the building. Before signing the sales deed, the real-estate developer must produce the FSI.
7. Title Deed
A title deed is the most crucial piece of paper that authenticates property ownership. When investing in real estate, ensure that the name on the title deed is the owner's name. To be safe, always see the original title deed and not a photocopy.
8. Sale Deed
This, along with the title deed, are indispensable to a real estate investment. The sales deed is the sole legal document that records the event of the sale and needs to be signed by both the buyer and seller. This is the only document that legally validates the sale.
9. Real Estate Broker
Real estate brokers are middlemen who are also called relators, and essentially the ones that connect the buyer to the seller. These specialists mediate the deal and take a percentage of the sale as part of their commission for their services.
However, on blox.xyz, we leverage technology to show you suitable houses and charge a 0% brokerage fee, ensuring you get maximum bang for your buck.
10. Full-Service Rental Rate
Full-service rental rate is the rent one pay for a commercial property along with its operating expenses. Operating expenses typically involve taxes, maintenance charges, insurance, electricity utilities, and more.
11. Stamp Duty
In the real estate market, the government collects tax in the form of stamp duty. The percentage of tax levied ranges from 3% to 8% and varies as per the state.
The GST implementation burdened the industry and is expected to have an impact on real estate in budget 2023. Stakeholders are advocating stamp duty reductions as it is becoming challenging for developers to pass this cost on to the consumers.
12. Ready Reckoner Rates
"Ready reckoner" is another widespread real estate terminology you may encounter when exploring the market to make an investment. For each area, the government specifies the basic property prices corresponding to that area's limits. The stamp duty charges and minimum registration must be commensurate with these ready reckoner rates.
Investing in real estate is a very strategic decision, which is where we step in. At blox.xyz, we keep our potential home buyers abreast of real estate insights and critical updates, such as the next 5 year projections associated with this market, ensuring that your purchase is informed. This real-estate 'key terminology' sheet is just one of the many ways to increase your awareness about the real estate space.
