Buying a home is one of the biggest financial decisions of life. You do enough amount of research & due diligence before purchasing your dream home. Yet sometimes builder creates false pictures and cheat you. To make you aware we are here with some of the methods builders are adopting to cheat innocent customers.
How Property Builders Can Cheat You?
“Booking is almost full or There is only one flat available”
This is the most common statement made by builders to any inquiries about their projects. This is done by builders to create a false image of the booming market. In most cases it is found that the builder has either sold a few flats or not even sold a single flat.
He makes this statement to create negative emotional feelings in buyers. Due to this buyer will hurry up or will be ready to pay the higher amount.
Available flat in most cases is found on the top floor or at locations with bad views or bad ventilation, as builders want to get rid of this type of flats as early as possible.
“No flats are available directly but we have some flats in resale”
Another attempt to cheat you is by telling you that all flats are sold and no flats are available for direct purchase. This is just to show you that there is huge demand. But if you ask the builder to show a copy of register agreement or sale deed in most of the case answer will be that all were cash transactions and they don’t have any documents like this.
So they can show anyone as an investor, as no record exists for cash transactions it is very difficult to catch them.
This is generally done to show heavy demand for his project so that genuine customers can be fooled & he will be forced to pay a higher amount.
“Loading factor to make property price look cheaper”
A few years back concept of a super built-up flat was introduced. This means an extra common area of construction is also added to each flat, which includes a staircase, a verandah between flats, and all common places of buildings that you rarely use. The actual flat size will be around 25% -30% smaller than the super built-up area claimed by the builder. This 25-30% extra construction is known as the loading factor.
In most of the projects, this loading factor is decided by the builder. Builder does not provide you with any data or documents on this loading factor.
We do agree that the builder provided some extra amenities, left the passages and bigger corridors, or made extra basement parking and nothing wrong in calculating or taking the price for this, but it should be reasonable. It is found that in some cases loading factor goes up to 45%.
A 45% loading means that 45% of the carpet area is made for common usage.
Example of Loading Factor:-
Builder A is selling a flat A of 1000 sq ft super built-up.
Builder B is selling a flat B of 1000 sq ft super built up.
Pricing as per Super Built up
Flat A: 3000 / Sq ft Total Price 30 Lacs
Flat B: 2500 / Sq ft Total Price 25 Lacs
The loading on Flat A = 30%
The loading on Flat B = 45%
Thus the carpet Area that you get is
Flat A: 700 Sq ft
Flat B: 550 Sq ft
Now if you calculate the Price / Carpet area
Flat A: 4285 / Sq ft
Flat B: 4545 / Sq ft
It’s very easy for a common man to get confused and consider that Flat B is cheaper, but actually, he is wrong and making the wrong deal. Surprisingly we have observed that even regular real estate Investors have made decisions without considering the loading factor.
In case you find a difference in price for the 2 flats in the same area, then you can always check the extra amenities between the 2 projects and you can find on your own if the loading factor is justified or not.
This super built-up concept was never there and it was introduced a few years back. I think it is only for helping greedy builders to earn more profits.
I guess the government has no regulation or control on this, so buyers have no choice.
“You will get the legal papers only after paying the cash component of the deal”
Before buying any property you should check copies of all legal documents like approval of municipality, sample sale agreement, etc. This document should be verified by lawyer.
In some of the cases, it is found that the builder is not ready to give legal documents or may tell you that legal paper will be shown to you after paying the cash component of the deal.
In such a case, we request you not to make the mistake by blindly paying the builder in cash. It may be possible that you will never get this money back or you will be trapped.
At the end, I would like to say that check all aspects of the project and builder before making any real estate deal.
