In the festive season, real estate developers are offering big discounts and many other things free of cost, Yogita Khatri is explaining what are some of the things that work for those who buy a home in this marketing strategy.
This time the festive season is full of offers in the realty sector. There is no need to repay the EMI till the possession, millions of cash discounts, free modular kitchens, free cars to discounts from GST, all these items are included in this list. However the question arises whether these offers are okay or are they part of the marketing gimmick of Real Estate Developers to recover somehow from the property market, which has been idling for the last two years? Akash Bansal National Head (Consulting) of Liases Foras Real Estate Research and Research said, Lacey’s Foras Real Estate Rating and Research’s National Head (Consulting) Sky Bansal said,The cost of coarse debt is on the builders.Their margins are decreasing and inventory is increasing. So they are offering many types of offers to woo customers. ” It would be better to understand them properly before hitting such offers. These offers can be broadly divided into four categories: exemptions like cash or cash, non-cash discounts, subvention schemes and concession in GST. Let’s see if these offers decrease your cost or not.
Cash discounts: It clearly states how much cash will be available. It may be possible to give a cash discount of Rs. 150-300 per square foot or a lump sum discount of Rs. 5 lakhs (at a property worth Rs. 60 lakhs). It can offer registration and stamp duty charge exemption and free car parking etc. Ankur Dhawan, Chief Investment Officer, Real Estate Advisory Portal Propottiger said, “Such offers are easily understood. By this, the cost of Buyer decreases directly. These offers are usually limited for a limited time and under these the number of units is also limited. However, seeing such limited-time offers can be hasty in making decisions and this can go against the interests of the investor. The discount which is being given, should be looked at the first price.
The discount of 200 rupees per square foot at the base price of Rs 5000 per square foot can be attractive, but saving on the 600 square feet flat will save only Rs 1.2 lakh. In this case, it is necessary to examine every offer.
Complementary Furniture, Gadgets: Such offers include free modular kichen, free two or four wheeler, holiday package, gold coin, white goods etc. The question is, are they really free? Experts say that overall cost of any such offer is directly or indirectly added to the price of the house. Manoj Agrawal, founder of Agarwal Estates said, ‘Builders usually raise the base price to give such deals.’ Some developers might be offering deals in the right direction, but that property is only 1-8% of the cost of the property. Again, the products that are being offered, do not interfere with their quality.
Therefore, it is better to ask for cash discounts instead of these items from developers because you can use that money on your own. However, when buyers ask for a cash discount in exchange for free goods, they are given only about 50 percent of the value of the items being offered free of cost. Agarwal said, “Actually, the cost of those things is very low for the builder because he is buying them in a large number.” Even if cash discounts are low compared to the value of the goods, it may be better to take cash, which can help you get a good return from your realty investment. The value of the property may or may not be fetched, but the value of things offered in free will certainly decrease with the passing of time. Anarock Property Chairman Anuj Puri said, “There is no doubt that there is a lot of attraction in the freebies, but it should be seen whether there is any increase in the value of the property and the increase in the buyer’s savings Is it or not?
Easy payment plan: Pay 7-8 per cent right now and there is no EMI till the rest of the property gets the payment or till the possession is received. Many developers are offering this kind of flexible payment plan. Experts say that these schemes are meant to give them time for payments keeping in mind the concern of the buyers’ cash. However, these plans are not cheap. For those who opt for the Subvention Scheme, the property costs more than the full payers.
Siddharth Goyal Senior Director of Cushman & Wakefield Research (India) said,”The difference in prices can be 500 to 1,000 rupees per square foot. Therefore, you should definitely compare the exemptions on property prices on the subvention scheme and immediate payment. ‘
You should also check whether there is a time limit for the subvention scheme. For example, if the payment is to be paid by the end of a particular period or if you get a possession Goyal says, “Choosing a scheme related to the payment of payment is a good option as it will allow buyers to get maximum time to arrange payment and money.”
Some developers offer interest subvention schemes, where they take responsibility for payment of interest during the construction. This scheme also comes at the cost of the property’s higher basic price. Service share of interest of other buyers offers – If the bank is charging 9% interest, the builder offers to offer 4% interest during the subvention period. Vikram Goyal, CEO of HDFC Realty, said, “Such a scheme really helps the developers more because it helps them raise funds on low cost (4-7%) and will save financial institutions from borrowing. The rate is 11-12%. So you should be careful to find out whether the subvention scheme is really beneficial to you.
GST Exemption: Many developers are offering offers such as discounts from GST or no GST on their projects. At first glance, it seems to be a case of direct 12% discount (12% GST on under construction projects), but such advertisements may be misleading. Goyal said, “GST is applicable only on under-construction projects, which have not got occupancy certificates (OC).” So, the Ready to Move In Property can not be sold with a false claim of ‘GST sorry’.
If a builder is offering GST benefits on an underconstruction property, the buyers should definitely find out if the property has received a license. Also, prices of property before and after OC should be compared. Prior to the OC, the GST case involves the price and after the OC, the price is as little or little, this means that the full advantage of GST has not been given to Bayer. Agarwal says, ‘Builders usually do not reduce prices after getting OC. So, to know the real discount, you should ask about the price break-up. According to Dhawan, ‘You should also compare the discounts associated with GST apology. If there is a greater apology than the discount offered to the existing customer, then it can be considered as a special scheme. Reference-navbharattimes
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