Builders and brokers
1. You get a smaller space than you thought: The area mentioned in advertisements and for calculation purposes is the super built-up area, while the area that you really get is the carpet area, which would be less by up to 30% or more depending on the building’s design.
2. All-inclusive price is not always ‘all’ inclusive: In most cases, the price advertised will be the cost of the house. But there are other charges that you would need to pay—charges for car park, club membership, power and water connections, among others. These will add up to a substantial bit. Don’t be surprised if what you finally end up paying is more than the advertised price.
3. There is compensation for project delays: Usually, this is not mentioned upfront, but builders do mention it in the sale agreement. In most cases, the amount of compensation is very small (around Rs5 per sq. ft a month). However, the deadline and the mode of handing over the compensation are not mentioned.
4. The brokerage fee you pay is negotiable: In north India, the broker fee is typically one month’s rent for arranging rented accommodation and 1% of the sale price for apartments. During the boom period, this fee was non-negotiable in most cases. But with the real estate sector doing badly, especially since January 2008, brokers have been ready to take a cut in fees.
Photoimaging: Raajan / Mint
Credit card companies 5. Global credit card companies have hidden charges: When you use your card to pay in foreign currency, you need to factor in more than just the exchange rate. For instance, you pay 3.5% of the total amount as cross currency markup, a service tax of 10.35% on the chargeable amount and a further 3% education cess on the service tax. More than you thought, isn’t it?
6. There is an upper limit on cashback cards: It’s not as if the more you buy, the more money you get back. You only get a maximum of Rs500 a month. Some cards may even require you to have a minimum statement amount to avail the facility. The amount may also be subject to a maximum of Rs250 per eligible transaction (this excludes loans and cash advance).
7. The ‘due date’ is not the last date of payment: If you think that the “due date” is the latest you can pay, you are mistaken. Actually, the payment needs to be credited to your card account by that date. Otherwise it is treated as a default. Cheque payments need to be made at least four working days in advance to avoid a default.