Home / Money / Personal-finance /  Buying a house? Don’t let offers sway your decision

Dharmvir Singh, an IT professional, is planning to upgrade to a bigger house at a better location. With most developers already out with their annual festive offers, he can easily settle for one of the most suitable deals. “I have been getting calls from them now offering discounts and schemes so that I make a decision soon," said Singh. Though some of the offers sound good, Singh wants to take his time to find a house that is just right for him.

Singh booked a two-bedroom apartment in Greater Noida West (earlier known as Noida Extension) in 2013 while it was under construction and got its possession recently. However, the 34-year-old, who works in Vasant Vihar and lives with his wife and child in Vaishali, Ghaziabad, can’t think of moving into the house as it’s far from his workplace, is too small for his needs and has poor connectivity. “I want to sell this apartment and buy a bigger house, which should also be closer to my office," said Singh, who expects his mother to shift with him in a year or two.

Every year, around Diwali, developers come up with offers and schemes to attract buyers, in the hope of giving a leg up to the slow sales that the real estate industry is reeling under over the past few years. “We are optimistic that this season will improve the sentiment and bring back fence sitters in the market," said Surendra Hiranandani, CMD, House of Hiranandani.

Deals on projects under construction

Discounts and tax waivers: As per, a real estate portal, Dimple’s Group, a Mumbai-based developer, is offering discounts of up to 44 lakh to home buyers in its project, called 73 EAST, that is coming up in Kandivali West, Mumbai. The project offers two- and three-bedroom apartments at a starting price of about 1.7 crore. Another developer in Indirapuram, Ghaziabad, is offering various amenities free of cost, along with free car parking and waiver of the 12% goods and services tax (GST). Together, all these can bring down the cost by 30.57 lakh.

Puranik Builder is offering a discount of up to 10.95 lakh for its project named Abitante that is coming up in Pune. The project offers 2- and 3.5-bedroom apartments at 60-90 lakh.

Lodha Group, a Mumbai-based developer, is offering to pay stamp duty and GST along with giving an early bird discount of 6 lakh to buyers who book an apartment in their under-construction project named Lodha Amara, located in Thane, Maharashtra.

Subvention and part-payment: Some developers offer subvention and part payment schemes, especially at the time of projects launches or for under-construction properties, round the year, while a lot of others start offering them specifically during the festive season.

“For newer launches, lower upfront payment and the remainder on possession are standard subvention schemes," said Anshul Jain, country head and managing director, Cushman & Wakefield India, real estate consultants.

Under a subvention scheme, the initial payment or down payment that a home buyer has to make to buy a property is deliberately kept low to attract more buyers. For instance, M3M Group, a Gurgaon-based developer, is allowing booking in their project, named M3M Sierra 68, in Sector 68, Gurgaon, by just paying 5% of the apartment value; the remaining has to be paid at the time of possession. 

In case of part-payment schemes, homebuyers have to pay the property cost in three or four parts. Usually, the first part of the payment is lower at 10-30% of the property value; another part is paid during the construction phase and the last part at the time of possession. For instance, Satra Group, a Mumbai-based developer is offering 10:80:10 subvention scheme in its project Satra Harmony, located in Chembur, Mumbai.

Other offers and freebies: Developers are also offering various other freebies, including gold coins, I-Phones and cars, at the time of booking. Some others are offering free air-conditioners, modular kitchen, furniture and so on.

Deals on completed projects

The declining sales volumes over the past few years has led to huge unsold inventory of ready-to-move-in property. With chances of improvement in demand or price bleak, it doesn’t make sense for developers to hold on to them. “There could be new launches around this time, but developers are focusing on easing existing inventory," said Hiranandani.

In order to clear such inventory, various developers are offering waiver of tax and other fees. “For existing inventory which is closer to completion freebies are accompanied by waiver of GST, stamp duty or registration charges or the additional costs over and above the basic cost of the apartment," said Jain.

A lot of buyers too now prefer completed projects because of the uncertainty involved with under-construction projects. “We are witnessing strong demand for ready-to-move flats over under-construction ones," said Hiranandani.

Online Deals

Realty portals are going hand-in-hand with developers and providing them a platform to reach large number of potential home buyers., a real estate portal owned by Elara Technologies Pte Ltd, which also owns real estate portals and, has announced its annual, online home shopping festival, Home Utsav 2018, from 1 October to 31 October, offering deals, offers and new features. About 150 developers and 500 channel partners will showcase over 350 projects in the event across India. 

What should you do?

Buyers should not be swayed only by packages and offers and do thorough due diligence on the project and the promoter," said Jain. Like Singh, you should not let freebies and discounts drive your purchase decision. Buy only when you find a property that suits your needs.

“These offers can be rewarding if the customer has picked the right developer and project. White goods freebies make sense if the property itself is of inherent value to the buyer," said Anuj Puri, chairman, Anarock Property Consultants.

You should be especially careful about financial schemes like No- EMI till possession, subvention schemes, part payments and so on. It’s important to understand these thoroughly to assess if it can benefit you. “They can be misleading if the financial schemes are not transparent and the buyer does not read and understand the fine print," said Puri.

Ideally, one should evaluate all the freebies and offers in terms of money. Instead of accepting a freebie, try and negotiate with the developer for cash discounts. “Straight up discounts on prices are definitely beneficial for buyers. In other cases as well, waiver of certain charges or certain freebies help keep the overall cost within the buyer’s budget," added Jain.

“A price discount is the clearest and most decisive incentive that a developer can offer, but a buyer should focus equally on the value obtained and the money saved," said Puri.

So before you consider an offer or scheme, find out the monetary benefit that you would derive, avoid offers that you don’t need and insist that the developer adjusts the value of gifts in the property value. But most importantly, don’t look at real estate only because there are offers on the rack.

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