Buyer due diligence as end users

Locality profile: If you are buying a property/flat/apartment for self use, it has to be decided with consultation in family where you would like to stay in the long term. The social and economical profile of other residents in the neighborhood, facilities and amenities available in that Locality, infrastructure i.e. roads, electricity, sewer line and other projects in the area, Good public transport connectivity and good health of roads are all issues you would like to take into consideration before you buy a property for self residential purpose. Each of the above mentioned features will affect the quality of your living and also determines the cost that you have to pay in lieu of property. If you are buying property for future use, you must compute what will be the profile of the neighborhood in future.

Stage of construction of Housing Society:

You can purchase new property in and during following three stages –

  • At the time of launching of project
  • During the construction i.e. mid-way
  • At the time of possession

Old properties or already build flats/apartments or properties can be bought either in as-is condition, Old properties requires maintenance and repair work before use or we can say that it requires renovation or redevelopment to use it. If one is staying in a rented flat/apartment, he must invest in a real estate property that is ready for possession sooner or later you will feel the ease on the part of rental outflow when you shift your accommodation from rented to your ready to move apartment. If one is buying an apartment/flat at the time of closer to possession entails a higher value than at the time of launch.


Profile of Builder or Developer: You must check the past track record of the developer or builder. Whether he has been giving possession of flats on time, what is the experience of past buyers, whether they are happy with the quality of construction and services provided by the builder, who will manage the services, and other day to day maintenance in real estate property. Whether the developer or Builder is member of CREDAI which brings in a little more accountability to his profile. Price Bracket Property or Flats: It must take into consideration that your monthly EMI should not exceed 40 per cent of your monthly pay packet or you will find it difficult to meet the EMIs.


Due Diligence For Investors:


Investor buys or purchases real estate or property primarily to grow it money or you can say to fight the inflation. Here is also multiple options are available to Investors:


At the time of launch of Housing Project: One can get the best values and even an inaugural discount in many cases at the time of pre launch of project. One is investing in a real estate property that is 24-36 months away from possession. One can get the best rates in beginning of construction of flats. There is also a risk that under construction or new project may be delayed and possession may come after another year or two. There are some investors who purchase the under construction flats by paying a 10% of the value and then pay a subsequent second and third installments and then encash the differential between the paid up and market value of the real estate property. This money got by the sale of property can then be invested in another project that has to be launched in future. This type of investor books short-term profits in properties. This type of investment is a high-risk-high-return and the investor needs to be very aware about the progress of the housing project and the market values. Local property agents and brokers are the best source of getting real prices/value of the flats.


Semi-Constructed flats: You can buy a semi-constructed property flats in a locality that you want to live in. This semi constructed property will shorten the lifecycle of rent and EMI. One has to pay a slightly higher price than at the launch but the flip side is that you will be sure when you get possession.


At the time of Possession: Some person may want to opt for the property or flats that has already reached the possession stage. Here, the values may be 25 per cent higher than while it is under construction but there is no risk as the property is ready-to-move-into or for fit-outs.

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