Real Estate Doc

7/30/2019 Real Estate Doc

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1. CHARACTERISTICS OF REAL ESTATE INVESTMENT:

Real estate properties have its own some important features. Some of the

characteristics that make real estate unique as compared to other investment

alternatives are as follows:

(1). Tangible:Real estate is, well, real! You can visit your investment, speak with your tenants,

and show it off to your family and friends. You can see it and touch it. A result of

this attribute is that you have a certain degree of physical control over the

investment - if something is wrong with it, you can try fixing it. You can't do thatwith a stock or bond.

(2). Requires Management:

Because real estate is tangible, it needs to be managed in a hands-on manner.

Tenant complaints must be addressed. Landscaping must be handled. And, when

the building starts to age, it needs to be renovated.

(3). Inefficient Markets:

An inefficient market is not necessarily a bad thing. It just means that information

irregularity exists among participants in the market, allowing greater profits to be

made by those with special information, expertise or resources. In contrast, public

stock markets are much more efficient - information is efficiently dispersed among

market participants, and those with material non-public information are not

permitted to trade upon the information. In the real estate markets, information is

king, and can allow an investor to see profit opportunities that might otherwise not

have presented themselves.

(4). High Transaction costs:


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Private market real estate has high purchase costs and sale costs. On purchases,

there are real-estate-agent related commissions, lawyers' fees, engineers' fees and

many other costs that can raise the effective purchase price well beyond the price

the seller will actually receive. On sales, a substantial brokerage fee is usually

required for the property to be properly exposed to the market. Because of the high

costs of trading real estate, longer holding periods are common and speculative

trading is rarer than for stocks.

(5). Lower Liquidity:

With the exception of real estate securities, no public exchange exists for the

trading of real estate. This makes real estate more difficult to sell because dealsmust be privately brokered. There can be a substantial lag between the time you

decide to sell a property and when it actually is sold - usually a couple months at

least.

(6). Underlying resident Quality:

When assessing an income-producing property, an important consideration is the

quality of the underlying residence. This is important because when you purchase

the property, you're buying two things: the physical real estate, and the income

stream from the tenants. If the tenants are likely to default on their monthly

obligation, the risk of the investment is greater.

(7). Variability among Regions:

While it sounds clich, location is one of the important aspects of real estate

investments; a piece of real estate can perform very differently among countries,

regions, cities and even within the same city. These regional differences need to be

considered when making an investment, because your selection of which market to

invest in has as large an impact on your eventual returns as your choice of property

within the market.


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2. ADVANTAGES AND DISADVANTAGES OF REAL

ESTATE INVESTMENTS:

ADVANTAGES:Investing in real estate is as advantageous and as attractive as investing in stock

market. Here are the main benefits of investing in property market.

Real Estate Investments are Less Risky:

As compared to other investments, less of misadventure is involved in a real estate

property.. Real estate investments are traditionally considered a stable and rich

gainer, provided if one takes it seriously and with full sagacity. The reasons for the

real estate investments becoming less risky adventure primarily relate to various

socio-economic factors, location, market behavior, the population density of an

area; mortgage interest rates stability; good history of land appreciation, less of

inflation and many more.

No Need for Huge Starting Capital.A real estate property can be procured for an initial amount as low as 1,00,00 to

2,00,000 and the remaining amount can be taken on holding the property as


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security. This is what you call High Ratio Financing. If you don't have the idea as

to how it works, then let explain with the help of an example.

Honing Investment SkillsA real estate investment, especially when you buy a condo for yourself, will be a

pleasurable learning experience. It gives you the opportunity to learn and when you

went ahead with your first real estate property.

Not a time taking AdventureReal estate investment will not take out all your energies, until you are prepared

and foresighted to take the adventure in full swing. You can save hell lot of time, if

you are vigilant enough to know the techniques of making a judicious investment

in the right time and when there are good market conditions prevailing at that point

of time.

Leverage is the Right WayThe concept of leverage in real estate is not a new one. It implies investing a part

of your money and borrowing the rest from other sources, like banks, investment

companies, finance companies, or other people's money (OPM). There have been

many instances where people have become rich by practically applying OPM

Leverage Principal. Moreover, in case the lender is interested in selling the

property, the net proceeds resulting from the sale of the property should

comfortably cover the mortgage amount.

Real Estate Appreciation

An appreciation is an average increase in the property value over original capital

investment, taking place over a period. There are some neglected real estate

properties that have an appreciation below the average mark, whereas, some of the


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properties located in maintained geographical areas, showing high demand, have

an above average appreciation. In such centrally located and high demand areas,

the average appreciation can reach up to 25% in a year.

Low InflationInflation is the rise in the prices of the products, commodities and services, or

putting it another way, it is the decrease in your capacity to buy or hire the

services. Supposing, a commodity was worth $10 a decade back, will now cost $

100 as the result of inflation. Comparatively, real estate sector has minimum rate of

inflation.

Tax Exemptions

You get various tax exemptions on your principal and investment income

property. The tax exemptions available in real estate property investment are more

than available in any other investment. In other investments, you lose terribly on

the investments in your bank in the form of inflation and high taxes therein, but in

real estate; you don't actually have such hindrances.

There are several beneficial provisions in the Income-tax Act, 1961

which promote investment in residential properties, having regard to the need for

housing millions of citizens. Of course, only those who pay taxes can take

advantage of the appropriate incentives given under the law.

Interest payable on loans taken for purchase or construction of house is deductible

to the extent of Rs 1.5 lakh every year, though the annual value of one self-

occupied residential property is exempt from income-tax. In addition, repayment of


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the installment of housing loan is deductible to the extent of Rs 1 lakh per annum

under section 18-C.

High Return on Investments

Real estate investment gives you potentially high Rate of investment before and

after the taxes levied on your income. In fact, investing in real estate gives you

high ROIs after the taxes

Net Positive and High Income is Generated.

Increased demand for properties.

DISADVANTAGES

Beside the large potential of return on Investments, there are certain levels of

Disadvantages. These disadvantages can be easily taken off, if you have an insightabout the limitations of real estate investment and what can be its short term as

well as long-term repercussions.

Taking Wrong Decisions

People going for the real estate investment property take decisions in haste. Make a

firm decision when you go for purchasing your first real estate property, is just noteasy man. If you are swayed by emotions, you will be ruined.

No readily available Liquidity:


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With your real estate investment, you need to know one thing straight,

and that is you simply cannot aspire hard cash immediately. You have to wait and

watch the market movements and other socio-economic and political, economic

factors before selling your real estate property, like a mall or your home.

Eats away your time and energy:

Real estate investment can get you real fatigue. It is a lethargic time consuming

process that makes you feel almost laid back. You need to plan and have those

instincts to get going with your property. You will learn more on about making you

real estate investments more time efficient in later part of the chapters.

A Risk full decision can harm:

Investing in a real estate property can be a risky and costly even, if you

are not prepared before, you will make losses. Not just losses but, but you will

become a pauper. Remember, as I said in my earlier statements, Real estate market

is speculative.

No Stringent Comparison Methodologies

Real estate market is variable. The price of two real estate properties can

vary a great deal, provided you keep other factors such as time and location,

constant. No two real estate properties can have exact. There always exists kind ofvariation and this need to be taken into account. Though, you do have the existing

rule of thumbs and set strategies, but all these are workable, if tried in combination.

Guided and Drawn on Government Policies:


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Government policies and regulations play an indispensable role in

deciding on the real estate investment. These policies and regulations include

control the zone based bylaws, construction activities; property prices; rent controlprocedures; license dispensations and property transfers; taxes etc.

3. The Factors that affects the Real Estate market:


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Micro factors;

There are certain Micro factor that influences the propertymarket and its aspects. Suppliers, Cost of materials, firms competitors and alsomarketing intermediary are the major elements that have effect on propertybusiness.

Macro Factors:

Factors like political, legal, social, global and demographic arethe Macro environment with generally influences real estate industry in large scale.

4. Government regulations in Real Estate sector:

Real EstateMicro Macro

Supplier,

Cost,

Competitor

Marketing

Intermediary

Social,

Legal,

Political

Global and

Demographic


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Much of the over 100 laws governing various aspects of real estate in India datesback to the 19th century and major amendments to existing laws are required tomake them relevant to modern day requirements. The Central laws governing realestate include:

Registration Act, 1908

The purpose of this Act is the conservation of evidence, assurances, title,

and publication of documents and prevention of fraud. It details the

formalities for registering an instrument. Instruments which it is mandatory

to register include:

(a) Instruments of gift of immovable property;

(b) other non-testamentary instruments which purport or operate to create,

declare, assign, limit or extinguish, whether in present or in future, any right,

title or interest, whether vested or contingent, to or in immovable property;

(c) non-testamentary instruments which acknowledge the receipt or payment

of any consideration on account of instruments in (2) above.

(d)Leases of immovable property from year to year, or for any term exceeding oneyear, or reserving a yearly rent.

Urban Land (Ceiling and Regulation) Act

(ULCRA), 1976

This legislation fixed a ceiling on the vacant urban land that a 'person' in urbanagglomerations can acquire and hold. A person is defined to include an individual,a family, a firm, a company, or an association or body of individuals, whetherincorporated or not. This ceiling limit ranges from 500-2,000 square meters (sq.m). Excess vacant land is either to be surrendered to the Competent Authority

appointed under the Act for a small compensation, or to be developed by its holderonly for specified purposes. The Act provides for appropriate documents to showthat the provisions of this Act are not attracted or should be produced to theRegistering officer before registering instruments compulsorily registrable underthe Registration Act.


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The objective of acquiring the excess vacant land could not be achievedbecause of intrinsic deficiencies in the legislation itself.

Stamp Duty:

There is a direct link between Registration Act and Stamp Act. Stamp

duty needs to be paid on all documents which are registered and the rate

varies from state to state.

Rent Control Act:

Rent legislation in India has been in existence for a very long time.

Rent control by the government initially came as a temporary measure to

protect the exploitation of tenants by landlords after the Second World War.

However these rent control acts became almost a permanent feature. Rentlegislation provides payment of fair rent to landlords and protection of

tenants against eviction. Besides, it effectively allows the tenant to alienate

rented property.

Property Tax:

Property tax is a levy charged by the municipal authorities for the

upkeep of basic civic services in the city. In India it is the owners of property

who are liable for the payment of municipal taxes whereas in countries likethe United Kingdom, the occupier is liable. Generally, the property tax is

levied on the basis of reasonable rent at which the property might be let from

year to year. The reasonable rent can be actual rent if it is found to be fair

and reasonable. In the case of un-let proper-ties, the rental value is to be

estimated on the basis of letting rates in the locality.

You need to admit it. Buying property is not all that supremely easy. You need to think about the

appreciation value, the investment benefits, the legal hassles, the builder repute , home loan

approvals and all that jazz. So here is a check list for you that will come in handy while you buy

thatdream property.

5.Basic things to be checked while buying property:

1. Name & title of Land should be very clear in the name of seller
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2. Check whether the seller obtained Loan for that property, accordingly a paragraph in sale

deed to be added saying that the seller is responsible to clear all the dues

3. Ask for Moola pathram/Parental Documents

4. All major children ie., major children of Sons & Daughters should sign in the

bond/agreement

5. Municipal tax dues/Water tax dues/Land Revenue dues & any other dues to be paid fully

before the transaction

6. Villangam & Viharam nothing has to assured. In case, of above and any hindrance to

property the seller will clear the issue and dues on his own accordingly a paragraph to be

included in sale deed

7. Obtain No Encumbrance certificate from concerned authorities.

8. Mention the Flat No & Plot No in South/East/West/North/Complete Land area

Length/Breadth and Diagonals also in the Sale deed.

9. Check on TNEB charges and dues

10.Check whether thepropertyis in seller name or is it with Joint venture development

11.Sellers any of the blood relation should not claim in future & if any claim arises then itwill be sole responsibility of the seller to get involved and clear all such disputes.

12.Get the identity and address proof of the seller

13.Obtain all payment receipts, Patta , Chitta ,Adangal extracts ,Up to date tax payments

receipts of Water/TNEB/Property/Corporation/Municipality/Revenue & other taxes etc.

14.Confirm the originality of stamp papers and only purchase stamp papers from Govt

services ie., Registration of Assurance offices only

15.Date of purchase of stamp papers must match with the date of the documents Most

important

16.Obtain Genealogical tables (family tree) of the seller, will, certificate of husband/wife

and other inter connected all documents although the above many not be required forregistration

17.Crystal clearly shows door no/flat no/plot no and other descriptions of theproperty

18.Check if any third party interests, suppression of previous transaction, prior agreements if

any, litigation and other pending matters, which are brought to light during various stages

of purchase /negotiation

6. Classification of Properties:

Real estate has been broadly categories into 3 classes as follows:
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(A). Residential Property:

The residential type of property is by far the most popular with both new and

experienced agents. Residential property offers a good investment avenue. People

buy residential property for two important reasons:

For staying

As an investment

Advantages of Investing in Residential Property

Expenses, including depreciation on the property and interest on your

borrowings, are tax deductible.

You make money as the value of the property increases.

You can leverage your investment.

You get rental income.

Risks of Investing in Residential Property

Interest rates could rise.

Types of

Property

(A). Residential

Property (B). Commercialproperty (C). Vacant land


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The property could be untenanted for a period of time.

You could get "bad" tenants.

It could take up a lot of your personal time.

House prices could remain static, or even fall.

The following are the type of Residential Property:

Single Family Residence

Row Houses/ Townships

Flats

Bungalows

(B). Commercial Property:

1.Multi-Family Commercial Real Estate:

Commercial real estate property types include duplex homes, and other

construction for habitation by multiple family groups. Condominiums are

frequently called multi-family because of their construction as a group, but are

normally listed and sold as single family residential units. Duplex homes are also

frequently listed and sold as residential units to a buyer that lives in one side and

rents out the other.

2. Retail Space Real Estate Properties:

This category would include single buildings used as stores for clothing,

electronics and other consumer products, as well as malls, strip centers and the

like. Restaurant spaces are a specialty subset of the retail category, with some


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listings shown as restaurant/retail. Valuations can be based on size and land value,

retail sales per square foot or other investment return calculations.

3. Office Buildings and Office Complexes

A single building designed for office use, or a group of offices in a single building

or cluster of buildings would fall into this category. When offices are grouped in

structures with single ownership, they are listed as commercial office rental

property. The owner derives income from the rental payments of the office tenants.

These can be valued based on the rental income return on investment, rather than

methods using square footage and land value. Medical & Dental offices are a

subset.

(C). Vacant Land

Land Investment has historically been the forte of large development

companies, rich farmers or wealthy individuals. It can be a profitable business if

proper development of land is undertaken. Land Investment is referred to as a long

term investment and with land prices on the rise in many parts of the world, it is

said to be the safest and smartest way of investing ones money.

Capital gains can easily be realized from land when land price increases.

The most striking feature of land investment is that investment takes place in a

tangible asset which the investors can readily put into use. It is a branch of real

estate investment which is gaining ground as major part of capital budgeting

analysis. Real estate is basically defined as immovable property such as land and

everything permanently attached to it like buildings. It is essentially at this juncture

that land as an asset differs from real estate as it does not necessarily includes


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buildings and the attachments to the land.

Land is perhaps the most basic asset that we want to invest in and may include vast

open tracts with no significant estate on it. The job of developing the land lies with

the developer, and with proper care to include modern houses and the associated

amenities, it will significantly appreciate its value. Land situated close to

developed areas will cost more as opposed to those in less developed areas. Land

developed for commercial purposes and those developed for building residential

complexes will have different prices and tax implications, if any.

Investing in land can be profitable as there is limited supply of land and the

purchaser can really sell dear if he wants to.

7.SWOT ANALYSIS OF REAL ESTATE SECTOR:

The strengths, weaknesses, opportunities and threats for the Real Estateindustry have been tabulated below.

Strengths

1. Availability of construction rawmaterial.2. Low labour wage rates.3. Abundance of quality manpower.4. Availability of land bank.5. Huge population of the country.6. Increasing demands from themarket.

Weaknesses

1. Unscientific construction.2. Low quality work.3. Non adherence to internationalstandards.4. Low R&D investments.5. High cost of debt.6. Inadequate Govt support.7. Least effort towards low costhousing for low income and ruralareas.

Opportunities

1. Very vast market.2. Growing demand.3. Un-restricted business

Threats

1. High land value in big cities.2. Less assistance from Govt.3. Recessionary world market.


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opportunities.4. Favourable market condition5. Increasing income level offamilies.

4. Outsourcing jobs moving tosmaller countries like Phillipines,Malaysia etc.5. Increasing terrorist activities

which dampens tourism.6. Entry of international retailersinto India

8.Key Players

Name Service Profile Presence

Akruti Nirman Residential, Commercial, Retail and Hospitality Specialises in

implementing the Slum Rehabilitation Scheme (SRS) in Mumbai Access to

prime land in Mumbai at a very low cost with higher FSI permission A majority

of its projects are in Mumbai due to the SRS Scheme. Other cities include

Baroda and Pune.

Ansal Properties & Infrastructure Limited. Residential and Commercial

Developing integrated townships alongwith malls and hotels IT parks and SEZs

Pan-India footprint with major presencein 16 North-Indian cities across 4 northern states.

DLF Integrated presence across all the asset class including Residential,

Commercial and Retail. Further, has plans to venture into Hotels, Infrastructure

and SEZs Accredited to be largest real estate developer in India. DLF City is a

township spread over 3,000 acres in Gurgaon, Haryana, Asias largest private

township 574 million sq. ft. of BUA under planned projects. Pan-India footprint

Operating in 29 cities, across 16 states Majority of the projects in Hyderabad,

Gurgaon, Kolkata, and Chandigarh are also major cities of activity .

K Raheja Corp. Commercial, IT office, SEZ, Hospitality, Retail and Residential

Developing 15 self-contained townships and 10 hotels Major presence in


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Mumbai Other locations are Bengaluru, Ahmedabad, Goa, Pune and

Hyderabad.

Parsvnath Developers Residential, Retail, IT Parks and Commercial Plans to

develop 12 SEZs across the country Pan-India footprint with a focus on National

Capital Region Active in over 46 cities across 17 states Plan to increase to 20

states and 250 cities by 2010.

Sobha Developers Residential, Commercial, development of plots and

contractual projects Mostly concentrated in and around Bengaluru with some

presence in Cochin, Chennai and Pune.

Unitech Residential, Commercial, SEZ development, Retail and Hospitality

Integrated townships at a number of cities such as Hyderabad, Agra, Varanasi

and Lucknow Pan-India footprint with major presence in National Capital

Region, Kolkata, Chennai and Hyderabad.

9. CONSIDERATIONS WHILE MAKING

INVESTMENT IN REAL ESTATE

When it comes to making money, Real estate is considered to be one of the surest

investments. Lots of opportunities abound, whether it be in the stock market or in

business. But these areas also offer a significant amount of risk. As a result, most

people do not engage in these speculative activities. But real estate is something

which more people can be involved in, simply because everyone needs a home to

live in. However, no investment is entirely risk free, and so even here a certain

amount of due diligence is required.

Some important point you need to think about:


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1. Identify the developer

2. Is the project a self development / partnership / joint venture

3. Past business / trading history

4. The location of the proposed project

5. Basic amenities

6. The growth prospects of the neighborhood development

7. Industrial and business development in the locality

8. Price comparison analysis

9. Future property price valuation

10. returns on your investment

Affordability is a key consideration when making any purchase. One should factor

additional expenses such as electricity and property taxes to get a complete idea of

how much can be afforded.

An integrated service model offering end-to-end - 360 Realty Services to caterto the diverse needs of corporate & developers in project management &execution. Managing realty projects right from identification to marketing is alengthy process replete with many challenges. You may be keen to execute realtyprojects for commercial / residential purposes but may not be equipped with theright skill-sets / know-how for the undertaking.Professional agency offers you with a integrated service model meeting the entirerealty business needs to help you successfully undertake your realty projects.Professional agency offers you with a unified value-chain of core realty serviceswith critical forward & backward integration of other value-added services. Theservices are effectively streamlined enabling steady progression of the projects,right from idea conceptualization to profit generation / hand-over, encompassingall functional & operational tasks.


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1.Market study:

Market study refers to detailed analysis of market and locations

in different regions within the specific area. One has to look the trend and pathof the property market in the area where he want to set up the project. Amarketability study tries to create a market area demand model based on availabledemographic information and the application of common sense to develop a pictureof the current and future market area trends that may effect demand.

2. Feasibility Study:

Feasibility Study typically involves testing geographic locationsfor a real estate development project, and usually involves packages of realestate land. Developers often conduct feasibility studies to determine the best

location within a jurisdiction, and to test alternative land uses for givenpackages. Jurisdictions often require developers to complete feasibility studiesbefore they will approve a permit application for retail, commercial, industrial,manufacturing, housing, office or mixed-use project. Market Feasibility takesinto account the importance of the business in the selected area. Could theproject be built?, Can the site support a building structure that is planned?, etc.should be check out.

Market

Study

Feasibility

StudyProperty

IdentificationTitle

Check/Legal

Work

Property

acquisitionPlanning &

Designing

BudgetingRegulatoryApprovals

Project Mgt. /

Construction

Marketing

PlansSelling, Leasing

& Hand over

10.360* DegreeFirms significant Functions pertaining to Construction


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3.Property Identification:

Property identification refers to the type of project which the builderhas to plan. It mean whether put residential or row house or to put specificcommercial project looking at the locations and demand for the market. Propertyidentification generally is driven by demand of type of property in the market.

4.Title clear/Legal work:

Title clear is the phrase used to state that the owner of real propertyowns it free and clear of encumbrances. In a more limited sense, it is used tostate that, although the owner does not own clear title, it is nevertheless withinthe power of the owner to convey clear title. For example, a property may beencumbered by a mortgage. This encumbrance means that no one has clear titleto the property. However, standard terms in a mortgage require the mortgage

holder to release the mortgage if a certain amount of money is paid. Therefore,a buyer with enough money to satisfy both the mortgage and the current ownercan get clear title.

5. Property Acquisition:

Generally, property acquisition refers to a person or other entityacquiring title to real property by a deed. A deed is the legal instrument usedto transfer ownership in real estate. Real property can also be acquired byinheritance and by a court order.

6.Planning & Designing of Project:Planning and designing is carried out only after finishing the above

legal works. It is concerned with the proper plans and the design of the projectthat the developer is going to construct. Here, builder can approach architects todevelop plan and design as per the requirements of builder.

7. Budgeting:This point is also important to be considered by a builder. The budget

of the real estate project should be optimal as per the plan and designs of thestructure. Budgeting needs to analyze the size of the projects.

8. Regulatory Approval:After the plans and design of the projects, it needs to be submitted the

same at the concerned govt. authority (Municipal Corp./Municipality) forfurther verifications and approval for the project. If authority finds no


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objections, then after they can arrive at decision for approval and sanction ofproject.

9. Project Mgt./Construction:If government regulatory approvals and project get sanctioned by

authority, then after builder can take step further to start initial work ofconstruction. A project management team also has to form for various aspectsof the project of residential or commercial. At regular interval of time, govt.executives checks the work whether is going as per the criteria.

10.Marketing Plan:While developer put the marketing plan for the project he has put. On

the bases of demand for the housing and location. As a promotional efforts andmarketing for the project Hoardings, newspaper ads. attractive schemes, agent/

broker approach has to be followed.

11.Selling, Leasing and Handover:Builder may sell the entire project to other party, or he may sell the

project on leasing bases. Another option he may adopt is he can hand over tothe party who want to handle this project.

Below are some of the main points that were made along the way:


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Real estate investments fall into one of the four following categories: private

equity, public equity, private debt and public debt. Your choice of which one to

invest in depends on the type of exposure you are seeking for your portfolio.

You can invest in either income-producing properties or non-income-producing

properties. Any leased property is income producing, and vacant properties are

non-income producing. You can still earn a capital return on a non-income

producing property, just as you would on an investment in a home. .

Real estate can produce income (like a bond) and appreciate.

Real estate is tangible, so it requires ongoing management. On the other hand, you

also have an increased ability to influence the performance of a single investment

as compared to other asset classes.

Some of the benefits of adding real estate to a portfolio include: diversification,

yield enhancement, risk reduction and inflation-hedging capabilities. However, real

estate also has high transaction costs, can be difficult to acquire and it is

challenging to measure its relative performance.

Buying real estate requires substantial due diligence to ensure that you're getting

what you expect after you close.

The way to determine the value of your property (other than actually selling it) is

to have it appraised by an accredited appraiser.

11.Buying your first home? Some Specifics That You Should KnowPaying rent month after month can be very exhausting business. So one fine day, you wake up

with the desire to own yourhometo get relieved from the whole rent house business. Despite the

strong need, umpteen thoughts run in your mind before you take the big leap.

After all, the thousands of questions that pop up in your mind are only too natural if is your first

time in home investment. You might fear not to mess up and for everything to proceed the right
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way. We assure you, it is completely normal to feel that way! You are probably making the most

importantfinancial investmentof your life and spending too much from your pocket to make a

hurry burry decision.

When you feel informed about the wholehomebuying process, your confidence and sense of what

you want and whom you should approach to get it all done, will obviously shoot up. Lucky for you,

you are in right hands. Lets get started to help you buy your first home!

Are You Cut For Buying Your Own Home?

Generally, before making a homeinvestment, people go through a phase as there are lots of

important decisions to be made. Anxiety and fear might tow you for quite some time. That is why

it is important to analyze and rationalize the whole act before taking any quick decision. Owning

a home, can be easy for one, a struggle for some and a totally impossible feat for others. It is

sensible to think it all out and see where you stand before you have already made the big leap and

find yourself in a fix.

Renting vs. Buying: Sometimes, you might feel that renting is a better option compared

to buying a house, as it has its setbacks.

Prospects Of Buying: While there may be a few drawbacks in making a home investment,it is not without its benefits. It is important that you realize and acknowledge its good side

when you make the decision to move forward with the plan and keep in mind the same

when you come cross gray areas in the process of buying a home.

Fine Tune Your Financial Planning

Sit and work out the budget and the resources in hand. Set aside a down payment and view all the

loan programs that are available for the purpose. When you have all the figures in hand, you will

get a clear picture on how much you can afford and what it will cost to make theinvestment.

Get A Free Credit Report: It is important that your credit is free of any debts. If you do

have unpaid loan balances, try to get it all cleared before going for home buying.

Find A Lender: Begin with your own financial institution and then later check on mortgage

brokers who are willing to lend you loan at reasonable interests. Compare the prices and

opt for the plan that not only best suits your requirements but one you understand well as

well.

Fix Your down Payment: The higher your down payment, the lower your mortgage will

be. To avoid being taxed with heavy interests, maximize your down payment as much as

possible.

Consider FHA Loans:Its worth considering this option, as it has reasonable down

payment requirements and lets thesellersto pay either part or even all of your costs.

Acquire A Pre-approval Letter: When you approach the seller with a pre-approval letter

for loan purposes, you have better chances during negotiation.Choose A Real Estate Agent To Assist You Home Buying

You might think why you even need areal estateagent when everything is accessible online itself.

One local market varies from the other in more ways than one and a good agent will be able to

guide you in making the right decision with his knowledge and expertise.

Why Hire an Agent? An agent who has been in the field for quite some time would have

gathered vast knowledge about real estate. He or she will be in a better position to help
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you avoid making mistakes such as choosing the wrongproperty or paying more than its

worth.

Find a Real Estate Agent: Take the help of your friends and relatives in this process. A

referral is always a good choice, as they are being recommended by someone who is

satisfied with their work. But, before starting to work with that person, make sure that

you are comfortable with the suggested person too.

Play By The Rules With Your Agent:It doesnt mean that you should follow the

commands of your agent. After all, he is there to cater to your requirements. But there

are certain protocols that you should follow and make sure that you do not say the wrong

things in your desperation to get a good home soon.

Prevent Committing Home Buying Mistakes

As always, the best way to learn this is by getting an insight from the mistakes made by others.

The best defense that you can charm to be on the safer side is by buying a home in the most

desirable location.

Tips For First-Time Home Buyers : Begin with online property hunt and do not go for

print because, most of the reputed ones wont be advertised in newspaper Take A Look At The Homes For Sale: You should take a good look at the houses that are

put for sale in person and ask yourreal estateagent to do the same before showing

thepropertyto you. Also, make a tour only when the parameters suit your requirements.

Draft A Safe Contract: If you want to protect and safeguard your hard earned money,

then you should never make the blunder of writing contingencies into your crucial

contract.

Negotiate Like A Pro

Who said you cannot negotiate when it comes to home buying?Homebuying may not be like car

buying, but it is never wrong to try your luck by negotiating to strike a deal with a good price.

Negotiating Tips: There are many factors to consider in home buying. Price is always not

the major criterion. So, when you see a good property that suits your every requirement

but is slightly more than your planned budget, then quote your offer. If thesellersare

unwilling to budge to your offer, then think in terms of the value that is attached to the

property. If you think that you can manage their quotation and feel that the propertyis

worth the take, then go for it.

Facing Multiple Offers: It is a common scenario to be faced with multiple offers. But take

a cautious step and analyze every offer before finalizing one. Make sure that they satisfy

you completely and add good value to your investment.

Never Fail To Do a Home Inspection And Read Disclosures

Home inspection is a very vital procedure you need to follow before making a purchase. Thedisclosures that you receive should be governed by the law, which differs from state to state.

What is Home Inspection? It is a legal procedure carried out by authorities to make sure

that thehouseis in good condition from foundation to roof. A word of go from authorized

personals will add a sense a security and value to your investment.

Material Facts:Sellers often do not notifybuyerson the defects in the property. It is in

your hands to make sure that you are not kept in the dark.
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Conduct A Final Walk-Through: Before closing theproperty, do a final walk-through to

check whether it is in the same state as it was when you agreed to buy it.

Final Step In Closing Your Home

Usually, 30 to 60 days after accepting your offer, transactions will be closed. Do not forget to

book the transportation to move your things earlier, as many people tend to make a move at the

end of the month.

Home Insurance: Look for the insurance policies that offer you the best rates and choose

wisely. Usually, the firm insuring your automobiles will close the best deal for your home

as well.Title Insurance Policy: Individuals often overlook taking a title policy. On the other hand, thismode of policy is the cheapest form of policy available and you also get to make a premiumpayment only once.

12.Inching Trend Towards Luxury LivingThe changing real estate trends is again witnessing a phenomenal change withluxury

homesmaking a comeback into the market. India is one of the fastest growing countries withhigh net worth individuals and their investment portfolio totals upto 40% in the realty

market.

Luxury housing projects has become the in-trend of the market with increasing number of people

opting for luxury home, ranging between Rs. 1 crore and going upto Rs. 15 crore. To name a few

of the top notch premium projects, Raheja Ravanata, Oberoi Exquisite, Lodha Aurum Grade, Orris

Aster Court, Lodha Fiornerza are some of the most sought after luxury homes, some ready to

occupy and others under construction.GurgaonandNoidaare the hub for such projects

andNCRis already lined up with dozens of luxury and ultra luxury projects. So, the question that

is tossed now is what has happened to theaffordable homes? Industrial experts explain the

scenario saying Whileluxury homeshave caught the attention of people from different sectors,this may not be the trend forever. Affordable projects may have slowed down for now, but the

situation may reverse anytime. Also, they attribute the rise in luxury housing projects to the

over supply in the premium market during the 2008 economic drop down.

Samir Jasuja, Managing Director at Pr PropEquity, a real estate analytical firm, has quoted that,

Luxury housingprojects are enjoying a new look trying out different product offerings from

Singapore and American styledapartments to exotic luxury residencies. This has brought the

crowd of investors into the luxury market who were looking outside the country for such good

options. Even with inflated interest rates, this explains why the luxury properties are increasing

in theNCRregion.

Even with the dip in economy, the end users in these regions were least affected with the pricingof luxury housing year on year. However, individuals opting foraffordable home projectsin these

regions were facing a stiff situation as the housing supply fell over by 50% and the price- sensitive

end users were also impacted by the hiked interest rates, increased pricing of such projects

withdevelopersunwilling to lower the rates. However, the prospect for luxury housing is on the

increasing end. India, with a fast growth rate by over 20% and encompassing large and increasing

number of high end users, have their investment portfolio comprising over 40% in the real estate

market. NRIs are also heeding the market in large numbers with the depreciated rupee value.
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Prabhatam Group has branched into the real estate market and is focused to provide luxury homes

andstudio apartmentsto NRIs and HNIs across northern part of India such asIndore, Bhopal,

Amritsar etc., Dinesh Gupta, acting chairman of Prabhatam Group attributes the increase in luxury

homes to the rapid urbanization. He says People today who form the ring of urban families have

an increasing need to indulge and live a comfortable and luxurious life with complete global

amenities enjoyed by citizens worldwide He also adds saying, Even Tier I & II cities comprising

of middle class segments are fast moving towardsluxury housing, expanding and living out of their

dream by approaching the HNI segment with disposable incomes.

It is not surprising to seereal estate developers not only show extra interest in the luxury

segment, but also take the next step forward to satisfy new set of clientele by establishing ultra-

luxury homes. Ultra-luxury homesare structured in the villa format and are positioned in leisure

destinations such as Shimla, Goa, Kerala, Lonavala and others. The prices may range from Rs 5-10

crore and also extend upto Rs 15 crore with some property, says Patel of E&Y .

Patel continues saying, The housing projects are now witnessing a shift from golf-based to

destination-based, wellness-based, spa-based and other themes to let the residents enjoy endless

amenities within their vicinity. The upper crust clients increasingly opt for the twovillaformatswith their water-based and hill-based location. Thewater-based projectsusually has access to an

USP with yacht services or even a private jetty for the entertainment of the residents in the

enclave. The current and the most upcoming trend is to focus on exclusivity, where the

developers are now concentrating to expand and go beyond an independent villa to an enclave

format that brings in the exclusivity quotient to perfection. Here the residents are not only

equipped with all the global amenities but are also gifted with the the very much demanded

privacy. In such a project that resembles housing in Bali, Kood etc, the key is to limit the enclave

with 25 to 50 units and bestow the inhabitants with good physical and visual space

Real estate developersare keen to bring in the element of global luxury into their projects to the

point that even those who were essentially catering to the Tier I and II cities are drawing out tie-ups with property developers and architects on a global level. Indian developers who are on par

with world class building and architectural trends such as Oberoi Realty, Rohan Lifescapes and

others are associating with global brands to line up the best of the products and services

inapartmentandcondominiumspace itself.Delhi-based Prabhatam Group is one very apt example

to illustrate the changing real estate trends. Their projects are modeled to create a finesse in

luxury living by constructing group housing and residential condominium clubbing with

international architects and establish the true meaning of world class meaning.

Gupta says, All our projects are designed with world class features that are unparalleled in both

price and style. For instance, Prabhatm Heights, one of our projects atAmritsarpromises a new

trend inluxury real estatewith all high tech, ultra modern facilities such as sixth sense electronicfixtures and a complete oxygen rich environment to help the residents live a complete and healthy

life .Property buyerstoday make investments with not just the specifications in mind. Lot of

thought is given to the fine details such as location, ambiance before an investment is made.

AMumbai-based DB realty group director, N Shridhar, developingpremium projectslikes Orchid

Woods, Orchid Heights, states that, Countrys changing demographics and rising aspirations has

shot up the demand for luxury housing. According to analytical reports, the annual sales will go

over 30% for the semi-luxury and luxury homes.
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Similar view is quoted by Arjun Puri, Managing Director of Puri Constructions, after launching

theirluxury housing project, Diplomatic Greens. We always move towards the best and the

same applies to our lifestyle as well. People today want the better and the best in everything.

What was indulged as luxury in the past years has now become a necessity. To sum my opinion,

this trend will last and the growth prospect for such luxury housing projects will only be on the

increasing graph To grab a quick glance on the changing real estate trends

13.Tips To Make The Right Property Investment For NRIsInvestmentalways kindles considerable thought to all the investors as a huge amount is involved in

the process. Nevertheless, todays Indian real estate market proves to show good signs to the

property investors, favoring them in their big endeavor by all means. However constructing a

house is no easy feat. To bring the vision of adream homeinto a living reality is one of the most

toughest creative jobs ever. However, here we are going to discuss the hurdles faced by the NRI

Investors. Here it goes..

Worry Lines For the NRIsImagine: An NRI in overseas is planning to make areal estate venture. When the hardships are

umpteen for a localite, imagine the crisis faced by an NRI who does not have any physical

proximity with the property in question. The distance and the absence during the entire tenure of

construction leaves the person in dark without being able to conduct physical inspection on a

regular basis.

But Every problem has a solution and all you have to do is look in the right direction and work

out things the right way. Here is to how

Do not make a hurry burry decision and take time! Otherwise it might prove to be costly

to you at the end. You should check 100properties, shortlist 20 from the lot after deep

scrutiny, negotiate 10 properties with the sellers and pick out the one that proves to be

the best deal.

Make sure that you are affiliating with a professional builder. It is important that you

make a thorough research and conduct a lot of background check to affirm that the

builder is reliable and a reputable name in the industry.

It is advisable that you make a personal visit to the site before making aninvestment. It

is not just for the huge amount in place but revising the option might prove costly as well.

If you are unable to make a personal visit, request a trusted friend or relative to do the

favor in your place.

Acquiring ahousing loanmeans that your money is in safe hands. The money will be

released only in stages and also the bank will have short-listed builders for whom loans are

pre-approved. Banks with their security policy and other legal norms are quite stringent to

approve loans for builders with no track record. With a home loan, your money will be

safe and you will have areputed builderto bring your dream home to life.

Make sure that there is good water and electricity supply, sewage, garbage disposals and

all the other required amenities are met as well at the end of the building process.
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If you have some query, never hesitate to ask. You are not going to be looked down for

poring out your doubts and concerns. In fact an intelligent person, will make sure that he/

she enquire it all out right away. So go on. Fire your question to the builder right away!

Ensure that all the legal papers are in hand and your home is approved and covered

legally from all ends.

Now if constructing with a good crew is one problem, managing the asset is altogether a

different issue to handle for the NRIs. Your job is not over with the house warming

ceremony, in fact there is more. You will have to find a way to keep it in good order for

years to come. There are a few professional real estate management firms that might

come in handy for the purpose. Some good willed relatives, friends and even neighbors

might do the good dead for you. Check out the options available and ensure that your

home is tended well and gets the attention it deserves.

Kudos For Building A Great Home To All Our Dear NRIs!

CURRENT SCENARIO:

WHAT BMC LEARNT FROM MALARIASURVEY326 realty projects in city put on holdPoor demand and new building norms have forced developers to freeze

construction at upcoming projects

More than 320 real estate projects in the city, both commercial and residential, have been puton hold, a recent survey by the civic authority has revealedyet another sign that the industryis in a funk.

Majority of these projects, around 202, are in the western suburbs, with Goregaon (48),Bandra (36) and Andheri (36) topping the list.

Realty experts and industry members Mirror spoke to said that work at the sites had beenhalted because of mostly two factors: dwindling property demand and recent changes inconstruction norms, especially FSI guidelines.

Developers, they said, were unlikely to lift the construction freeze anytime soon unlessproperty sales pick up, infusing capital into the market.

The list of 326 stalled projects was compiled by the BMC during a recent survey of mosquito-breeding sites in the city. It comes weeks after real estate rating firm and research Liases Forasestimated that there are more than 88,000 unsold flats in the Mumbai Metropolitan Region.

The citys realty industry is known for defying market trends and soundest of economic logic.

The latest figures, however, may be the clearest sign of the industry being under the weather.Apart from the economic slowdown and the resulting sluggish demand, there are other

factors that have forced developers to halt work, Sunil Mantri, the vice-president of NationalReal Estate Development Council (NAREDCO). Some of the plots are in dispute. In case of

redevelopment schemes, there are disagreements between builders and tenants.Some developers have fallen out with their business partners, leading to suspension of under-

construction projects.Changes made to Development Control Rules (DCR) in October last year is also a major


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reason. Projects that were approved and launched before October have become unviablebecause of new norms, Mantri said.

The old DCR allowed builders to exclude constructions such balconies and ducts from FSI(floor space index). The new norms, however, require them to pay a premium for availing higherFSI, which is the ratio of the built-up area of a building to the size of its plot.

While identifying mosquitobreeding sites, the BMC listed 2,662 approved construction sites.Of these, work is underway at 2,336 locations.An officer from the civic bodys building proposal department said that maintaining accurate

data on stalled projects was a difficult task. This is because developers never inform the BMC

when they halt a project, he said.Meanwhile, the poor demand for housing units extends to even highend homes. According to a

recent estimate, more than half of Mumbais luxury apartments, ready and under construction,

have no takers. The gloom in the market is in sync with the downturn across the country.

The list of 326 stalled projects was compiled by the civic authority during a recent survey ofmosquito-breeding sites in the city


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