Monday, 21 March 2016

A sigh of relief to the customers- Builders to park almost 70% of the amount collected by the buyers in the separate account which will be used only for the construction of the project

Real Estate in India was in major need of regulation of transactions between the buyers and sellers and there was a need to protect the interest of the customers. India is a nation which has a very high percentage of aspiring home buyers as owing a property is a matter of pride and a dream of everyone. At the same time, the customers of today who are majorly millennials want professionalism, transparency, accountability and efficiency in the home buying and selling process. The good news is that the Bill has laid a very solid foundation for building and implementation of what the consumers want. It was one of the most awaited revolution in the Real Estate market and is finally in action now. With a major agenda of the bill being the protection of the customer’s interest, it will ensure accountability in our sector. It’s a very encouraging move by the government which will positively impact our sector and will bring a peace of mind to the customers whose lifetime savings are at stake. 

We feel that one of the major highlight of the Bill is the parking of 70% of the amount collected by the buyers in the separate account which will be used only for the construction of the project. We have always had issues with the delays in the delivery of the projects. With this 70% of the initial amount going into various costs like the construction of the project, land cost etc, it is assured that the funds of the customer are not diverted to other projects.  The government is trying to ensure that the developers do not fall short of funds and therefore, can work effectively towards timely delivery of the projects to customers. It is ultimately paving the way towards matching the demand and the supply gap in the sector along with bringing back the lost confidence of the customer in real estate. With the registration, timely completion and complete handover of the project becoming mandatory, the buyers will see the project development happening not only papers but in real. The best part is that the bill has positives for buyers, developers as well as brokers and it will collaboratively make it more effective and long-term.

Home sales have slowed down and one of the biggest reasons for that is the delay in the construction of the projects. There were many other provisions in the bill which created a huge buzz all over. Earlier when there was no regulation in the sector, there were no ways to track where the realtor is using the funds collected from their respective clients. With so much to deliver and no authority to look forward to, the developers were always in the news for making the use of money from one project for the completion of some other project. With the mandatory registration and timelines coming in place along with penalties being charged for any delay; everything in real estate will come in place.

India is a very vast country and the cost of project varies from city to city. With the provision that the state government can alter this amount to less than 70% if the need be, is another positive that the Bill brings with itself.  All the realtors will have to maintain their books of accounts and facilitate the possession of all documents that the buyer is entitled to and there can be no false claims regarding any hidden cost/services as everything will have to declared by the developer initially. All these positive sides of the revived version of Real Estate Bill will bring realty sector back on track. Our other major concern is the Single Window Clearance of the projects which is another major factor for the project delays. I am sure that with all the issues being addressed, in future there will be some provision for this as well. 

Friday, 4 March 2016

Myths About Real Estate

There is a lot of misleading and incorrect information that we read and hear about Real Estate as a lot of Real Estate myths are often passed around among the buyers and sellers. Researching of all the information before you make your final decision is very important as it will be helpful in creating your own opinion as it will help you in separating the facts from the fiction. We hear so many good and bad real estate experiences from our friends and relatives that sometimes we start feeling that we know how it works. But in realty, Real Estate is much more than what we read about and we would like to use this platform to burst some real estate MYTHS and the truths behind each of them.

Myth 1 – Real Estate is a high risk investment
Truth: Any investment that may be real estate, shares, mutual funds, gold etc has its own set of risks and rewards. As an investor, before making any investment decision as big as Real Estate, you should we well aware of all the risks and take your decision wisely. In real estate, the best part is that your realtor is there at every step to guide you and thus take calculated risks. As a matter of fact, real estate is an investment that has the capacity of multiplying your profits. A number of factors contribute towards it like the location, property type, government policies, market condition etc. An expert advice is all you need to make this calculative risk. 

Myth 2 – Only metros are the best places to invest in real estate.
Real Estate investment mantra is that you should invest in areas where there is a continuous scope of development in the near future. A smart investor always analyses the market trends, scope and pace of the market development and then identifies the areas that will be the next big thing. Many of the metros and Tier 1 cities have reached a saturation level and there is a very little scope for the market drives to find a place in such already developed areas. In India, a lot of Tier 2 cities are emerging as the future real estate markets. The fact is that when one places reached its peak on all the development counts, the new unexplored markets come into limelight. The emerging localities have an affordable investment bracket at initial time of its development, but they surely see appreciation when the development completes. Also, the fact that the cities shortlisted in the first phase of smart city project, itself is a proof of the high growth potential in Tier 2 cities like Indore, Surat, Kochi etc.  

Myth 3 – Most of the Indian developers are losing focus on the MIG sector and only concentrating on high-end residential projects because it makes better business sense.
Fact: The high end residential projects are in surely in demand as a result of various factors like increasing income levels of individuals, NRI investments in the country etc, but with the focus of the Indian government towards “Housing for All” and “Affordable Housing”; the developers have full focus on this segment as well. In fact, the construction of mid-income housing projects fetches them more demand in terms of units and thus they see a lot of sense in developing them.

Myth 4 – Real Estate market is bad, we must keep away
Fact: At times when the Real Estate market is bad, the best opportunity is that you can enter the market at a very low price and then maximize your returns when the market gets better. When the market is slow, the buyers can make use of lucrative payment plans and policies that the builders offer. But at the same time you have to be very cautious in choosing your developer. Only the developers who have a good past record and credible name in the market should be opted. A real estate professional can be your mentor in such situations.

Myth 5 – Real estate is not for the educated class like us.
Fact: There was a time when Indian real estate was very unorganized and unprofessional, when every third person was a realtor. With the changing time, real estate is moving towards a direction where proper rules and regulations are being introduced in the market. With this the unorganized players are getting vanished from the market and a state has reached where we have polished and educated professionals joining the sector at various levels. All the global players already have their associates certified and trained to be able to move from just being a keeper of the listing to Real Estate Consultants who are able to mentor their customers in their buying/selling decisions.

We all need to understand that every market is unique and real estate market is a magnet for discussion. Everyone loves sharing about their experience about it as it is one of the biggest investments of everyone’s life. Our suggestion to you will be to take an expert consultation before reaching to your final decision. Real Estate now has professionals from different industries joining in to help you understand the myths and facts of this sector.   

Wednesday, 2 March 2016

New Age Broker

The real estate brokers are the cornerstone of the real estate industry in India. They are the front end of the business, the first point of contact for the customer. It is they who hold the pulse of the market. Their importance notwithstanding, the general perception of the real estate broker is one of mistrust. “He is the last guy you can trust,” used to be the common refrain. That was probably true in the 80’s. Times have changed and indeed for the better. Today, the real estate broker has undergone a transformation.

This transformation in the real estate brokerage scene in India has been driven by many factors. First, the opening up of the economy and influx of international companies into India has brought about a major demand turnaround in real estate services. That has in turn translated into demand for real estate brokerage services that have best practices benchmarked with the best in global standards.
Second, the growth of information technology has brought about a revolution in the way business is conducted. Internal business processes could be completely automated to
suit ease of working.
Third, the volumes of transactions and consumer preference and choice demanded that systems be developed so that the customer can search, view and select from the comfort of his home. Inputs for decision making had to be made more comprehensive and at the same time, simple.
Fourth, the relaxations and incentives for investments by the NRI's have to the emergence of a new demand where it was not practically possible for international clients to physically travel and see the properties before making the decision to purchase. This was where IT-enabled solutions came to their rescue.  One additional factor has been that there were quite a few international property consultants who made inroads into the highly disorganized brokerage industry in the country and started providing high quality services, backed by mandates. This made the local broker look up and start to address the growing competition from corporate brokers.
All these factors have led to domestic brokers waking up to the need to get their act together, if they wanted to remain in business.  They started out on a series of measures. Some were simple, such as sprucing up their offices. Websites started mushrooming. Listing properties on the internet became a common practice. They increasingly started resorting to e-marketing. Brokers started streamlining their internal processes.They have next paid attention to the softer side of the game. The attire and the technique of communication started changing. Brokers started attending classes and signed up for a range of courses from personality development to principles and practice of global real estate business. Increasingly, the brokerage industry has witnessed the entry of highly qualified professionals. From the image of the broker we encountered at the beginning of this article, the broker today may well be an engineer, MBA, advocate, retired personnel, chartered accountants among others. Well-educated women too, are choosing this as a career option. These factors are slowly, but surely transforming the real estate brokerage industry. The makeover is for real. The new-age broker has arrived. Most corporate clients can avail the services of international property consultants for whom clients are not really a problem as they came from international referrals. Individual customers, however, had no option but the local untrained broker to deal with. This demand for quality is now being filled by the new-age local brokers, who are home-grown, but equipped and skilled to provide the best in quality standards and customer satisfaction.
The new age broker is there for the discerning customer; he is there to hand-hold, guide, advise and take the customer through the entire process of making a property purchase decision in a transparent, thorough and clean manner. The customer does not really mind paying a fee for good quality service and assurance. The property transaction experience thus becomes an enjoyable one.