Recently, I began looking into the possibility of buying an apartment. The majority of the local print ads, at least in percentage of ad space, seem to be taken up by a horde of builders. I did my web searches, but wasn't able to find much guidance. "Customer testimonials", as everyone should know, are worth less than the virtual paper they are printed on, and can be bought for less than a hundred rupees each, unless they come from people you can visit and talk with. I narrowed in on one builder to do some preliminary searching. When you call, they are unwilling to disclose much, and insist that you visit them in person, or that they come to see you. Being somewhat jealous of my privacy, I preferred to visit them.
The first thing they want you to do is fill out an "inquiry form", which is rather too detailed for my liking, and of course disregards my reluctance to let them visit me, by requiring various personal details. Fact is, I'd much rather "window shop" first, then make a few selections to seriously go to the next step. What I wanted from my visit was every relevant detail about the project, the location of the project, references that I could check out and so on, without being hounded by salespeople. I managed to get a few more details without disclosing personal information.
It seems that pricing is flexible, but not so much in terms of what you can discount off the asking price, but in terms of how much more it will cost you. The base price, in this case, was virtually bare walls. It didn't include any fixtures, lights, fans, water heater, kitchen vent fan, cabinets or paint. The cost of painting, it was explained to me, could increase depending on what I chose. The price included only primer and the cheapest paint they could find. And there were various other "options", like network wiring, door camera and intercom, shower enclosure, bathroom fixtures(the base price included completely tasteless white fixtures, which they never intend to install, knowing you won't want them), and a few other details. And then there are the indeterminate common charges, which would be decided closer to completion. Altogether, these would bump the price up several lakhs over their initial figure.
Then, there was the matter of payment. They wanted a down payment of 20% of the negotiated price, plus a schedule of payments amounting to 90% of the total 60 days before scheduled delivery. Since I wasn't in the market for a mortgage, I guess they didn't offer me any concessions. I think they do get a kickback from the mortgage company, since they asked my several times if I would go in for a mortgage. I asked about interest on the payments I would be making before delivery, since that was otherwise an interest-free construction loan for them. There would be no interest, they said, since I was getting "low price". While on the subject of low price, I saw an ad in which a particular builder was offering "Dussehra discounts", with a graduated discount which would decline to nothing by January. Many Bangalore residents probably received this as a newspaper insert. This ad claimed to offer an apartment currently "market" priced at Rs. 46 lakhs for about 37 lakhs. The discount disappears after January 2014, when the "market price" is claimed to be 61 lakhs. Yowzer!! That's one helluva hot market!
Finally, there's the question of infrastructure. A lot of builders claim to have features like a creche, a gym, a "home theatre", library, community room or "clubhouse", a "supermarket"(a glorified general store), a swimming pool and so on. Of course, these features, which actually fall short of what they should be, add to the price. As a person who doesn't need or care for these features in an apartment building, I don't want to pay for them. But I guess they would be a selling bonus, if executed properly. But proper execution is the key to value. What I do care for, though, is power, water and proper sewage disposal. Many of the projects in the suburbs, including the one I was looking at, rely on groundwater through a single borewell. They claim a 1 Kw backup power supply per apartment, which is sufficient for lights and fans, and a "sewage treatment plant" which, going by what I have observed elsewhere around Bangalore, means they simply discharge into a neighboring field, water body or rivulet. What happens when the groundwater dries up, or the sewage becomes a health issue or any of a number of other possibilities? The apartment owners are left holding the bag, because they would by then be the "association" fully responsible for these things. These are issues that could cost you big time down the road and, even more importantly, cause you enormous hardship.
So my plan is to provide insights into these issues as I go through my own journey to apartment or villa ownership in or around Bangalore, to help others looking at property purchases here. I want to do a builder-by-builder investigation eventually, so that people have something to go by. I will also include stories from actual owners, once I verify their identities and stories, because that is the ultimate testimony. Of course, this means I won't be posting on any sort of schedule, but I hope to have my first assessments up by January 2014. In the meanwhile, good hunting to all you prospective buyers out there!
The first thing they want you to do is fill out an "inquiry form", which is rather too detailed for my liking, and of course disregards my reluctance to let them visit me, by requiring various personal details. Fact is, I'd much rather "window shop" first, then make a few selections to seriously go to the next step. What I wanted from my visit was every relevant detail about the project, the location of the project, references that I could check out and so on, without being hounded by salespeople. I managed to get a few more details without disclosing personal information.
It seems that pricing is flexible, but not so much in terms of what you can discount off the asking price, but in terms of how much more it will cost you. The base price, in this case, was virtually bare walls. It didn't include any fixtures, lights, fans, water heater, kitchen vent fan, cabinets or paint. The cost of painting, it was explained to me, could increase depending on what I chose. The price included only primer and the cheapest paint they could find. And there were various other "options", like network wiring, door camera and intercom, shower enclosure, bathroom fixtures(the base price included completely tasteless white fixtures, which they never intend to install, knowing you won't want them), and a few other details. And then there are the indeterminate common charges, which would be decided closer to completion. Altogether, these would bump the price up several lakhs over their initial figure.
Then, there was the matter of payment. They wanted a down payment of 20% of the negotiated price, plus a schedule of payments amounting to 90% of the total 60 days before scheduled delivery. Since I wasn't in the market for a mortgage, I guess they didn't offer me any concessions. I think they do get a kickback from the mortgage company, since they asked my several times if I would go in for a mortgage. I asked about interest on the payments I would be making before delivery, since that was otherwise an interest-free construction loan for them. There would be no interest, they said, since I was getting "low price". While on the subject of low price, I saw an ad in which a particular builder was offering "Dussehra discounts", with a graduated discount which would decline to nothing by January. Many Bangalore residents probably received this as a newspaper insert. This ad claimed to offer an apartment currently "market" priced at Rs. 46 lakhs for about 37 lakhs. The discount disappears after January 2014, when the "market price" is claimed to be 61 lakhs. Yowzer!! That's one helluva hot market!
Finally, there's the question of infrastructure. A lot of builders claim to have features like a creche, a gym, a "home theatre", library, community room or "clubhouse", a "supermarket"(a glorified general store), a swimming pool and so on. Of course, these features, which actually fall short of what they should be, add to the price. As a person who doesn't need or care for these features in an apartment building, I don't want to pay for them. But I guess they would be a selling bonus, if executed properly. But proper execution is the key to value. What I do care for, though, is power, water and proper sewage disposal. Many of the projects in the suburbs, including the one I was looking at, rely on groundwater through a single borewell. They claim a 1 Kw backup power supply per apartment, which is sufficient for lights and fans, and a "sewage treatment plant" which, going by what I have observed elsewhere around Bangalore, means they simply discharge into a neighboring field, water body or rivulet. What happens when the groundwater dries up, or the sewage becomes a health issue or any of a number of other possibilities? The apartment owners are left holding the bag, because they would by then be the "association" fully responsible for these things. These are issues that could cost you big time down the road and, even more importantly, cause you enormous hardship.
So my plan is to provide insights into these issues as I go through my own journey to apartment or villa ownership in or around Bangalore, to help others looking at property purchases here. I want to do a builder-by-builder investigation eventually, so that people have something to go by. I will also include stories from actual owners, once I verify their identities and stories, because that is the ultimate testimony. Of course, this means I won't be posting on any sort of schedule, but I hope to have my first assessments up by January 2014. In the meanwhile, good hunting to all you prospective buyers out there!
