All You Need To Know Before You Book A Home In An Under-Construction Project

Real estate developers start marketing their projects to potential home buyers at an early stage. As a result, most homes are sold during pre-launch, launch, and just-launched stages of a project. Booking a home in early stages of a project also gives an advantage of lower prices and discounts to home buyers.

Prices of property in India is at least 20-30 per cent lower during these stages. Moreover, by the time of the delivery of a project, prices of land appreciate, improving capital value of the apartment you have booked.

What comes with booking a flat?

After the launch or announcement of a project in India, you can approach the developer and book an apartment. This is an informal token entry into the project. Developer then specifies the booking amount, which usually can be as low as Rs 10,000, depending on the size of the apartment.

Rights you get with booking a flat

Booking a flat is not a legal agreement, thus, you do not own the apartment as yet. You are simply making an early entry into a project. If you decide to cancel a booking, you will have to either forego the entire amount paid during booking or a part of it, depending on the terms and conditions of the developer.

After booking a flat, you may apply for a loan. The loan, however, will be approved only after an agreement is made with the developer. The loan disbursal will commence in stages. For instance, five per cent of the loan will be given out after the foundation work starts and another 10 per cent when it is completed.

Risks of booking early

Booking a home in an early stage of construction involves risks, too. In some cases, developers might refuse to honour the bookings, if the value of an area appreciates fast during the construction or before possession. To avoid such experiences, book a home at a pre-launch stage with a developer that has a good track record.

Also, building plans and architecture might change in an under-construction project. There could be situations where a developer might have to alter the design and cut down amenities promised earlier. 

(Katya Naidu has been working as a business journalist for the last nine years, and has covered beats across banking, pharma, healthcare, telecom, technology, power, infrastructure, shipping and commodities)