My friend Ajit has been searching his dream house for months now. But he has been facing difficulties in finding one in his budget.Few months ago he almost landed into a trouble when he was about to sign a deal for a house which was offered in his budget. He decided to show it once to his friend who was working with a construction company and came to know of many pitfalls which this small builder has avoided to lure customers like him. Luckily he cancelled the deal at last moment and saved his hard earned money.
But all of us are not so lucky. Many get lured to such houses and face acute problems later. The larger issue is with small builders who develop smaller units and project them as affordable housing. Based on the experience of my friend here are few aspects which you should look at while searching for your dream home:
There are two type of construction you will come across- one is the housing society and other is the small buildings (2-3 floor) with multiple flats. In a housing society most of the amenities are taken care but it’s the small level construction which has the problems. In general you will find a three level floor in a 180- 200 mt plot where 10-13 flat are constructed. While visiting one such building Ajit found the amenities were not up to the mark even though the builder has promised to do so. For 13 families three 1000 liter water tank is surely an indication for future problems. The other major issue was car parking. The builder promised parking for all as the plot was near a park. But looking at the area it was found that you don’t have parking space of more than one car, forget about 13. What if all home owners tomorrow have a car ? Its difficult to assume that there will be no arguments.Contrary to this you have same three floor construction with three houses only. These are much better living place but the cost is unaffordable.
Here comes the big picture. In many areas the map is fixed by the development authority wherein you need to construct the house as per the structure laid out by them.If you make changes then your house will not get registered again which means you cannot sell it further, even if you wish to. Now to construct any house compounding (area on which the house is constructed) has to be approved by the development authority. In many areas this compounding is not present yet but many builders who work at small level are constructing a building with so many flats. What’s disturbing is that you will find the construction beyond the compounding area such as the balconi of 1st floor and above are constructed beyond the actual area of your house. Whenever compounding gets approved this may be regarded as unauthorized and you may be in for trouble. So you need to be very careful while examining the area of the flat and should enquire on compounding details.
This is one of the main areas of concern and we all are hearing the bad news. Few banks employees are indulging in unfair practices and loans are being disbursed even for unauthorized constructions. This is the case even with the smaller units which may be fitting your budget. The loan from a PSU bank is being promised even in such cases. Now it’s wiser to know for all of us that no PSU bank grant a loan on any construction in an area where there is no compounding. So how does this happen. While talking to many people Ajit came to know that on papers the compounding of another construction is shown and you get the loan approved. The catch is that tomorrow if you go for selling your house you won’t be able to do so or will end up paying a hefty penalty. Now who is to be blamed?. It’s then a wiser move to enquire from some PSU banks, possibly known people, whether the bank is granting loan on the house you have finalized. You will get a clear picture which Ajit also got when he did this.
This is prevalent in smaller units now. Few builders are constructing 1-2 flat unauthorized on the top of the floor and the deal is being done in cash but it’s quite cheap. You may get lured to such a house and buy it. But what if tomorrow development authority comes calling you. We all know what’s happening to campa cola society in Mumbai. You will be pouring all your life savings to buy your dream house which will run into trouble. Even if you don’t buy this house but its present in your building it is adding one more family but the basic amenities provided by builder remains the same. Probably that’s where the builder earns money. So if you are the one facing the “buying my first home in MN” dilemma, go in detail about every construction and wiser to avoid buying a house in such building.
There may be other finer points in construction of smaller units which might have been left out above. If you are looking a house in a society such problems may be taken care to a large extent but the situation is gruesome in builder construction at smaller units. The basic amenities like water, parking etc. should be checked in detail and most importantly the legal issues. You may take assistance of a friend, a lawyer, or even enquire from known people in banks to know about it. Your dream house is once in a lifetime decision wherein you may add loan liability and utilize a large chunk of your savings. This will impact your financial situation and you may have to rethink on your future goals. Any mistake here may jeopardize your dream and so it’s wiser to take help of experts to be sure about the house you are buying.
What have been your experience while searching a house?
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