How NOT to get cheated by builder and brokers

We all have targets in our job, so does the Builders and Brokers. It’s their job to ensure you purchase the house. Sometimes this target is achieved by hook or by crook.

Before you can call a place home, you have to tread a long road that involves detailed planning and years of savings. A greedy real estate agent or marketing agent in builder office is enough to give you sleepless nights. When in builder’s office, don’t focus on what marketing guys have to say, focus on what document reads.

We would take you through some of things you should be careful about and ask your builder or brokers when purchasing a house. Please refer to the terminologies here : Useful real estate terminologies


Ask for the loading factors: When you purchase a house, what is being sold to you is the Super Area. However built up area is what you basically own in an apartment, rest of it goes in the undivided share also known as common area. Loading factor is the percentage of Super Area minus the built up area. For example, for a 1500 sq ft apartment, with a loading of 30%, what you actually get is 1050 sq ft of usable area. Loading factor in builder societies ranges from 20% – 40% and sometime even higher.

So, lower the loading factor, better the carpet area.  One must ask for the loading factor from developer. If developer is reluctant in sharing the same, do the math yourself. Carper area can easily be achieved by multiplying the dimensions of the apartment. These dimensions can be obtained from Floor Plan.

Ask for architectural copy of Floor Plans: Let’s face it, artistic images of Floor Plans and Building Plan looks super impressive. But they are the devils. Instead of going for brochures, ask for the architectural copy of the plans. This would give you the fair idea of orientation of the building as well as the facing of the apartment. This also gives you a chance to verify the Vastu factor if you care about it.

Verify the Layout/Building Plans: Once again, throw away the artistic layout plan and look at the Approved layout plans only. It is a common practice to sell the project by showing artistic layout plan and later on submit the modified/updated layout plan to the authorities for approval. Walk away if the layout plan is not even approved or the builder’s office refuses to show one. Look for areas marked as “Future Development”. Avoid buildings near to such embarked areas as builder may come up with some sort future development that you may not like.

Look at the project and land approvals:  It is a common practice in India to launch the project even before the project is approved by local authorities. In some cases builders do not even own the land. Projects are sold on mere application for approval. Local development authorities may or may not approve the building plan as being sold by developer. This delays the projects and sometime projects are even scrapped. You surely do not want your money to be stuck in such unapproved projects.

Ask for proof of inventory: Before you book the apartment, ask the developer to give in writing that the apartment unit you are choosing is not allotted to someone else and is available. Builder usually takes booking through multiple channel partners and there are good chances that someone else has already requested for the same apartment. It may not be updated in the system. However, all the cases are nit genuine, brokers and marketing people do this deliberately. Once you cheque is cleared, they try to sell you units that are not in demand. One must ensure booking form has a full refund condition for any such event.

Verify the Booking Form: Do not let your broker fill the booking form. Fill it yourself and ensure apartment number and building number is clearly mentioned in block letters on the form. Brokers are casual and careless about name spellings. Sometimes they deliberately promise you units that may not be available with builder. It is a nexus as builder take no responsibility of any mistake committed by brokers. Ask your brokers to facilitate the booking directly in builder’s office and take the duly stamped receiving from builder.

Avoid Credit Notes: In this competitive environment brokers try to lure buyers by offering certain percentage of their commission. One should avoid getting into this practices and ask the brokers to get the entire discount adjusted on the booking form only.

Payment Plans: While making the booking ensure you get duly stamped copy of payment plan. This should contains total consideration of apartment, details of BSP and other charges.

Book directly with Builder: If there is no difference in builder’s booking price and broker’s quote, avoid involving any third party and directly book with builder. In an event of something going wrong, builder and brokers pass buck and no one is accountable.

Read the Fine Print of agreements: Usually the fraud starts right from the booking form and it goes all the way till signing the builder buyer agreement (BBA). Not only these agreements and their conditions are one sided, some of them contains clauses to ensure you have nowhere to do. While it is difficult to covers all misdeeds of BBA in this article, one must watch out for Delay penalty, Delivery dates, Escalation charges, floor plans and layout plans attached.

Sample Flats: These a a BIG SCAM. Sample flats are built by developers by developers to create a false Euphoria. It’s a trap that many buyers falls in. It is most likely that you are not going to get what is being shown in the sample flats. Room dimensions and ceiling height are more than actual flat, fitting and fixture are of finest quality and same shall not be given to the buyers.

Specifications: Unless this is supplied with your Agreement, there are chances you may not get even if it is in the Brochures. Ensure power backup load and main power load are clearing mentioned. Quantity and brand of the specification must be captured in the agreement.

Facilities and amenities: Builder never mentions facilities and marketed amenities in agreements. Most of the time they are not even delivered as promised. One should make informed decision and focus on core requirements rather than getting impressed with carefully photoshop images of badminton courts and swimming pools.

Do not rely on Brochures: These are marketing material carefully designed to lure buyers purchase

Verify Home Loan claims: Both marketing team and brokers mislead buyers on approvals from banks and housing finance companies.  If you require home loan to fund the initial payments to builder, one must check for approval documents and verify the claim from banks too.

The Logical Buyer suggest that buyer should not go by sales pitch but should go by the documents.

One thought on “How NOT to get cheated by builder and brokers

  • October 20, 2015 at 9:56 am

    That’s really great tips for one who is dealing for first time. This post i will say is creating awareness for the people about the property buying.

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