Do’s and Don’ts of Real Estate
1 I Colliers International
Analyse your finances to make the correct assessment of
the amount of money that you can afford to invest in real
estate. Often this is ignored.
Get a pre-approved loan especially if you are looking to
finance part of the investment with a bank loan.
Understand the process and restrictions in case you are
buying property from the sale proceed of another property
Overestimate the amount of money that you can set aside
for investing in real estate.
Overestimate the rental income that can be generated from
the real estate asset (more so if considering netting off
mortgage payments with rental income). Renting out a real
estate asset may be time consuming and may not yield the
anticipated income, as it is a function of the market which
may change over time.
Thoroughly research the property location, market
conditions, developer’s background in terms of quality of
previous projects, ability to deliver on time and resale value
of past developments. Compare shortlisted projects with
similar properties in the neighbourhood.
If investing under construction residential property, it may
be more prudent to invest in those projects that are in an
early stage of construction. This is riskier than investing in
ready property, but it may likely provide a higher capital
Try to save money by not hiring professionals, as any
mistake can cost a lot in the long term. Do hire
professionals to get the best advice, however, check the
credentials of your real estate advisors.
Avoid bank's criteria for approving property in case you are
planning to take a home loan.
Check with the developer about the status of all approvals
and licenses, development scheme, layout plans and
Calculate the total cost of the property by adding basic cost,
brokerage fees, finance charges and all statutory costs
such as stamp duty and registration.
Select the payment plan from Down Payment, Flexi
Payment, Construction Linked Plan and No EMI Plan, as to
which is best suited to your financial plans and will yield
the highest returns.
Buy a property without proper legal due diligence.
Focus heavily on financial costs; take other factors into
consideration like locality, distance from major commercial
and retail hubs etc.
Assessment of Financing
Available for Investment11
Due Diligence and
Identifying the Property
Prior to signing the Builder - Buyer Agreement, check all of
the following terms and conditions. Pay due heed to:
Make decisions based on emotional impulses while
purchasing a property.
Trust everything that the advertisement or promotion
Buy a property without proper inspections / visits.
Check all amenities and features like doors, windows,
paint, walls, drainage, leakage, switches, plug points and
safety measures. Bring any deficiencies to the attention of
the developer and get the necessary repairs done.
Completely rely on anybody. Check the area, amenities etc.
promised and all documents yourself.
Forget to obtain a no objection certificate from bank, if the
property is mortgage with the bank.
Purchasing the Asset
Check for lock-in period with developer, if any, for sale of
Carpet area and super area of the apartment;
Penalty clause in case of delay;
In the event of non-completion of the project,
understand the refund process and interest rate
Builder - Buyer Agreement
List of Amenities
Layout plan of the propertyunderstand the refund
Copy of the project’s drawings
Receipts for all of the paymentso
Flooring and bathroom fittings
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