Festival Season: The Perfect Time to Buy a Property

India is a land of festivals and every festival celebrated here has a mythological story connected to it. There is a certain novelty and auspiciousness attached to the festivals celebrated here. Every family starts something new or makes a new investment during festivals. Likewise, merchants and business brands also host the biggest and craziest deals to please their customers and boost their sales.

For Indians, buying a house is as special as celebrating a festival and hence they always look forward for an auspicious moment, when he/she can buy his/her property. There is a common belief that there should be no bad omens during this period and process of buying their property and thus people take precautions like scheduling the deal during a ‘shubhmuhurat’. Given below are a few important and auspicious muhurats to look forward in 2018:

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1. Navratri (10th October to 18th October 2018): As per Hindu accreditations, finalization of any purchase of a property should be done at an auspicious time also known as “ShubhMuhurta.” One highly auspicious time which is quite prevalent among the Hindu community is Navratri. Any Puja, Mantra-Anushthan, Muhurta or New Venture performed during this period is considered magnanimously auspicious than any other day.

2. Dussehra (19th October): Dussehra or Vijayadashmi is celebrated with great enthusiasm as it symbolizes new beginnings. The day of Vijayadashmi is believed to bring in Vijay, that is a victory. Dussehra is considered by many people as an auspicious day to buy or commence a new event or a project. Investing in any new project or owning a property on this day is considered lucky.

3. Dhanteras (5th November 2018): Dhanteras or Dhantrayodashi is observed two days before Diwali in parts of India. The word ‘Dhan’ means Wealth and ‘Teras’ means 13th day as per Hindu calendar. Goddess Lakshmi is worshiped to provide prosperity and well-being. Dhanteras holds special significance for the business community due to the customary purchases of precious metals, especially gold, on this day. It is considered auspicious to purchase immovable property on this day.

4. Diwali (7th November 2018): Diwali, the festival of light, is considered to be an auspicious period to buy property. Diwali is not only the start of the New Year but also the day when Lakshmi, the goddess of wealth is worshiped. This day is considered the perfect occasion to take big decisions and purchase new property.
While any of these auspicious days is a good time to purchase a property, it is certainly not reason enough to seal the deal. Many real estate builders may roll out offers like discounts, freebies, and other add-ons to attract potential home buyers. However, it is advisable to undertake in-depth research before taking up such offers.

Did you know a festival season is likewise an excellent time to invest in property?
Apart from being auspicious, there are different factors that you need to think about buying property throughout this time. Builders and developers create ingenious offers and payment strategies, while banks likewise release different loans to raise the interest of purchasers.

This year, you may see some new offers in real estate, thanks to the implementation of the Real Estate (Regulation and Development) Act (RERA), 2016 as well as Goods and Services Tax (GST). Before you are lured by the realty offers, it is advisable that you understand these offers. Here’s a look at the offers:

1. Ready to move in:
Till a few years back, developers used to launch new housing projects during the festival period; ready-to-move-in apartments were not offered. According to RERA, from August 2017 onwards, only those properties can be sold or advertised that are registered under the Act. But those properties that have an Occupation Certificate (OC) or have applied for it, are excluded from this mandatory registration. OC is given to properties that are ready to move in.

Developers are also keen to clear their inventory. Homebuyers, too, prefer ready houses and realty portals are focusing on such demand. If you are keen to buy a house, look at ready units even if they cost a little more because construction delays are a chronic problem. Plus, ready properties give a clearer idea of what you are buying in terms of factors such as space, location, and view.

2. GST-free apartment—save 12%:
Ready-to-move-in options not only avoid the risk of delay due to construction risk and provide immediate possession, they can also help you save on taxes—at least that’s what developers are advertising since GST (12%) is applicable only on under-construction properties. Currently, several developers claim that their apartment prices exclude GST. While it may be true in some cases, buyers should read the fine print. Only those properties that have an OC or completion certificate (CC) are considered complete and do not attract GST. Ask the developer for these as proofs.

3. Online sales:
Many developers are taking the online route. For instance, last year Puravankara Ltd, a Bengaluru-based real estate developer, held an online festival sale for 3 days (15-17 September 2017) during which, it says, properties were offered at lowest price points. Real estate portals are also doing the same.

4. Subvention, Part payment:
Apart from the new offers, subvention and part-payment schemes continue from earlier years. Under a subvention scheme, the initial payment, or down payment, is deliberately kept low. Under a part-payment scheme, a part (usually 10-30%) has to be paid initially, and the remaining is typically divided into two parts—one is scheduled halfway through construction and another at the time of possession.

Subvention schemes may or may not reduce the cost. Be careful with subvention schemes. If the developer delays the project, you will have to bear a higher loan EMI, while also paying rent for your existing accommodation. This problem may not be in the scenario now as RERA have come under action.

5. Other offers and discounts:
Among the most common offers this season are free air conditioners in all rooms, modular kitchens, 1-year free maintenance, assured rent for 1-2 years, and no floor rise charges etc.

While affordable housing projects are seeing some interest from buyers, there are few takers in the luxury segment. So, developers of luxury projects, particularly, are offering heavy discounts since sales are sluggish in this segment. Some are offering high-end cars for those who book penthouses, and luxury cars to those who book villas. Some are also offering 12 months’ assured rent.

6. Cash discounts:
Lump sum cash discounts work but make sure the developer has not increased the base prices in last 6-12 months. You should keep a check if the cost is reduced by 8-10% then you should go for cash discount offers.

What should you do?
Look for a property that suits your requirements. Freebies and offers should be incidental to the decision. Look at the project’s location, features and amenities, quality of construction, and the quoted price; and compare these with other options in the vicinity. If the project is at par with peers on all these counts, then offers and freebies make sense. The merits of these offers must be weighed against the more intrinsic values of location, developer’s delivery track record and reputation for quality.
Ideally, one should evaluate all freebies and offers in terms of money. Instead of accepting these, negotiate for cash discounts.

Currently, it is a buyers’ market and some of these schemes will not only benefit buyers but also developers who are looking to improve sales—post demonetization and RERA. Take the help of a Real Estate expert like Brick Asset Pvt Ltd. to check the papers of the property.

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