The state of Indian real estate - Buying a new home in India? Read this first

You are out to buy a home in India to start life in. You have busted your back side making money and saving up for it. You have made up your mind on the location and have also identified a few projects that fit the bill. Here are a few things that you might encounter on the journey to own your dream home. It may sound funny to a lot of our readers but for those who have been there, this is the way we sell real estate in India.

1) The soft launch: Every single Indian residential project is 'soft launched' these days. Technical meaning- "Soft launching is the method of launching a missile (such as an anti-tank guided missile) in such a way that the rocket motor ignites outside of the launch tube; the missile is ejected non-explosively. The point is to minimize the risk of damage to the launcher by maintaining a safe distance." - Hehe. See? We are making a point already.

Also - "A soft launch may also refer to the release of a website, hotel, or other product or service to a limited audience. Soft-launching is a method for gathering data on a product's usage and acceptance in the marketplace, before making it generally available as a hard launch or grand opening. Companies may choose a soft launch to test the viability of a product or to fine tune a product before implementing a larger marketing effort." - Wikipedia.

Notice the bold on the words limited audience. Unfortunately, in India it means anyone who has the courage to make that booking payment at a 'Sir, this is a special discounted price only valid for 3 more bookings' rate! What it really means is that the project you are booking into does not have the necessary approvals in place. The banks and financial institutions have not yet approved it for loans. Heck, the developer/ builder is looking at picking up those booking cheques from a 'limited/ privileged' audience to raise the money to get the approvals and pay the media for the actual launch! Established products in sure residential markets do not offer soft launch discounts. Ever. Would you if you were selling something? Be completely sure before you sign out that cheque.

2) The Price Hike: You liked this particular apartment and you want to close the deal with the builder or his agent. But its not really like buying a packet of chips. You need to consult your family, show them around the area and the site. The wife or mom in law have their own views on the floor plans and layout et al. By the time you have them convinced, a week has gone by. You reach the builder's office and want to make the booking payment. WTF? Per square feet prices have gone up by INR 200 from what they were told to you, a week back. If you were buying a 1500 Sq ft apartment, that is a straight extra payout of INR 3 lacs! Remember, price hikes happen unannounced in this part of the world. If you like something, ask the builder for a week or ten days in advance. Communicate your issues and be firm. Use emails if necessary. Never get pressurized by the talk that prices can go up anytime. Its your home and money. Move on if the hike does not suit you. There will be other/ better deals.

3) The 24 hour hold your choice deadline: Builders have become a smart lot. With residential projects in India becoming larger in size, several agents are appointed by a single developer to sell these overwhelming number of homes. Result? You, as a genuine home buyer have between 24 to 48 hours to choose your apartment/ flat, make up your mind, convince the mom in law, take an approval from your best buddy lawyer and pay up as well. If its a hot selling residential project, chances are, that if you take longer than that, someone has already booked that flat. You will then get the motherhood statement from your agent, "I told you sir. But you did not listen to me. We have the same unit on the top floor and the first floor though. Top floor is the best flat in the whole project!" We say, run!

4) The provisional allotment letter: You survived the above 3 points and are at point number 4 now. The builder has acknowledged your booking by issuing you a money receipt but the agent does not get any brokerage from the builder till he has secured the deal with a formal allotment letter and an agreement for sale between the builder and you. So you get a provisional allotment letter. The letter says a lot of things and most of them don't seem to be working in your favour. That is quite alright. We Indian home buyers don't expect much anyway. In reality, the approvals are still stuck despite all the money paid and other financial pressures are mounting on the builder. He has to raise more money. He also promises an expected approvals date. And yeah, once that promised date is over and you have yet not received a copy of the approvals, your agent ignores your calls. The sales manager is always 'in a meeting' till the approvals finally arrive and the next payment from your end is due! Wish we had a solution to that problem. And now the grande finale.

5) Cancellation: The craziest experience one can go through. For numerous reasons like a shift in work place, change of city or a medical emergency, you may have to cancel the deal with the builder. Its unfortunate but its nothing compared to the misery you are about to face to get back your money! When booking a new home in India, understand the cancellation clause that the builder proposes clearly. Remember that bad times can come unannounced and you should have an easy exit option available at all time. 

We are not saying that you will face any or every of the above mentioned points in reality. A lot of people have smooth, uplifting experiences when it comes to home ownership. But then, a lot of people don't! Precaution is a good thing.

Now to go back to that cartoon. That is where a lot of real estate developers in India are headed. The way they are going.