Purchasing a home is perhaps one of the most important and biggest financial decisions in a person’s life. You can’t go wrong in investing your hard-earned money. Even a small misconception could end up costing you heavily in the long run. We all tend to be extra cautious while going through this cumbersome process and do everything to make the right choices. And yet, many homebuyers are often misled by myths and misconceptions that float around. M3M India is India's No 1 Real Estate Company in terms of total sales, but this shouldn't stop you from researching before investing.
While a homebuyer might come across a plethora of options and information during their initial level of research, it is up to them to dig deeper and filter facts from myths. This article will help you understand home-buying myths in India.
Myth 1: Every project is covered by RERA
The RERA (Real Estate Regulatory Authority) Act, 2016 has been a relief for several home buyers. Unfortunately, most homebuyers believe that RERA covers all real estate projects and thus, it is safe to skip this basic check. This isn't true. It is vital to check if the project has been covered by RERA or not. RERA only covers projects with 500 square meters or more area or eight or more units. For a project to be RERA approved, the builder needs to register it with the authority.
Myth 2: Under-construction projects are safe now, thanks to RERA
Before RERA was introduced, a large number of builders defaulted on their under-construction projects and left many homebuyers in the lurch. This is the reason why people started opting for ready-to-move-in homes. However, after RERA came into effect, builders have begun completing existing projects instead of starting new ones. This sounds safe but doesn’t mean that one should place their trust in the builder. Even if the project is under construction, always monitor the progress of the work regularly.
Myth 3: Subvention schemes are cherry on the cake
Subvention plans or no-EMI-till-possession plans are some of the latest and best schemes to attract home buyers. Under such schemes, a developer asks home buyers to pay 10-30% of the amount, upfront. Under a three-way agreement between the developer, the buyer, and a bank, the balance is paid by the bank to the developer as a loan. The developer pays the interest on the loan to the bank while the project is under construction. The bank then disburses money to the builder as the construction progresses.
Myth 4: Investing in Tier 1 city is more beneficial
Having a home in a Tier 1 city has its own advantages, substantial rental income is one. Rental income in metros is seen to be higher even if the capital appreciation of the property is lower, but one needs to decide if this is a beneficial trade-off. However, on the flip side, experts believe that Tier 2 and Tier 3 towns offer attractive options too. It is also a proven fact that these areas will develop with time and will ultimately offer return benefits as compared to projects in Tier 1 cities.
Myth 5: Reputed Builders are safe to trust on
