The Most Authentic Guide on Personal Finance and Investments

(Funny) Words of Wisdom : "Someone stole all my credit cards, but I won't be reporting it. The thief spends less than my wife did." ~ Henny Youngman

Real Estate. UnReal Promises.

It is a sad fact but true — marketing practices in the real estate sector are sometimes brazen, scandalous and not very ethical. 

It would, therefore, be advisable to be wary of such sales gimmicks and not become a gullible victim of a highly provocative marketing.

For example...

1. The walls of the sample flat are kept thinner than the actual structure to be finally built. The ceiling too is kept at more height, than what the drawings mention. This is done to create an illusion of much larger rooms and a more spacious flat than what the final dimensions would be. Surely, no one would measure the sample flat (especially the height) and compare with the drawings of the proposed structure.   

2. And, of course, the use of high-quality paint, tiles and furniture & fittings, installed in the sample flat gives the impression of a high-end property. Actual material and fittings used would normally be of relatively inferior quality. So don't get fooled by the stunning decor of a sample flat.

3. People are often goaded into booking a flat at the earliest by claiming that only a few flats remain unsold. Given the difficult state of real estate sector and the sky-scraping interest rates...and soaring further, I have my doubts. Probably most of the sales are on paper only, so as to create pressure on the prospective customers.

4. Threat of a price increase in the coming months, is another of the favourite pressure tactics employed by the developers. Given that the property registrations are down and so are the loan sanctions, I wonder how often is this threat of looming price increase true.

5. The developer is offering free foreign trip for the family. On a property cost touching almost a crore, this inducement of around Rs.1.50 - 2.00 lakhs is negligible and meaningless . It would probably be worthwhile to negotiate for a straightforward discount or sharing of stamp duty/ registration charges. This may, not only be more cost effective, but would also reduce the loan required (and consequently lower EMI payouts every month...month after month...year after year). 

6. Zero loan EMIs till completion (or Pre EMI sharing till possession or the 20:80 formula) are all normally built into the cost. Also, it won't be an offer for unlimited period... it would be max 2-3 years. And, if the builder defaults on payment to the banks, you have to pay the EMIs. After all, the ultimate responsibility to service the loan is yours. 

So I reiterate my warning...Buyer Beware!!

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Ignorance is like a SIGNED BLANK CHEQUE... anyone can MISUSE it.

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