Every investment comes with a risk. In basic finance, the higher the risk, the higher the return on investment. This principle works for most instruments available in the financial market. However, for properties, people tend to be risk-averse and look for safe transactions. Several reasons can justify the fact. First, investing in apartments involves a lot of money. Secondly, most people purchase a flat for long-term use, and risky investments can jeopardize it. But most importantly, a large portion of home buyers can only afford to purchase one apartment in their lifetimes. Therefore, the investment has to be fruitful. If you are planning to purchase a residence anytime soon, here are a few things to consider before buying a house.
Under Construction Apartments
In most cases, people buy apartments under construction because they have a slightly lower price. As long as the developers keep their promises, it is fine. On the other hand, if the sellers cannot finish the project on time, face charges or go bankrupt, you will be left with an incomplete flat. This real estate risk might even force you to resume the construction by yourself. To avoid uncertainty, verification of sellers is necessary. Usually, renowned developer projects have less chance of such occurrences. Primarily because they a have an ethical management approach and better solvency. Secondly, they also have a reputation to maintain in the market. Also, the existing competition compels these developers to offer value for money and fight for the right clients investing in apartments.
Calculation of Apartment Size
The total size of the flat does not only cover usable or accessible space but also consists of the common areas such as stairways, a lift lobby etc. To make it look more attractive, your developer might include additionals such as a rooftop, driveways and the passage to misrepresent the information. Problem is not with buying a house with such peculiarities but with the registration. Under Real Estate Act 2010 inclusion of those areas in the registration is not permitted. Therefore, if you decide to buy the property, you will end up paying more than usual. To ensure you don’t fall victim here and minimize the real estate risk, comb through the floor plan or seek professional help before investing in apartments.
Scrutinizing The Building Plan
Following the proper and approved building plan is vital for apartment projects. During registration or loan sanctioning, authorities check if the property is built accordingly or not. Deviations might lead to a penalty, damage, and even reconstruction of the apartment. A common underlying real estate risk is not being able to identify authentic or verified documents. Sellers can take advantage of your lack of understanding to make more profit out of it. Taking help of a property expert can save you from this real estate risk.
Risk of Cancelling A Booked Apartment
To book flats in Dhaka or any other city, you need to sign two papers, the Allotment Letter and The Deed of Agreement. Booking your apartment is an assurance to the developer that you want to purchase it. Hence, developers start depending on the property contract to continue with further construction. However, things might not go as planned and you might have to cancel the booking (which is your legal right). Then again, as per the law, developers will deduct 10% of the money that you provided as booking money and will return the rest. This 10% is your risk and that’s why you should make sure you have a solid financial plan before buying a house.
Home Loan Sanctioning
One of the reasons why you might have to cancel a booked apartment is delayed loan sanctioning. Due to home loan processing steps, background verification or any other cause, lenders might be reluctant to immediately disburse the loan. Therefore, the right way to secure an apartment booking is to confirm the credit facility with your desired financial institution first and then confirm with the seller. That way, both parties are satisfied and you are able to minimize real estate risk.
For a country like ours, we do not just buy properties for ourselves, we buy it for our family and the generations to come. It is a sense of security that keeps us from stressing too much. Surely no one wants to pass a disputed estate onto their descendants. This is why it is better to know the ins and outs of the deal before investing in apartments and make a smart decision for life.