5 Super Points of Protection of Real Estate Bill A Home Buyer Should Know!

Real Estate Bill, which is aimed at safeguarding home buyers’ interest, moved nearer to becoming law after it had been removed within Rajya Sabha. The balance made to bring transparency and accountability towards the real estate sector, is anticipated to bring back investor and buyer confidence.

Listed here are five ways the way the bill will safeguard home buyer:  

-       All commercial and residential projects which include eight apartments or cover a place of 500 square meters or even more, will need to be registered with real estate regulator. This virtually covers most property being built-in the metropolitan areas Asia. No project is going to be permitted to become offered towards the buyer unless of course it’s all necessary permissions from local government bodies to begin construction.

-      Buyer-seller or builder-buyer contracts are very uneven, offering very little legal rights or protection towards the buyer today. When the bill becomes an action, one on the side contracts will end up a factor of history. Any delay in payment though the builder will attract exactly the same penalty as exactly what the buyer must pay out, if his payment is postponed. Builders who are well known for altering project plans, halfway, including the amount of flooring inside a building or even the layout of the flat, will be barred from doing this, with no approval of tow or third from the purchasers.

-        Real estate projects frequently get postponed because designers divert funds intended for one project to a different. But when the balance becomes law, property designers will need to deposit a minimum of 7o percent of cash collected from purchasers within an escrow account to satisfy construction costs. This can make sure that designers who exhaust cash don’t stall projects.

-      Designers cannot sell property based on super area (flat area plus common area). They are going to have obviously define carpeting area including spaces like kitchen and toilets. So a purchaser knows what is he or she getting as living space and also the cost he or she is having to pay for this.

-        In addition, designers will also be banned from making claims in ads or posting images of site or project that are false. Misleading advertising has been created punishable. For flouting anyone of rules specified by the Regulator Act, the developer could be penalized 10 percent of the total project cost. As well as for repeated offense, the builder may also be jailed.

What Are Bridge Loans & How Do They Work?

A bridge loan is a kind of short term loan taken out for a set period of time ranging usually from 2 weeks to 3 years. Bridge loan has a short tenure with a relatively higher interest rate than a standard loan. Some lenders might charge you the standard variable rate on a bridge loan and some will adjust the interest rate as per the situation or the risk involved. You may rarely come across the situation when you would sell your current property at the same time you buy your next home. And at times, the situation may push you to buy a new property before you are done with the sale of your existing property. Even, the arrangement of such a huge amount is not easy for everyone but, bridge loan is something which can act as a savior for you in this situation.

How to apply for bridge loan?

One can easily apply for a bridge loan individually or jointly like if you are going to co-won the proposed property the, all the proposed owners must be co-applicants for a bridge loan. The prevailing interest rate in the market for a residential property is 12.30% and for the commercial properties it is 13.15%. The interest rate may vary from loan providing agencies or banks.

Documents required to apply for short-term bridge loan

-          Proof of identity & residence ( passport, voters id, adhar card, driving license, etc)

-          Proof of income ( PAN card, salary slips, Bank statements, Form 16 & IT returns)

-          Property documents of both the parties (Title deeds with chain of property and proof of no encumbrance on property)

Repay of Bridging Loan

This is one of most important and crucial part as this will impact your financial strength. So, before you make up your mind to opt for a bridge loan, you should know that what you are getting into. Firstly, you need to know your mortgage payments are calculated during your loan period and how much you will have to pay once the loan period is over. When you are in the process of selling your existing property, the minimum repayments are calculated on an interest only basis and depending on your lender, you may be able to capitalize all repayments until the final sale is carried out. In addition, when you apply for a bridge loan, your peak debt will increase and so will the overall interest on the loan.

Should you opt for bridge loan?

Before taking another step ahead towards a bridge loan, you must know its pros and cons. The major cons of availing a bridge loan is that the interest rate is much higher than the regular loan. On the other hand it gives you the benefit to wait for better options rather than accepting a lower offer in a hurry.

Residential Property Launches Down 20%, Sale Marginally Up 3% in 2015

The launch of new residential projects was down 20% in 2015, while the sale increased marginally by 3%, the global property market and research firm Knight Frank India’s report revealed on Thursday. The report says that the glut in the realty market of the Mumbai Metropolitan Region will continue. The reform in the housing sector has failed to revive the market.

According to report, in 2015, new launches were down by 23% compared to 2014. The demand has shrunk by 6%. The property prices are stagnant. It has registered a marginal increase of 3%. This is the good time to buy the new home, says the report. Interestingly, the budget housing between Rs.30 lakh to Rs.60 lakh are always in demand, now reported in distress in Navi Mumbai, and peripheral of the central and western suburbs. While demand in Thane has slightly up by the 13%. The premium South Mumbai market witnessed a 108% jump in new project launches to 208 units in 2015.

The residential market in the MMR has been experiencing a steady fall in new launches. There was a 23% decline in the new launches in 2015, compared to 2014. During the second half of 2015, sale of housing units dropped by 6% year to year. For the first time since 2008, the demands for office space has exceeded than supply in MMR; office absorption is at 130%of supply in 2015. The information technology industry emerged as the top occupier of office space in the MMR, contributing 46% of the demand in 2015.

We have witnessed a robust office space demand with 7.5million sq.ft. of annual absorption in 2015. The overall market observed big deals across IT and Pharmaceuticals space, some of the largest office deals ever seen in Mumbai. There is a shortage of quality office space in the city; however it is not visible in the peripheral areas. Outlook for 2016 is a further decline in supply making it a favourable landlord market. However, in next 6 months we do see a gap in terms of expectations of tenant and landlord given the corporate earnings is sluggish and rents are likely to increase gradually in select micro markets due to declining supply.