Buying a house – is always a cherished memory and an aspiration we all live by! My First House I purchased is something we all remember— like maybe The First Job! The First Car!
As a Customer, I will share with you the aspects I missed out while buying my first house as my learnings and leave you with some of my thoughts on areas that Developers / Builders and Real Estate service providers could improve upon.
Aspects I Missed Out While Buying My First House
Considering myself as an astute and an aware buyer, I chose a residential project by a builder whose creditworthiness I had checked from the international markets. I assessed the house layout, the project features, specifications, infrastructure, surrounding ecosystem, potential chances on return on my investment, etc. and decided to book a residential house in a gated community in NCR on a construction-linked plan. I was so sure of my research and credentials of the builder that even the unit no. I booked was representative of my age at that time - 37 years (2008), hoping to shift in the house @40. I received the possession @48 years in 2019!
The builder name you trust may be the most successful outside India or on its own in India, but if they are in with a local company as a JV/Consortium, things may not be the same. Be careful and assess the risk.
While we sign the contract with the builder, we ensure that the risk is balanced and risk mitigation clauses, especially on builder default, exist, but at times miss the fine print. I did check that there was a penalty clause if the builder defaulted on timely completion, but forgot to read that the prerequisite was not to have a single delayed payment on the milestone payment schedule. While on Work-related travel outside India, I missed two milestone deadlines and chose to physically inspect and pay delayed charges vs. paying on time without checking the completeness of the milestone they were charging me for, not realizing what I was getting into. For a mere 70,000 INR of delayed payment accrued over the payment period, I did not get eligible for ~INR 8 lakhs of penalty charges payable to me by the builder for delayed possession. Something I could not reverse. So knowing it in detail is critical from day 1. Read well, connect the dots, and execute meticulously.
Happy that the project has a clubhouse, many standard facilities, multiple buildings, and options; however, I did not realize that the builder's OC depended on completing certain standard project features and not just the phase or structure I had booked my unit. So, despite my unit is complete, the builder had no occupation certificate, so I had no possession. Somehow, I was smart and lucky enough not to fall in the trap of taking conditional possession, thus letting the builder off the hook from his deliverables and responsibilities and transferring the risk from Him to Me.
These Commercial, Financial, Legal aspects are as important than the apparent glamorous features the builders try to sell the dream to you! I am not saying that you do not be emotionally driven while buying a house, or not chose or evaluate the aspects of design, architecture, open spaces, balcony, bedroom sizes, fittings, furnishing, and project features, but also give equal importance to the fact-based deeper assessment of the builder, his approval conditions for the completion and also the commercial terms and conditions of your sale deed/ contract with the builder. With the RERA now in place, do not get convinced that all would be okay, and you are well covered as the Builder is RERA compliant. There are still many things that can lead you to a frustrating path and make you bleed. So, Dig Deeper, Check, and make an informed choice.
Expectations from Developers / Builders
One more aspect that I would like to highlight is my ask or expectation from the builders for better customer experience. Usually, a retail customer of residential house shuttles from the ‘Sales Department’ of the builder at the time of booking/ purchase to ‘Customer Service’ during the construction/ buildup phase and then gets handed over to the ‘Facilities and Project Maintenance Teams’ when she/he takes on the possession. This is all good if things stay smooth. Now if an incident happens, and some major issue happens due to which the property gets damaged or where safety assessment is required, financial compensation is involved, other aspects get involved, a user usually is at the mercy of the front-ending customer-facing facilities management teams of these Developers, who are executing teams or the spokesperson on behalf of the management. Still, the customer cannot get to talk to the right stakeholders or position his point of view and therefore feels anxious and taken for a ride. As an independent customer, the ability to have legal representation is always not always possible. One way for transparency, continuity, and better customer experience would be to have an aspect of account management like in Banks, where we have a concept of a relationship manager, who stays as a focal point between the company and the customer. Having a relationship manager assigned to a group of retail customers would be an excellent step. This would not only maintain continuity but also a focal point of communication between the customer and the builder/developer during all stages of the purchase of the house, pre-possession, and post-possession and can help the customer navigate seamlessly amongst departments and also be able to convey/ communicate or meet up the senior team/ higher-ups as the need be. This would also bring in the much-needed collaboration and loyalty (which is somewhere missing) & would prove to be the differentiating edge.
Expectations from the Industry
The last aspect I would touch upon is the Gap I see on an independent, unbiased, comprehensive, and customized advice to us as a retail customer on real estate investments, be it for a house to live in, a residential/commercial buy for pure investment, etc. We do have functional experts, like Lawyers, CAs, etc. or the properties' sales channels, which are not neutral as they sell for the specific projects. Like a financial advisor, we should have Real Estate Advisors to understand well the customer requirements and, based on their needs, financials, and risk profile, suggest the most suitable investment and act as commercial/legal and financial advisors along the journey.
If someone is listening, It Is Time to Start a Real Estate Consultancy Services for Retail Customers/Buyers…!!!