Freebies, customer push, investor prudence

Experts say that home buyers should not be swayed by discounts and freebies offered by housing developers and should exercise  due diligence before putting in the money.

During every festival seasons like  Diwali, developers   offer tempting  schemes such as discounts and tax waivers.

Recently some companies have been offering festival discounts of up to Rs 44 lakh in a project    coming up in Kandivali West, Mumbai. The project offers two- and three-bedroom apartments at a starting price of about ₹1.7 crore.

Another developer in Indirapuram, Ghaziabad, is offering various amenities free of cost, along with free car parking and waiver of the 12% goods and services tax (GST). Together, all these can bring down the cost by ₹30.57 lakh.

A Mumbai-based developer has come up with offers to pay stamp duty and GST along with giving an early bird discount of Rs 6 lakh to buyers who book an apartment in their under-construction project.

Some developers offer subvention and part payment schemes, especially at the time of projects launches or for under-construction properties, round the year, while a lot of others start offering them specifically during the festive season.

Subvention schemes for  newer launches include lower upfront payment and the remainder on possession are standard subvention schemes. The   initial payment or down payment that a home buyer has to make to buy a property is deliberately kept low to attract more buyers.

To attract buyers developers are also offering freebies, including gold coins, I-Phones and cars, at the time of booking. Some others are offering free air-conditioners, modular kitchen, furniture and so on.

It is to clear inventories that most developers are offering waiver of tax and other fees. For projects closer to completion, freebies are accompanied by waiver of GST, stamp duty or registration charges or the additional costs over and above the basic cost of the apartment.

Experts say that buyers should not be swayed only by packages and offers.  Buy only when you find a property that suits your needs.

Offers can be rewarding if the customer has picked the right developer and project. One should be  careful about financial schemes like No- EMI till possession, subvention schemes, part payments and so on.

They suggest that instead of accepting a freebie, the buyer should try and negotiate with the developer for cash discounts. A price discount is the clearest and most decisive incentive that a developer can offer.

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Posted on

November 19, 2018

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