Undeniably, everyone desires to buy a dream home, which they can call their own but everybody isn't that blessed. In reality, home buyers are always looking for the good deal however, the big confusion among buyers is whether to buy ready to move or under construction property. Each of these preferences has its pros and cons. It is extremely imperative to be aware about the advantages and disadvantages of ready to move and under construction properties. Let’s take a look at them.
Ready to move in property
A new trend has been catching up from last couple of months where a number of home buyers are slowly heading towards ready to move homes over under construction homes as going for the latter requires waiting for a couple of years to get possession. Since 2008 recession, many home buyers complained about high wait times before possession of houses, because builders delaying the projects.
Immediate accessibility: Home buyers do not have to linger around to move into their dream house. All buyers have to do is to make full payment, sign on required documents and get their belongings transported to the new place.
You get what you see: In a ready to move home, buyers pays for what they see. As there are people living in the society, the buyers get a fair idea about the area, nearby shopping centers, neighbourhood and utility, maintenance etc.
Savings on rent: Savings on rental income starts immediately. This is a big inducement for home buyers to buy a ready to move homes.
Relatively Expensive: For ready to move homes, buyers have to pay higher amount usually 25 percent to 50 percent more than under construction homes.
Is the property is a well constructed one? The biggest negative that comes with a ready to move home is that you have no idea about the quality of raw materials used for the construction, strength of foundation and so on. Given a shabby maintenance, the house starts looking old within a few years.
Points to keep in mind:
- While it is true that ready to move in homes are more expensive, home buyers should do a thorough research by speaking with a few people in the locality to confirm that the price being paid is not exorbitantly high.
- If you are the second owner, understand why the earlier owner is selling the property. The seller may give you any reason, but it is your duty to find out the real reason. After all, you are paying a premium to buy a ready to move in home.
Under construction home:
Today, under construction home is the most ideal option for buying a property. A builder announces a new housing project through advertisements in Televisions, news papers and other media. Agents start going around the market, malls, companies and homes to spread a word about the property. The builder motto is to sell as many houses as possible before the construction starts. It is known for a fact that more than 75 percent of the homes built by the reputed builders are booked even before a single brick is laid. Under construction home provides a surfeit of choices for home buyers.
Economical: Under construction homes are relatively cheaper as compare to ready to move homes. There is a significant cost difference of 20 to 40 percent between them.
Plenty of choices: Plenty of under construction homes are available as compare to ready to move homes. There is a plenty of possibilities to choose under construction homes such as locations, prices, amenities provided and so on. Many more housing projects are coming up.
Low EMI’s: EMI’s are paid as the work progresses. Therefore, initial EMI’s are less compared to under construction homes.
Win-win situation for both buyers and builders: Buying an under construction home is win-win situation for both sellers and builders as the seller gets customers even before laying the brick while the buyers saves money.
Better returns: Since the price paid is less, People get higher returns investing on under construction home but that also comes with the risk factor. For example, Noida people who invested in homes got better returns while people invested near Samshabad, Hyderabad is still waiting for better returns. This kind of advantage is not possible on ready to move home investment.
High Risk Factor: All is not so well in under construction homes. There have been cases where the builder does not finish the project in a stipulated time because of cash crunch, increase in the cost of raw materials and interest rates.
With time the market outlook may change: The market outlook may change with time, like what happened in case of Samshabad area. The area was supposed to host many engineering colleges, hospitals, largest Infosys campus and so on, but due to financial crisis of 2008 nothing came up.
In some cases, buyers won’t get everything what they have been promised:This is one of the common compliant made by home buyers. They usually do not get what is promised to them in the documents related to the property. In such cases, Home buyers feel distressed.
Points to keep in mind:
- Before booking an under construction home, buyers should check the reputation of the builder. This is the important step that buyers should follow. If the builder has a bad track record, the same history will repeat itself.
- Home buyers should check with the banks how the loan amounts will be released.
- Before signing on the builder’s agreement, pay more attention to penalty clauses.
Finally which one is better?
The final choice will depend upon various rationales for instance; the buyer’s financial conditions or choice of location where if the buyers have enough funds or ready to wait as well as can take risks and do not care about the location then, under construction home from a reputed builder would be a more logical option.
If the buyer have funds but not sure about future cash flow, short move in time, low risk and a developed locality, then ready to move home would be wise.