Five ways to check a builder’s reputation
May 13, 2014
Source : The Economic Times
If you are planning to buy a property under construction, don't just go by the brochure claims. A lot depends on the builder's competence and resources. ET lists some checks before you finalise a project.

1. Ground report

You can conduct a quick Internet search by keying in the company name since customer forums, blogs, news reports, property sites, etc, typically have a lot of information. However, it is still a good idea to go in for field research. Talk to c ..

If you are planning to buy a property under construction, don't just go by the brochure claims. A lot depends on the builder's competence and resources. ET lists some checks before you finalise a project.

1. Ground report

You can conduct a quick Internet search by keying in the company name since customer forums, blogs, news reports, property sites, etc, typically have a lot of information. However, it is still a good idea to go in for field research. Talk to c ..

 

MUMBAI: If you are planning to buy a property under construction, don't just go by the brochure claims. A lot depends on the builder's competence and resources. ET lists some checks before you finalise a project.

1. Ground report

You can conduct a quick Internet search by keying in the company name since customer forums, blogs, news reports, property sites, etc, typically have a lot of information. However, it is still a good idea to go in for field research. Talk to customers who bought units in old projects as well as local brokers. The current market price of the past projects in comparison to peers in the same locality is also an indicator of the builder's standing. You should check the credentials of the contractors associated with the project as well.

2. Track record

It is safer to buy from an experienced builder with a good delivery record since he is likely to have a more professional approach, with systems and processes up and running. Besides, you can check his track record and find out how well the past projects have been executed. Remember, lack of transparency is a good enough reason to not buy. A reputed builder will also typically be a member of an industry association, such as the Confederation of Real Estate Developers Association of India (CREDAI), or the Builder's Association of India (BAI). These are self-regulatory bodies that have strict norms for builders and any deviation may lead to the company being blacklisted by the association.

3. Quality certificate

The International Organization for Standardization's 9001:2008 certification criteria for a quality management system is based on eight principles, including customer focus and satisfaction. Therefore, an ISO 9001:2008 audited and certified builder is expected to be more professional in his approach, and it is a good idea to check this before zeroing in on a housing project.

4. Realty ratings

Started in 2010, the CrisilBSE 0.96 % Real Estate Star Ratings (Crest) provide cityspecific assessment of real estate projects, and can help you compare and identify quality projects in a particular city. They also have a National Developer Ratings list, which rates a developer on parameters such as good track record of transfer of clean title, maintaining legal and construction standards, and timely project completion. However, the developer has to register with Crisil to be rated and not many projects are on its radar yet.

5. Financial stability

Is the company overleveraged? Get hold of the company's balance sheet, and if the business has too much debt or is unable to repay its loans, strike off the project. Some listed builders put up their financial details on their websites. For others, you can contact the concerned Registrars of Companies (ROC) office. The Ministry of Corporate Affairs' website (Mca.gov.in/MCA21/) also has the details. Log on and register yourself to view all company documents under the 'view public documents' section. The site will ask for information like company CIN/FCRN, registration number, ROC details, which should be easily available with the company, or you can run a Google search. Also, check the cash flow statement (not income statement). Companies with strong cash flows are likely to complete the projects on time.

 

 

 

 

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