Writing after quite some time in the forum... Had few unanswered questions within self and thought I would put them in here for an open discussion.
I have been (passively) looking, following up (and slowly gathering cash) the Chennai RE (with the idea of buying a land to construct a house). In the process, I have been looking various plots, some flats, some newly built independent houses, some pre-owned independent houses, etc. I am not able to come to a conclusion about the behavior of the market as such. Has anyone experienced/thought in the same lines?
Few of my experiences:
- Local politician cum ex-mason turning into a realtor building duplex homes claiming them to be 'architect designed' - spec - 1000 sqft land, 1400 sqft constuction near Zamin pallavaram, and quoting them for 40L, 41L, 43L, 45L on consecutive weeks. End of Month 1, only one remained unsold as he claims. Anybody with a common sense wouldn't dare go near that crappy construction, over priced (land prices in that street around 40L). Who on earth is buying them and where is the value for money in that?
- Multiple brokers dealing the same property and quoting different prices and if shown some seriousness towards the property, they redirect us (mostly) towards a big broker or POA or owner who in turn is setting a very high rate (have experienced this few times). Their claim for pricing is that the last sold ground rate + 2/3 Lacs. They don't even have clues of the basis on which they hike the prices.
- Many land / building owners asked me to move on / provoked on more questions. In few cases, I was told indirectly that they could easily get NRI customers who buy without even seeing the property.
- Quality of construction is awful in many many cases. Premium builders do that well, but charge more. There are only countable players in the market who does a decent construction for an average price.
- Few buyers that I have seen took the property purchase as easy as a Bravia TV pickup on a six month EMI and easily got into the deal.
- Surprisingly, many of the property owners are not agreeing for a loan with nationalised banks quoting the reasons like delay, too many queries etc. One of my friends bought a land and the promotor insisted to go with a loan from a private bank which had already approved their project and my friend had gone for that and after some time, when he tried transferring the loan to SBI, they refused saying that their legal panel has found some problems with the land documentation and apparently it was found that his land area consisted of some poromboke land as well which he had already utilized for construction.
- Spending capacity of individuals have gone up drastically / everyone seem to be rich. Am I missing doing something that they do extra (legally, ethically)
- I have seen deals going through in one day. Visit on the previous day along with me, booking on the next day (without me!
)
Are we not really considering this 'Value for Money' point?
Middlemen seem to drive the market and costs. One of the many many brokers that I had dealt with said that he has closed 10 deals so far with at least 1% brokerage from both parties.
Guideline value seem to have no value.
Will there be any regulation at all from the Government on this sector?
I am tired.