Buying an under-construction home? Do these 8 money checks before booking

Reports coming in for today mention that An under-construction flat can be tempting, especially when the launch price looks softer than a similar ready-to-move property. But the buyer has to commit money long before the apartment is ready.

There is additionally a rule around the booking amount. Under the Real Estate (Regulation and Development) Act, 2016, a builder cannot take more than 10 percent of the apartment's cost as an advance or application fee without first entering into a written and registered agreement for sale.

1. Check the project on the RERA website

Before paying the booking amount, search for the project on the relevant state RERA portal. You can check details such as the developer, approved plans, land information and the promised completion date.

RERA requires 70 percent of the money collected from buyers for a project to be kept in a separate bank account and used for land and construction costs. Withdrawals are linked to the progress of the project and require the prescribed certifications.

Still, RERA registration is not a guarantee that you will get possession on the promised date.

2. Look at the builder's earlier projects

Do not judge the developer only by the sample flat or the sales team's presentation. Check completed projects,  If earlier projects have a history of long delays, that is relevant when you are deciding how much money you can safely commit. Additionally check publicly available information around major disputes. 3. Ask for the complete price

The advertised rate may not tell you what the flat will finally cost.

Ask for a written cost sheet covering the apartment price, parking, floor-climb charges, club or amenity charges, maintenance deposits and other applicable charges. GST additionally needs to be included in your calculation.

4. Match the payment schedule with your salary

A construction-linked payment plan means you pay as work progresses. A large upfront payment can leave you with less cash for other needs.

If you are taking a loan, ask the lender around the timing of disbursements. RBI has advised banks that disbursal for under-construction housing should be linked to construction stages and has cautioned against upfront disbursal arrangements. 5. Work out rent plus EMI

This is where an apparently affordable home can become expensive.

Suppose you at present pay Rs. 25,000 in rent and your loan payment is Rs. 35,000 a month. That means Rs. 60,000 is going towards housing every month.

If possession is delayed by another year, the combined outgo could reach Rs. 7.2 lakh. This is only an illustration, but it reveals why buyers need some financial breathing room.

6. Keep an emergency fund untouched

Do not put every available indian rupee into the down payment.

A job change, medical emergency or major family expense can come up while the house is still being built. Keeping an emergency fund separate from the home-buying money can prevent you from taking another expensive loan when something goes wrong.

7. Read the cancellation terms

Before signing the booking form or agreement, check what happens if you decide not to proceed. Look at the refund conditions, cancellation charges and any interest or penalty for missing scheduled payments.

Do not assume that a booking amount will automatically come back if the purchase falls through.

8. Know what happens if the builder delays possession

RERA gives buyers remedies when a promoter fails to complete or give possession according to the agreement. Under Section 18, an allottee who chooses to withdraw because of such a failure can seek a refund with interest and compensation as provided under the law.

Before booking, put all the numbers on one page: property price, GST, other charges, down payment, loan payments and rent during construction. Then see how much cash you will still have left. If one long delay can throw the household budget off balance, the flat may be affordable only on paper.