Some of you might be considering to book a new apartment this year in Bangalore. Some of you might be considering to buy from Pride Developers, in Pride Enchanta, Nayandahalli, Mysore Road, Bangalore. Here is what you will find helpful, read on.
Note: Pride Enchanta block C and D Handover Delayed, Promise Not Kept by builder ! Handover date promised, Nov/Dec 2017. This is Feb 2018 and counting !!!
There are a number of builders in Bangalore, ranging from very small to very large builders.
I will create a post on all the builders in Bangalore in a dedicated post.
This is our personal experience. You don't have to take a word from here. Do your own research before buying that's all. It is your decision ultimately. Had we got someone to advise us, we would have saved a lot of expenses - I mean a LOT.
We booked with Pride Enchanta, Nayandahalli, Mysore Road, promoted by Pride Builders.
Given with examples and dateline for better understanding. Some of the following might have changed by the time you go, please understand, these are based on our personal experiences in the past, not predictions for future. The dates and numbers are for illustative purpose, didnt wan to share our exact numbers, but the fundamentals are the same, so you can grab the concept for your own calculations.
$$ Total apartment value: take the basic value Rs.70 Lakhs. Handover promised Nov/Dec 2017
$$ Jan 2015 - Booking Rs.5 Lakhs immediate or within 7 days max. If you delay beyond this, 18% interest on pending payment.
$$ Apr 2015 - 20% downpayment, i.e 14Lakhs within 1 month. This I don't remember exactly, may be 45 days allowed. Beyond this, penalty 18%. For example, if it took 3 months for you to arrange finance then penalty is 21,000 per month or 63,000 for 3 months - take a deep breadth, more than half a Lakh will vanish like with a magic wand and will fall into builders pocket in an instance.
$$ Aug 2016 - Slab wise payment starts from very next month. Almost every 45 days one slab payment and within 1 year and 8 months, +/- 1 or 2 months. So by Aug 2016 90% of payment is done, i.e 63Lakhs. In this period, if bank delayed a payment of 15Lakhs by 2 months, assuming you took a loan, the penalty is 45,000 - relax, this is their business model, either you take it or leave it. You can choose your builder with care, but after choosing you don't have a choice. That's why the decision making is very important, especially with Pride Developers type of builders.
$$ Nov 2017 - Alright, you somehow made the payments, penalties, now you are sticking your tongue out to hear the news of handover as promised, so that you can start renting out and start earning some money. In our case, the shocking experience is, after making a transaction of such huge sum, the treatment is, extremely careless customer service. It starts with not even a courtesy email apologizing for delay and putting you through anxiety. So, you email them. That's the second shock - no response. You send some reminders, that's the third shock - very casual, standard template replies - 'our customers are very important to us, we are working hard to complete as soon as possible'. No date commitments. Then the fourth shock, Nov 2017 goes, Dec 2017 goes Jan 2018 goes, Feb 2018 goes - in between, not even a word of communication about progress made, handover date planned or anything. Promises broken.
What does this mean for a person who paid from own finances: Even at 4% bank interest rate, from Sep 2016 to Feb 2018, 18 months of interest on 63 Lakhs would fetch 3.78Lakhs. If you traded in mutual fund, with 8% interest, the loss is a whopping 7.5Lakhs. If it is financed by bank, Pre-EMI would have started right from Feb 2015 (remember Pre-EMIs don't reduce principal, they are sheer expenses). These pre-EMIs on 49L is a monthly payment of 49000, times 18 months is close to 9 Lakhs.
You would have paid VAT in-between. In addition to VAT, there is also TDS deduction at source, lets discuss this separately - these are all money matters and expenses.
Whichever way you look, whether own finance or bank loan, the penalties+pre-EMI or lost opportunity of interest rate is a very considerable number.
Now, what to do about this? Is dealing with every builder the same? The answer is, it need not be the same.
Take the case of buying a ready to move property, the pre-EMI cost is saved. If you don't want to buy a ready to move, there are several builders who take EMI from you for the entire period upto handover, instead of making you pay 90% of the payment 1.5 to 2 years in advance. Such builders are friendly in financial terms, more understanding without harsh penalties and they are more likely to respect customers better. Again, do your thorough research - don't avoid Pride and go to another builder who is a replica of Pride in a different name, that makes no sense. Ask the people who purchased from the builder and take a few opinions before buying - because, this is your dream and lot of finance is involved.
If you liked this informative walk through, please share, so that, before buying from Pride Enchanta, Pride Developers or any other builder for that matter, they will check everything thoroughly and make a very informed decision, fully knowing what they are getting into.