How to Check whether Builder is Genuine or Not?
Buying a house is a huge and perhaps once in a lifetime investment and choosing the right builder must be the top priority. Builders often delay projects again and again and eventually if you are not careful enough the burden of the builder falls on you. Or sometimes you do not get the facilities which were mentioned in the brochures or promised to you or both being there the quality of work may not be up to standard. With so many projects being delayed, no. of projects which get completed on the schedule are decreasing. You, therefore, need to check your builder’s credentials before investing for your dream house. Hence don’t go just with what the brochure claims but look out for the history and other details of the builder so that you can trust him. This article will help you with just that.
Remember the following four things are important for you while looking for a builder:
- Timely Delivery
- Delivery of what was promised
- Quality of work
- Does not claim extra money
Check the Track Record of the Builder
01. Timely Delivery
One should evaluate a developer on the basis of project delivery and size of commitments. By checking the past commitments and delivery of the promises, you can determine whether you should invest in the builder or not. While checking from the past investments you should try to answer questions such as Has the builder completed his projects on schedule or not? How much delay was there and what is the reason for his delay? How many products have the builder still not completed? Or are there promises unfulfilled?
It is recommended to invest in a builder who has made several projects and has delivered them on time. Since a lot of projects mean that a builder is more skillful from experience and has learned from his mistakes. It is always safe to buy from an experienced builder who has a good delivery record since he tends to have a more professional approach with systems and processes up and running.
02. Visit Previous Projects
It is recommended to visit precious projects of the builder, as this will help you in seeing for yourself the quality of the projects of the builder.
03. Delivery of What was Promised
It is recommended to visit precious projects of the builder, as this will help you in seeing for yourself the quality of the projects of the builder. Also, assure that he delivered whatever he had promised. You can talk to the owners of the property and ask them about the quality of the projects of the builder. If the builder has cut corners once; he is likely to do it again. Some builders make club houses in areas which were meant to park and some make ten floors in a building which had permission for nine. By getting to know these things you will be able to decide whether this builder is someone you should trust or not.
04. Does not Claim Extra Money
The reputed and good builder will always honor the terms agreed in the agreement and his agreement will also be exhaustive and will never ask for any extra sum in name of extra work or extra specifications or extra-legal charge or extra services etc., and so on. This is a dark area, which may put a buyer in a fix as this will make his budget out of control.
05. Financial Health
All other parameters being good, if builder lacks resources, he will find it difficult to deliver everything in time even if he desires. You must, therefore, assess his financial status. Builders upload their financial statements and it is necessary to check them to assure that the company is not overleveraged. The financial health of the builder matters as if the builder is in a crisis financially, there will be a risk of him not completing the projects on time and delaying it. Good financial health means that the developer is more trustable. One should also check the cash flow statement of the builder and see how the builder manages their funds.
The task of collecting the details is easy for listed builders, as their financial statements are available online easily. But for the unlisted or unorganized – individual developers, you will have to delve into the subject or ask it from him directly. Also, you should talk to the previous associates of the builder and previous people who have worked on projects with him to make sure what type of financial stability can the builder offer.
06. Check the Land Ownership and Title
You must check that the builder has ownership over the land on which he is going to build his project. Some builders enter into collaborations with the landowners rather than owning the land and this may get lost in disputes. Check if your property is being built on the land owned by the builder. Because if it is on the disputed land, the property may not be delivered to you even if the whole project has been built or you may not get the title, though you may get possession.
07. Check if the Banks have Approved the Builder
The banks perform a really in-depth check of the builder before lending them money for the construction of the project. If the number of banks has approved the loan in the builder’s project, the less you have to worry about. As the banks will check every past project, and they also check the builder’s profile. This helps you to determine whether you should invest in the builder’s project.
08. Ratings of the Developer
CRISIL in India rates the builders. Some portals also do it.
The ratings are decided by considering many factors such as the ability to complete projects on the specific schedule and giving the performance as per agreed standards. The parameters taken for judging are the financial strength, organizational strength, and track record. Based on their performance in all of these parameters they are rated as per their performance from DA1 to DA5. DA1 is considered Excellent while DA5 is considered poor. A higher rating means that the builder will complete their project on time, be apt on their schedule and deliver projects as per the agreed standards and specifications.
09. Quality Assurance
You must ensure that the project has been fully approved by the concerned authorities of the Government before you invest or sign the agreement. ISO 9000+ certified corporations typically provide smart quality services and product. You should always check if your builder or builder’s firm is ISO certified company or not. Ensure that the builder gives you a guarantee for at least a couple of years against construction defects. Ensure that corporation water connection is available at the provided tube wells may dry up sooner than expected. Further for long-term sustainability, you need to have a municipal water connection. Similar is for sewerage and stormwater disposed of.
10. Builders’ Association
There are builders’ associations in India which are professional associations and they can help in ensuring the confidence we should have in the builder. Associations such as Builders’ Association of India (BAI), Confederation of Real Estate Developers Association of India (CREDAI), have certain rules and regulations for all the members of the associations and the rules ensure that moral conduct is observed by the builder. The builders have to follow these rules and regulations, and hence a member of any of these associations can be trusted to a certain extent. These associations also help the builders as they have really close and vast financial relations with different financial institutions.