Things That Go Wrong in Real Estate Sales.

When closing the deal on a real estate sale, a combination of stress and excitement can lead to mistakes being made. Little slip-ups and oversights can cause major delays and frustration when it comes time for closing. Having an idea of what problems you can expect will keep these common errors from happening in your sale as well.

Common Mistakes :

One of the most common mistakes is not reading the details of paperwork closely enough. Even simple errors like typos and the misspelling of names can take hours to correct once the papers have been signed. Catching these errors early will speed along the process.

Another problem to look out for is a money transfer not getting to the seller by the appointed day. This is usually a bank problem, with the delay being on their end. However, you can prevent this from happening by either bringing a check to the closing meeting, or wiring the money to the seller a few days in advance.

One final problem to look out for is the loan documents going missing. If sent by mail to you, there may be inexplicable delays that force an alteration in the deadlines. Keep this from happening by demanding expedited shipping with tracking.

While it’s impossible to prepare for every eventuality, it is possible to minimize the potential for problems.  My best advice is to choose your Realtor carefully and leave the lines of communication open.  A successful end to a real estate transaction almost always occurs when everyone involved proceeds with good faith, patience and good will.

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How Indian Real Estate Market Will Likely Fair in 2015 ?

According to the National Housing Bank (NHB)
Residex Index, residential property prices show an upward trend in the second half of 2014. First half had seen property prices dip, as the weak rupee and high inflation had a negative impact on spending. Needless to mention that 2015 will largely be about recovery. The RBI will most likely cut interest rates and this will see more spending in the residential real estate segment. The Ministry of Statistics Program and Implementation and PwC Analysis predict a growth of 8 to 9 per cent. Added to this, the introduction of REITs, improved market sentiment and more efforts by the government to reduce project loopholes and bottlenecks in transactions will go a long way in clearing the way for positive trends in 2015.
In India, real estate plays an important role, from affordable housing to infrastructure and generating employment. Here are some of the reasons why:
• The Economic Survey of 2013-14 revealed housing to be the second largest industry that generates employment, after agriculture.
• With more than 300 linked industries like steel, transport, construction, cement and brick, real estate contributes significantly to the country's GDP share and capital formation.
• NHB's report places real estate as the third most impactful industry in India in terms of its effect on other industries and fourth in terms of employment generation.
• The residential segment, comprising residential buildings, townships, schools, colleges and hospitals and other projects, makes the maximum overall contribution in the real estate industry and commands the largest part of its market share.
• The real estate sector employs more than 35 million people, especially low and medium skilled labour
• Directly impacts manufacturing
• Attracts a lot of money in foreign direct investment (FDI)

Recap of 2014, its main events and economic drivers

• According to Colliers Research, Delhi,Bangalore and Chennai witnessed maximum demand and growth, while Kolkata, Mumbai and Gurgaon were unchanged. Despite this, many developers launched new projects during the end of 2014.
• There is a backlog of unsold property. 2014 has seen delays in approvals, project clearances and targets, apart from debt commitment on property and government spending less in this area and a huge delay in finishing projects
• Construction industry has grown 2 per cent from 2014 to 2015.

Trends in 2015
• The Planning Commission estimates that by 2030, about 600 million people will live in cities. Affordable housing therefore is a huge demand and the industry has a large gap to meet, with shortage seen among the low income groups.
• International agencies like IMF and World Bank predict an increase in GDP.
• Real estate market is driven largely by sentiment.
• First half of 2015 will be largely recovery with property markets.
• Project Vendor.com projects a 10 to 15 per cent increase in growth from FY14 to FY17 and 11 per cent growth in FY15. Residential and commercial projects, organised retail will contribute to this growth significantly.
• Real estate construction market is poised to grow by 20 per cent between now and 2017.
• Both large and specialised players stand to benefit and gain equally.
• Real Estate Investment Trusts (REITs) and commercial real estate will make significant impact. REITs will have a huge impact in 2015. It is an internationally tried and tested strategy, especially in the USA, Taiwan, South Korea, Singapore and Australia. An REIT is a trust that buys, sells, develops and manages income-generating real estate property such as malls, commercial office spaces and more, with the main intention of attracting investors who can manage an interesting array of properties. Corporate investors benefit from tax exemptions. It largely impacts small investors and encourages proper investment channels in large real estate accounts, and is a better alternative to investing in stock, due to its higher returns and a diversified portfolio of investments. Blackstone, Xander, Brookfield and more real estate funds intend to launch REITs in the country and DLF, Phoenix and Prestige are expecting to make use of this huge opportunity.
• The residential real estate space in India is divided into affordable housing, mid-level priced houses and the luxury segment. The onus on low cost housing is expected to put pressure on the luxury segment, but this is not significant. 2015 will focus more on recovery and clearing inventory, construction deadlines and backlogs.
• Pricing is very important. Affordable price points will lead to higher absorption levels.
• Easing pressure on the rupee will also impact the industry positively.

Home Buying Tips

Home Buying Tips

·         -VERIFY TITLE DEED

·         -CHECK ENCUMBRANCE CERTIFICATE

·         -APPROVALS BY LOCAL BODY

·         -RELEASE CERTIFICATE

·         -PROPERTY TAX RECEIPTS

·         -VERIFY THE LAND-USE

·         -CHECK THE SITE

·         -TAXATION

First thing you need to check is
whether the seller has a right over the 
Property. See the title deed of the land to confirm whether the seller
has the full right to sell the land. You can also take the help of a lawyer to
get the deed examined. "A mere NOC from the panchayats or other local
bodies would not constitute approval by the authority."

It is important to verify that the
land is free from legal dues. Sumit Jain, co-founder and chief executive
officer commonfloor.com says, "For this, check encumbrance certificate
for, at least, 30 years. Given at the sub-registrar's office, this states that
the said land does not have any legal dues and complaints."

Make sure that the entire layout
has been approved by the development corporation and local body of the city.
Vijayasarathy, says, "The plan of the layout must contain the seal and
signature of the authority approving the same. Without this seal and signature,
the layout cannot be deemed to be approved."Share Home Buying Tips.pdf - 564 KB Click on the link to know more...

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Real Estate Investment Made Easier in India

An estimated 30 million NRIs living in 160 countries are looking at India for real estate investment opportunities. India has been consistently rising in terms of the quantum of expatriate US dollar remittance for years now from $55.6 billion in 2010-11, $66.1 billion in 2011-12, $67.6 billion in 2012-13 to $ 70.68 last year.

The Indian government recently approved a proposal allowing investments made by NRIs to be deemed as domestic investment on par with resident investments. Thus NRI investment norms have been considerably eased. We use the term NRI here to include OCI cardholders as well as PIO cardholders.

Due to the cascading impact of recession over the years, property prices have plateaued and are now stagnant in most cities in India. Home loan lending rates have been reduced with special rates for women home buyers. Above all, there is no differential pricing for projects whether sold in India or abroad.

A number of developers are undertaking luxury apartment projects and ultra luxury villa projects for globe-trotting Indians accustomed to enjoying the luxuries of life abroad. Such niche homes are marketed through exclusive road shows abroad.

For the average NRI looking to invest in apartments or row houses, the timing is appropriate as pre-launch offers are made by several property developers to minimize working capital needs.  An NRI investor can look for a return of 20-25 per cent on his investment while investing in such projects which takes at least 18-24 months for implementation.  For medium term investors investing in plotted development projects will get a compound growth rate of 25-30 per cent per year.

For those NRIs holding land parcels or inherited properties in cities, joint venture agreements with leading developers would enable them to convert their land into productive and income generating assets.

For those investors looking to invest in leased commercial property, availability of commercial property investment options is limited, particularly of smaller units and the investment cap for commercial properties varies from Rs 5 crore to Rs 10 crore ($770,000 to $1.5 million). The yield varies from 9 to 11 per cent depending on the building, developer, tenant, location, specification and amenities offered in the project.

Investment Norms Eased
The Reserve Bank of India (RBI) has considerably eased investment norms for NRIs/PIOs in real estate. They can buy, sell, gift and inherit immovable property.  The prohibited categories of properties include agricultural land, plantation property and farmhouse. In the event of sale of immovable property, the authorised dealer may allow repatriation of sale proceeds upto two residential units.

An NRI/PIO may remit an amount, not exceeding $1 million per financial year out of the balances held in NRO accounts.  However, the repatriation is subject to production of documentary evidence in support of acquisition, inheritance or legacy of assets and payment of applicable taxes in India.

In a further move to ease norms, the RBI has also clarified that income and sale proceeds of assets held abroad by NRIs need not be repatriated to India and can be retained and invested outside India.

Corporate Group Housing Society

What Made banks to cut lending rates now?

The quick move by the banking sector to slash lending rates after RBI reduced key policy rates has put up a question: Why banks did not pass on the benefits to the consumers instantly when similar decisions on rate cuts? The RBI has cut repo rates by 50 basis points from 7.25 per cent to 6.75 per cent recently, which is a welcome move both for the real estate industry and the banking sector. The RBI has reduced policy rates by 125 basis points cumulatively. Soon after RBI has made the announcement, the country’s largest lender, the State Bank of India (SBI) has cut down lending or base rate by 0.4 per cent to 9.3 per cent. Currently, HDFC’s base rate is at 9.3 per cent and Axis Bank has lowered its base rate to 9.5 percent. Sources said that the government is constantly monitoring the situation of the impact of RBI’s rate cuts in the market. “In fact, there is a pressure from the Ministry of Finance on banks to reduce the rates at which they lend to the industry, and individuals. The banks do not borrow loans from RBI but the banking system depends on deposits so a fluctuation in the lending rates affects the banking sector,” sources told in a condition of anonymity.

The real estate sector was expecting such moves by the banks since a long time but things did not turn out positively. The RBI Governor, Raghuram Rajan was concerned about delay in the monetary transmission of rate cuts by the banks. He also said that “the real estate prices need to come down in order to ease lending norms for home loans.”Such moves also indicate a positive picture and building the confidence level of the consumers in the potential market. It will now boost the investment flow in the sector and increase the sale of unsold inventory stock as well. The banks are usually very cautious while lending to the industry. And, as the demand is less and the macro economic situation is slow in the real estate sector with limited investment possibility, the banks are quite apprehensive in lending the sector. This is a reason why banks maintained a wait and watch approach.

Now as the banks have cut the rates, the business climate may soon clear up and possibilities are that the sales growth will pick up in the near future. We hope that the RBI’s moves to bring down key rates will likely boost investor’s sentiments in the market.

Housing Sector Gets Leg-Up as RBI to Lower Minimum Risk Weight.

Detailed guidelines in this regard are being issued separately, the RBI said in its fourth bi-monthly monetary policy statement. "The RBI's proposal to reduce the minimum risk weightage on individual housing loans for low-cost homes will also help revive sales," said Property consultant CBRE South Asia Chairman and MD Anshuman Magazine said.JLL India Chairman and Country Head Anuj Puri said for the affordable housing sector, "the outlook is nevertheless bright, since the RBI governor has made provisions for lending to this sector to become less stringent and broader in scope".
Lowering of minimum risk weight means that banks will have to set aside less capital for affordable housing loans leading to availability of more funds for the segment.Meanwhile, real estate developers have hailed the RBI's decision to cut key lending rate by 0.5 per cent.

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