We were discussing about pre-booking of property and what we are required to know and consider while doing so. In part I of this series we have discussed the difference between pre-launch and soft-launch properties, the two kind of properties available for pre-booking, and how the developers actually market them. In this part, we will mainly talk about the advantages and disadvantages of booking such properties. So let’s begin with advantages.
Advantages of pre-booking a property:
1. The property available for pre-booking is generally about 15-30% lesser priced than the ready-to-possession ones.
2. The buyer has the liberty to opt for construction-linked payment plan, wherein one do not need to shell out the entire amount at one go and will pay according to the stage of the construction.
3. Normally, the floor-rise price hike is exempted if one is pre-booking a property, therefore one can choose the desired floor without paying any extra amount.
Disadvantages of pre-booking a property:
Now it’s time for disadvantages and I am afraid they are a little more in number than the advantages. Let’s check out:
1. The main disadvantage is that the completion of the property can be delayed. So if you have time-constraint it may not hold very well for you.
2. Though the chance is little yet consider that the original construction plan upon which you have chosen the property may change a little or vast in due time.
3. The requisite approvals from relevant authorities may still be pending till the actual construction starts. So there is always a little risk that they may get cancelled.
4. The service tax of 3.5% that is levied on the property under construction are most of the time very cleverly passed on to the pre-booking customers.
So, now that we already know about the advantages and disadvantages of pre-booking, the main question is whether one should go ahead with such venture or not? Well, there are mainly two circumstances when you should consider pre-booking and they are:
1. You do not have enough funds or you are actually chancing upon a property more in value than that of your budget.
2. The property you are buying is for investment purpose and therefore delaying its completion would not hamper your present residential status.
So, if you are afterall going ahead with the pre-booking option, there are various points that you should evaluate and consider and post that make a decision such that you can minimize any risk to almost negligible.
In our next post of this series, we will discuss what the considerations you are required to make while pre-booking a property.