Ask your builder for a freebie this festive season

The real estate industry has been suffering for the last couple of quarters because of a slump in demand, high rate of interest, and environmental and land acquisition issues. Real estate firms are facing a cash crunch because of low sales, increasing inventory costs and higher cost of funds. Amidst all of this, the festive season is here and builders are trying their best to woo customers by offering attractive discounts.

Most fence-sitters wish to wait and watch and are convinced that the high interest rate regime and high inflation are here to stay for a few years. These prospective buyers probably have enough funds for their down payment but are reluctant to take the plunge yet. By offering attractive discounts builders want to nudge them to go for their dream home. In this article, we will discuss the schemes offered by builders on homes. Discount from builders come in many ways.

Cash discount

Cash discount is essentially the discount on the price of the home. Mantri developers is offering cash discount on homes. The discount will depend on the price and size of the property. It can be anything between 1 per cent and 3 per cent of the price of the property. This means if a property is priced at Rs 30 lakh, the cash discount can be anywhere between Rs 1 lakh to Rs 3 lakh. This is certainly a good amount to save.

Freebies

Freebies are one more option to attract home buyers. Builders are providing freebies such as a car, stereo, installed air conditioner, modular kitchen etc. depending on the price and size of the property. Freebies have been quite an attractive option for some people especially if they include cars or electronic goods. Some also offer free parking space.

Waiving stamp duty

A few builders have on offer a waiver of registration and stamp duty. The overall discount is about 2 per cent to

5 per cent. This is a good amount. A person buying property worth Rs 50 lakh will be able to save about Rs 1 lakh to Rs 3 lakh. Nirmal Lifestyles, a Mumbai-based builder is offering such deal.

Group buying in festival season

Companies such as Group Booking (www.groupbookings.in) are offering double discounts to home buyers. This works at two levels. Builders provide discounts on their own and also offer a group discount to group buying companies that negotiate on behalf the customers to obtain more discounts. The builders also find it lucrative because they get a large group of customers without spending any money on customer acquisition.

A point to note: There are many builders, who offer discounts when you negotiate with them in a face to face meeting. These builders do not advertise in newspapers. Buyers should discuss the possibility of discounts with builders in this festive season. Many of them are open to offer discounts and chances are strong that you are likely to bag a good deal.

DO REMEMBER

First, do your research on the properties. Go for it only when it suits you. Buying a home is your biggest decision and you must be extra careful. Buying a home just because one is getting a discount does not make sense if you do not get what you want in a home. It is necessary that you check the location, builder's reputation, distance from essential amenities etc. before going ahead with the purchase decision. Opting for a good discount should not come at the cost of convenience.

Second, see if the freebies are really worth it. Many a time, the freebies are useless because you already own them. You should rather opt for cash discounts. You can negotiate on a different set of freebies if you think what is on offer does not suit you.

The festive season is usually good for shopping because many businesses offer discounts.

This year, homes have also been added to the top slots in the discounts on offer list. Use this opportunity sensibly after the due diligence is done.

The author is CEO, BankBazaar.com

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