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Monday, February 9, 2009

Convince the builder to waive off the floor rise, get free parking & amenities - Ramesh Jogani, MD, Indiareit Fund Advisors of Blue Ridge Hinjewadi

So we should buy now or not??..confused article:

I had a great time reading Tinesh Bhasin's article Does it make sense to buy a house now? and interesting, insightful discussion on rediff.com

joydip bhattacharya says that the article is confusing and don't give answer to the question "Should we buy now or not?" According to Harshavardhan NM it's Flip flop article and "author is not sure about whether "to buy the property or wait?"

For me, there was no 'confusions'. Because i was not looking for the answer. For me, "To buy or to wait" is not a question at all. As a real estate salesman, i know that the home buyer who actually books a flat, always follows his own personal and private time table. He looks 'inside' for the answers. He takes into account the market conditions but the timing is always his. This blog is for him. Where i share useful and interesting info about buying home. For example Mr. Ramesh Jogani's point.

A good opportunity to get the best deal:
However, if you need to buy and have already found a house that fits your budget, this could be a good opportunity to get the best deal. For instance, you can convince the builder to waive off the floor rise, get free parking and other amenities. "All these will add up to much bigger discount," says Ramesh T Jogani, managing director, Indiareit Fund Advisors, a real estate fund.
I liked this point because Ramesh T Jogani plays important role in Flagship Infrastructure Pvt. Ltd., promoters of Blue Ridge Hinjewadi. Besides, newly reduced property rate of Rs. 3,500 per sq.ft. if you could 'convince the builder as Mr. Jogani suggests' you may be able to get the 'launching rate' of Blue Ridge Hinjewadi!

I think one should follow Mr. Ramesh Jogani's advice while negotiating the property rate at any project. With one small change.

Generally, when you visit the site office, salesman's first question is "What is your requirement? 2 bhk or 3 bhk?" Tell him what you are looking for but don't ask the property rate or start negotiations at this point of the meeting.

First, finalized the flat number. Tell him to keep it on hold and give you some time to consult your spouse, your astrologer and your neighbor's wife.

After second or third meeting, when the salesman is sure about your intention to book the chosen flat, start the property rate negotiations. At this point, the salesman is prepared to offer his lowest possible rate. But he will offer it only when you open your cheque book but hesitate to take out your pen to write the the cheque.

Keeping the cheque book open, you refuse to accept his pen because you are waiting for the lowest rate and not for the pen. When he offers his last best price, you take out your pen, ask for the piece of paper and instead of asking for the free parking and other things, multiply saleable area by the negotiated property rate and give your offer.

Now, it becomes builder's job to convince you to pay for the parking, floor rise, MSEB and the amenities. Ask any salesman, it's always difficult to convincing the property buyer to pay for these charges. So generally, he tries to avoid talking about these charges and focuses on discussing any property buyer's favorite topic, the property rate. You revers the game by playing his cards.

However, do not expect him to give up and accept your offer in this meeting. Salesman will tell you that he has to talk to his management about your offer. With a serious face, appreciate his professionalism and offer to give him a cheque of the booking amount to convince his higher authorities about your commitment. Certainly, the salesman will not accept your cheque because now, he is sure about your booking but not sure about his boss.

If you do this skillfully, may be in the next meeting, while accepting your offer, builder will convince himself whichever way he finds it comfortable for him and he will pat his back for 'getting' your booking!

Point is, when it comes to "convincing the builder," you have to accept that only he can convince himself. You can't! Even if you are from Infosys and your group has 100 members who are going to book with you!

You can create only a favorable condition and inspire (means compel - force) the builder to convince himself to accept your offer.

What is your take on the property rate negotiations?

As a real estate salesman, i find it difficult to understand how property rates can come down by not booking and waiting for 6 months or for an year or 2!

I have seen that property rates went up because people kept on paying increased rates. As more they paid, rates increased more. Same way to bring down the rates, property buyers have to negotiate and book at a lower rate.

What do you think? What is your experience of property rate negotiations? Please, share your views in the comments. (Comments Policy)

What is the ideal Price in a city like Pune?

joydip bhattacharya has raised this question. He says:

Can someone tell me what should be ideal price in a city like Pune.....

Not at all a Metro city...
Poor infrastructure compare to city like Chennai,Delhi.
poor Air connection.
very high price
very much dependent on Mumbai for many aspects.....

With my understanding here a 3 BHK flat(around 1450 sqft) should not be

Baner : 28-32 Lacks
Aundh : 28-32 Lacks
NIBM : 25-30 Lacks
Deccan: 40 Lacks
Kothrud: 32-35 Lacks
Kalyani Nagar : 30-32 Lacks....

all of puneites input is requested

I think, you will like Arun Srinivas' answer. He says:

I was surprised to find that prices in Pune were much much higher than that in Blore. Even the rentals are higher in Pune. My estimate is as below:

Baner: 20-22 Lakhs
Aundh: 22-25 Lakhs
NIBM-Kondwa: 20-22 Lakhs
Deccan: 28-32 Lakhs
Kothrud: 22-28 Lakhs
Kalyani Nagar: 22-25 Lakhs

If Baner is 20 -22 Lakhs then Kothrud can't be 22-28 Lakhs. Kothrud should be 40 - 45 Lakh! Why? Because, i stay in Kothrud!

Point is, property buyers' perception plays important role in deciding the property rate of the area. But we give all credit to the builders! What say you? Don't you think we should honor the property buyers too? Please, share your views in the comments. (Comments Policy)

Feel free to call me:

I enjoy talking, sharing my views and giving advice about buying property in Pune real estate market (so, i do not charge anything for the first 5 minutes!) Call +91 98600 44110

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  1. Good one! Unfortunately, I've already booked a flat. But, did not have an agreement done yet, due market/job uncertainties :).. Can I negotiate now on the prking,amenities,mseb etc.? B'cos I found, they cover around 8-10% of total value of the flat.

  2. # ref: "did not have an agreement done yet, due market/job uncertainties :).. Can I negotiate now "

    Yes, you can! According to Rohan Builders you can negotiate even after signing the agreement! Last date is the date of possession.

  3. Ravi,
    Need your help, I booked an 3BHK apartment in Kothrud area last year - May 08 (Gudi Padwa) at the rate of 5800/- per sq. ft.
    Possession is still faar away but the prices in this area seems at bit lower end. What should I do now?

  4. In my view, for a 3BHK of approx 1400 sq. ft. rates in pune should be -

    Baner: 18-22 Lakhs
    Aundh: 20-24 Lakhs
    NIBM-Kondwa: 14-18 Lakhs
    Deccan: 25-28 Lakhs
    Kothrud: 18-22 Lakhs
    Kalyani Nagar: 18-22 Lakhs

  5. # ref: "3BHK apartment in Kothrud area last year"

    - Renegotiate your rate! Every builder is open for the renegotiation of rate. It's better to renegotiate than cancellation.

    -However, your builder in Kothrud may not be open for the renegotiation. He may not accept that rates have come down!
    -Better do your research and collect proofs before you negotiate.

  6. # ref: Baner: 18-22 Lakhs
    Kothrud: 18-22 Lakhs

    - Certainly, you are not from Kothrud!

  7. In my view, for a 3BHK of approx 1450 sq. ft. rates in pune should be -

    Baner: 20-22 Lakhs
    Aundh: 25-30 Lakhs
    NIBM-Kondwa: 20-22 Lakhs
    Deccan: 50-75 Lakhs
    Kothrud: 35-42 Lakhs
    Kalyani Nagar: 35-45 Lakhs

  8. # ref: Baner: 20-22 Lakhs
    Aundh: 25-30 Lakhs
    NIBM-Kondwa: 20-22 Lakhs
    Deccan: 50-75 Lakhs
    Kothrud: 35-42 Lakhs
    Kalyani Nagar: 35-45 Lakhs

    Perfect! Realistic! Let us - fight - negotiate for this!!

  9. #Perfect! Realistic! Let us - fight - negotiate for this!!

    Ravi, I do not think this is realistic range, no way.

    I agree with this range

    Baner, Pashan: 15-18 Lakhs
    Aundh: 18-22 Lakhs
    Pimples: 14-18
    NIBM-Kondwa: 14-18 Lakhs
    Deccan: 25-28 Lakhs
    Kothrud: 18-22 Lakhs
    Kalyani Nagar: 18-22 Lakhs
    Viman Nagar: 15-18

    I am sure most of the buyers can not and will not pay more than this no matter what existing owners in Kothrud or Aundh say. When one is out for selling, only he will see this picture. Rest are paper prices only.

  10. Any one knows what is the rate in Hadapsar near Magapatta City.

  11. the rates people here are expecting don't seem to be realistic to me. May be they are realistic for new properties to be bought from the builder, but not for buying in re-sell.
    For example I booked a flat in Baner area, measuring, 1460 sq. ft. at 2100 /sq. ft.
    So the cost of the flat works out to 33 Lakh including parking, MSEB Registration etc. Add 1 lakh of interest per annum to that for 3 years. so the total cost to me for that flat is 36 lakh. Even if I want to sell it at no profit, I still can not sell it below 36 lakh, of course unless I can not afford the EMI anymore and getting rid of it is the only way to salvage some of the money invested in it by me).
    I'm not even talking about the rates of anywhere near 3000 per sq. ft. or 2500 per sq ft.
    so please can someone explain to me how can someone get a 3 BHK flat of 1450 sq. ft. at 20-22 lakh in Baner area.

  12. Rates in Magarpatta are around 3000 for ready possession/resale ones .

    Outside Magarpatta,in Hadapsar it should be around 2700 Rs.

    At Manjri in Hadapsar, Kalpatru has 1850 Rs rate.

    I think rates at Magarpatta are going to go down since , I see many resale ones as well as new ones coming up.Wait till you see 2200-2500 Rs/sq.feet flats.

    The quality at Magarpatta is not good (what I have heard about new flats) please beware.Also there are many society issues there like you cannot have your own cable dish etc etc

    Let us know what offer you got in enquiries.

  13. # ref:
    "Baner, Pashan: 15-18 Lakhs
    Aundh: 18-22 Lakhs
    Pimples: 14-18
    NIBM-Kondwa: 14-18 Lakhs
    Deccan: 25-28 Lakhs
    Kothrud: 18-22 Lakhs
    Kalyani Nagar: 18-22 Lakhs
    Viman Nagar: 15-18"

    - You may be right! From 2003-04 i am doing an informal survey to find out the entry level budget of the first time home buyers, every year majority says 15 - 20 lakh!

    - In 2003, in this budget you could get not only a flat but even a row house.

  14. # ref: " rate in Hadapsar near Magapatta City."
    Rs.3,000 to 4,750 per sq.ft.

  15. According to me the rates should be for a 3BHK of approx 1250-1300 -

    Baner: 19 Lakhs
    Aundh: 20 Lakhs
    NIBM-Kondwa: 15 Lakhs
    Deccan: 22 Lakhs
    Kothrud: 18 Lakhs
    Kalyani Nagar: 20 Lakhs

    Essentially, I am saying that any rate increase post 2003 was pure bubble and should be deflated COMPLETELY.

    More importantly maintenance of a 3 BHK flat all over Pune should be brought in the range of Rs. 700-1000 depending on location and amenities. There should be nothing outside Rs. 1000 pm.

    If B'lore rates are LOWER than Pune, that's a very good indication that Pune builders created a monster of a bubble here, I hope this monster swallows its creators to teach them a lesson of a lifetime! Many a ordinary folk have been robbed of their lifetime savings due to the crazy rates in the last few years.

    Sir, you are getting lots of good data points on user expectations in these Comments. May I request you to collate it and post it on new post, along with your expert comments. Thank you very much!

  16. Ravi,
    Thanks for your reply on Kothrud rate. i will surely do a research before taking a next step.
    I am bit worried, because I don;t think I can make it any more, so many lay-offs in my company, I don't know when the day for me comes.

  17. Hello Ravi
    In your previous blogs (08th Jan. 09) you had informed that you have personally requested PBAP to quote the lowest rates & Mr. Jain has informed you that the rates are reduced in range of 10 to max 30%.
    Buy still the same is not yet reflected in the market.
    Do you know any projects which have reduced the rates to 20-30% in areas like Baner & Wakad or in any corner of PUNE
    Please can you collect the data from Mr. Jain as he must be definitely aware of some projects of PBAP members who has reduced rates in tune of 30% !!!
    This data will definitely help the real home buyers.

  18. @Anon
    Thursday, February 12, 2009 9:58:00 AM IST

    Looks like Lalit kumar don't have answer or Ravi has not requested this data...this is the single most Sales trick helped this lobby to increse rates - be united behind the seen but don't let buyrs organised..tell diff stories to each buyer, don't diclose discounts openly, treat every customer a new Bakra. But nore more now..enough if enough. All buyers are well organised / in touch and learning about markets and also worried abt jobs

  19. # ref: "In your previous blogs (08th Jan. 09) you had informed that you have personally requested PBAP to quote the lowest rates & Mr. Jain has informed you that the rates are reduced in range of 10 to max 30%."

    # ref: "Looks like Lalit kumar don't have answer or Ravi has not requested this data."

    Blog post is mine.
    How can i request?
    "Chairman" had requested to the members of his organization.!
    Informed to the press!
    Not to me, personally!
    By asking for data, I thought, you were jocking!
    If you read my posts, i believe in negotiating hard not in waiting for the rate cuts.
    Because property rates are always negotiable!

    # ref: "All buyers are well organised / in touch and learning about markets"
    that's the intention of my blog!
    Please, share your info with others and express your views.
    Sorry about jobs.

  20. Hi Ravi,

    Am going to take a 3BHK flat in Magarpatta at 3250/sq feet.The total comes out to be around 49 Lakh.IS this ok ??? Please suggest .

    When asked to reduce the rate the builder says that the rates are already reduced.Also can you please let me know what are the society issues in Magarpatta ?
    Appreciate your help.


  21. # Ref: "3BHK flat in Magarpatta at 3250/sq feet."

    -Sounds good, Smita! Considering that official property rate, published on the website (www.magarpattacity.com) of Laburnum Park is 4,750, Sylvania and Trillium is 3,750 rs. per sq.ft. your property rate rs. 3,250 is good.

    # Ref: "society issues in Magarpatta?"
    - Sorry, I didn't get you, what do you mean by "society issues".

    My general impression is good. By good what i mean is property buyers have a role to play in the society. Township is maintained and run very well.

    Rest of the issues, if any, are always manageable. Considering that "no issues" is impossible, what you face is basically originates from the attitude and communication. For example "after sales service", "general repairs".

    In real estate there is no "service orientation". You have to keep this mind when you book in any project and be prepared to deal with it.

    Better look around, visit few residents and get the feel!

    Smita, thanks for sharing good news. Congrats and best wishes!

  22. 3250 is the official going rate at Magarpatta. I was going to book here at 3250 but held back as there are many brand new resale flats available at Roystonea at far lesser rates. Not the best value at Magarpatta IMHO.

  23. what is the rate in Manjri solapur.. any one have idea

  24. Ravi

    I went to magarpatta they said rate is 3750/- they were not willing to come down. Earlier smita told about 3250/- it is not even near it.

    Can you help me with the exact rates in magarpatta.

    Thanks & Regards
    Ankur Sharma

  25. 3250 was the rate at least till the start of last week. I am surprised that they raised the rate back to 3750.

  26. Hi,
    I am buying a 2BHK flat in shivranjan Towers Baner.
    What shall be pe seq/feet rate to make a deal.

  27. i am interested in buying 1200-1500 sq. flat have 3 bhk in pimpri/chinchwad area ready possession or resale flat/row house/ pent house etc.