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Sunday, October 16, 2016

8 Signs You Are a Hopelessly Ignorant Pune Flat Buyer

Beware! Unscrupulous builders in Pune are targeting ignorant flat buyers:

Wise flat buyers are not booking flats in Pune real estate market for the last many years. That's why a huge inventory of unsold flats is lying around and the property prices are coming down. Result is most of the builders in Pune are in serious financial crunch or are on the verge of bankruptcy and mostly will not be able to complete their ongoing projects.

Add to it the new development rules plus the effects of upcoming RERA and you realize that the huge supply of flats has already made it sure that property prices in Pune real estate market will never increase and many builders would be thrown out of the business.

Obviously, wise flat buyers know that in this situation there is no point in booking a flat at the launch or at the early stage of construction. But when some event like Yashwin Hinjawadi takes place we realize that there are a few flat buyers who are completely ignorant of the realty.

Thanks to Vilas Javdekar Developers, for letting us know what are the signs of ignorant flat buyers!

If you notice these signs in you, I am sure, you can avoid to become the victim of some unscrupulous builder in Pune.

1) Do you believe that the property broker is your friend?

Many builders in Pune are appointing less educated, less intelligent and unemployable youths with no real experience or knowledge of real estate development business to win confidence of the ignorant flat buyers & trick them into booking a flat. Instead of searching a flat on your own if you are talking to these channel partners of the builders, you are an ignorant flat buyer.

2) Are you aware about online scams & frauds used by the cyber criminals to trick you?

The builders' agents launch 'unofficial' websites using the name of the builder or a project or a location and collect your mobile number & an email id. They use this data to trick you into booking a flat. If you are sharing your private information without reading the disclaimer on these websites, you are an ignorant flat buyer.

3) Are you really financially ready to own a home?

Unscrupulous builders know that those who do not have enough money to own a home are easy targets. So, the builder uses 'Lowest Property Rates' '25% Discount on Property Price' 'No EMI till Possession' as a bait to catch the financially weak flat buyers. If you are getting attracted toward this type of 'deals', you are an ignorant flat buyer.

4) Do you know what size of a flat is worth buying in Pune?

As per 2016 rules, 800 sq.ft. and above flat is given to an applicant whose income is Rs. 40,000 per month and above and an applicant whose income is between 20,000 to 40,000 per month can apply for 400 to 800 sq.ft. flat for MHADA low cost houses in Mumbai.

Considering the low cost of land in Pune, someone who earns Rs. 40,000 and above per month deserves to own a flat which is more than 800 sq.ft. in size. So, if you are going to book a flat in Pune which is of MHADA size Mumbai flat, you are an ignorant flat buyer who doesn't know which property is worth buying in Pune.

5) Do you know how builders manipulate property rates?

Quoting low basic property rate for the flat on the first floor and charging for 'floor rise' & the premium for 'the view' are well known tricks of the builders in Pune.

Though it's illegal to sale a car parking, unscrupulous builders in Pune sell it under the name of infrastructure charges.

Builders extort flat buyers under the heading of development charges for electricity, society formation, club membership etc.

If you are booking a flat because the rate is low (Rs. 4,195 per sq.ft.!) and paying premium for floor rise and preferential view (Value Addon Package) and infrastructure & development charges without understanding that you are actually paying the current market rate of under construction project ( 4,800 - 4,900 per sq.ft.!) for the project which is only on the paper, you are an ignorant flat buyer.

6) Do you know that it's illegal to sell flats on saleable area?

Unscrupulous builders in Pune actually sell the flats on 'saleable area' and cheat the flat buyers. Then they mention the carpet area in the agreement and pretend that they have sold the flat as per the law and mislead the government!

In every communication with the flat buyers these unscrupulous builders quote saleable area of a flat (the package price - 2 bhk - 850 - 950 sq ft for 48 to 54 lakhs and 3 bhk - 1100 - 1200 sq ft for 65 lacs max). But the actual carpet areas are very less. For example, at Yashwin Hinjawadi - A 2 BHK of 915 saleable has only 610 carpet area, a 2 BHK of 888 saleable has only 570 carpet area and a 3 BHK Flat of 1135 saleable has only 756 carpet area!

These carpet areas are certainly unsuitable for a home. But that's not all!

Even the saleable area calculation is also unfair & misleading!

Only unscrupulous builders in Pune calculate saleable area in this way - Carpet area of a flat + Carpet area of a terrace x 1.35 / 1.4

A builder who believes in fair business practices never adds loading on the terrace. The loading is added only on the carpet area of the flat. - The right formula to calculate the saleable area is - 1.3 x Carpet of flat + Terrace = Saleable Area

For example, visit Pethkar Projects' website and see the cost sheet of Siyona at Punawale.

When you pay for 888 saleable area when the actual carpet is only 570, you are an ignorant flat buyer.

7) Do you know what is the difference between Municipal Corporation & Gram Panchayat?

Pimpri Chinchwad & Pune have Municipal Corporation. Whereas Maan, Hinjewadi, Wagholi villages have Gram Panchayat.

PCMC & PMC have organization, development plans, source of income, financial aid from the state & central government and they can raise funds from even world bank. That's why PCMC & PMC can develop & maintain basic urban infrastructure which is somewhat suitable for human population.

Against this, Gram Panchayat has very less source of income, insufficient financial aid from the state & central governments, weak organizational structure, no development plan. That's why Gram Panchayat can not develop & maintain basic urban infrastructure. Result is Gram Panchayat can not construct roads, build bridges, buy - process & supply drinking water, can not lay drainage lines & process sewage, can not process garbage, can not develop public utility facilities like gardens & vegetable market, can not have fire brigade & can not prevent diseases. Even mosquito-borne diseases like Malaria, Dengue, and Chikungunya.

That's why when you book a flat in any Gram Panchayat it's very clear that you pay irrational property rate for the flat which has no basic urban infrastructure - like a car without an engine - and put your family's life in danger for your own selfish convenience of commuting distance from your office, you are an ignorant flat buyer.

8) Do you have an ability to avoid emotional trap?

Builders, banks, mass media, friends, relatives & parents have turned a simple basic need of a shelter into an emotional trap.

That's why instead of renting a flat in a developed neighbourhood for a less amount most of the first time home buyers are ready to become slaves of bank for life.

Unscrupulous builders gather the flat buyers in a close environment, block your rational mind and manipulate your emotions in such a way that you stop thinking rationally and take an instant emotional decision.

Very few people have an ability to avoid this type of emotional trap. Like this person -

But i want to highlight the physiological trap created by VJ like on the spot booking without giving ample time to think customers. on same day last moment he published rate and distributed details and asking book flat now itself else never you get this opportunity!

Even though he quoted based 4195/sq ft. on that day which is applicable only on 1's floor, he added floor rise charges and premium view charges which goes around 4800-to 4900 which is near to exiting near by Tinsel project rate. Many people missed this due to large crowd/ mob effect and mass booking psychological effect and fear that i miss the opportunity , sadly I am also victim of that !

After reading you blog & details study of cost sheet , i questioned them some points for which they have no answers on that.

I think this is not good practice at all, this guys saying to decide in 10-20 min and book flat . I heard that every project launching VJ is doing this kind mass booking using this kind of "physiological trap"

Thanks for your valuable guidance on Blog to aware us many points which need to ask builder before purchasing flat.

When you can't avoid emotional trap and book a flat in a event like "Yashwin Hinjawadi", "DSK घ घरांचा उत्सव आनंदाचा!" event at some strategic location or in a property exhibition like "Sakal Big 3", you are an ignorant flat buyer.

Please, beware, unscrupulous builders in Pune are targeting ignorant flat buyers like you.

What say you?

If you know a few more signs of a hopelessly ignorant flat buyer, please, add in the comments.

Related stories:

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2) Take steps to prevent Pune flat buyer suicides

1) The best investment opportunity in Pune - Zero Down Payment. Assured Appreciation.

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  1. Another trap is - fringe villages going to be included in PMC /PCMC. I have already fallen trap to this bait, but would good to be informed that this cannot be a reason for extra high charges!...

    1. True, Prasad. Merger of a fringe village in PMC / PCMC is a trap. Thanks for adding!

  2. Ravi sir, can you please explain us is PMRDA better than a gram panchayat. For eg. Mahalunge, Sus are under PMRDA, does this make PMRDA equivalent to a Corporation or it has less powers than a corporation but more than a gram panchayat

    1. Village Gram Panchayat is a local government. Whereas PMRDA is a development authority for integrated infrastructure development of areas coming under PMC, PCMC & 400 - 800 fringe villages.

  3. Ravi,
    This is indeed one of the most valuable post which is universally true. This once again shows how education & common sense is not linked with one another !

    " If you know a few more signs of a hopelessly ignorant flat buyer, please, add in the comments."

    9. Buying flat without doing thorough LEGAL CHECK of the complete project :

    Legal check is the primary & critical thing which needs to be done even before paying any token/booking amount.
    Apart from sanctions, EC, land records for past 30 years etc. one should also have details about the mortgage. It has been seen that builders mortgage the project, default & then banks/NBFC take-over the project & buyers loose their money as well as their flat & then need to go & fight in court.

    10. Buying flat based on PROPOSED stuff :

    Builders try to sell flat on non-existing stuff which is beyond their control like proposed metro, proposed ring road, proposed airport, proposed IT park, proposed SEZ, project in gram panchayat which is proposed to be merged with PMC/PCMC......proposed stone, proposed brick etc.
    However, the most idiot buyers/yedas are those who buy based on proposed PMC/PCMC water supply, proposed road, LoL. Which tribe do such buyers belong who don't give importance to most basic things like drinking water & road ?

    Apart from this, it is always good if buyers demand a third party certified lab quality tests report for the project of their interest. Builders in almost all cases won't be able to give that as he is least bothered about quality but when buyers start asking such questions, builders will get a clear message that buyers won't be taken for a ride easily.

    1. 1) Legal 2) Proposed development 3) Third Party Quality Audit at the every stage of construction. Thanks for adding 3 important points, TheMonk!

  4. Actually PMRDA was formed to be a far bigger corporation than PMC and PCMC together covering more than 3500 sq km area to streamline development in the fringe areas of PUNE on the side lines of MMRDA in mumbai but sadly the decision has been made without doing enough groundwork and due to this it has become nothing but a sanctioning authority having no uniform rules. It has created bigger mess in the development and planning of fringe areas. Actually these fringe areas were to be included in PMC and accordingly notification was also issued but everything is pending bcoz of political reasons! Nobody cares for common citizens and development of this city!

    1. Very true, Kedar! Nobody cares for citizens & development of the city. Thanks for sharing valuable information.

  5. "Actually these fringe areas were to be included in PMC and accordingly notification was also issued but everything is pending bcoz of political reasons! Nobody cares for common citizens and development of this city!"

    - The merger was due to political reasons & it's pending due to practical reasons.
    The Baramatikars purchased land in fringe areas, built projects, didn't pay a dime to PMC/PCMC but then wanted area to be included in PMC/PCMC limits so that they can get free of cost infrastructure. Nanded City is in gram panchayat but still PMC constructed a flyover which only helps Nanded City & 4 lane concrete road (on land not owned by PMC) till this project from Pune's tax payers money, why ?

    The reason why this merger has been canceled as of now is because PMC/PCMC doesn't have enough resources to provide good infra within the existing municipal corporation limits & adding these new areas would have made entire budget go for a toss. The only people complaining are guntha-mantris & builders having political patronage who wanted to build cheap & sell high. Just for these handful of crooks, why should lakhs of tax paying citizens suffer ?
    Just like Navi Mumbai, let new municipal corporation be formed for fringe areas rather than burdening PMC/PCMC.

    Btw, the Baramatikar goons, CONgress are now opposing Pune airport at Purandar just because they have purchased land at Chakan & wanted compensation in crores from State Govt. Now that their land speculation has gone for a toss, they keep blaming State Govt, PMRDA etc.

    PCMC Polls 2017: Candidates face disqualification if linked with illegal constructions -

    In a first, the election office of the Pimpri-Chinchwad Municipal Corporation (PCMC) has said if any candidate or his close family members are found to have been involved in illegal constructions, he or she will be disqualified from contesting the elections. PCMC poll candidates will have to submit an affidavit to the effect while filing their nomination forms. The move is likely to hit several sitting corporators, especially from the ruling NCP, civic officials said.


    This provision was always there in law but NCP-CONgress never applied this law ? Why ? Because they happened to be major beneficiary in illegal constructions & then regularizing them & providing them infra from the pocket of honest tax paying citizens.

    The citizens & flat buyers are not ulloos the way guntha-mantris & builders want them to be. If someone has bought land, flat based on proposed merger with PMC/PCMC, it's the price they pay for their speculative decision. Neither buyers are asking builders to build in third class location, nor is the Government. So no point in blaming either of them for poor decision taken on part of builders.

    1. Recently I came across a plot scheme in Tamhni Ghat offering at 75k/ guntha. They said that they are committed to buy back the same plot after 3 yrs at double rate & it will be written contract. Meanwhile, they are ready to take up farming activity on plot & the earning would be sharing with owners.

      Can you please guide about authenticity of such schemes? I have observed this type of schemes are offered for low price tagged plots.

    2. Before buying any plot, do get legal checks done thoroughly, not just of your plot but entire project earmarked by the builder. Many builders sell agri land as proposed NA plot, which is pure cheating. See the news of few weeks old below, it's of Tamhini ghat only.

      Demolition comes knocking as pvt players usurp forest dept land :

      If you are a Punekar aspiring for a piece of the verdant hills surrounding the city, please run your checks carefully before you pitch that investment. Investors in Kundalika Valley — a project offering farm plots — ensconced close to the Tamhini Wildlife Sanctuary, were delivered a rude shock on Thursday, when the forest department knocked down several installations at the site, which has encroached on land owned by the forest department.

      The project, spread over 192 acres, offers 240 farm plots of 11,000 square feet each, at the price of approximately Rs 20 lakh. A billboard outside the site proudly offered the clients “clear title” plots.


    3. "committed to buy back the same plot after 3 yrs at double rate & it will be written contract."

      - LoL. Had this been so simple, everyone on this planet would have put money into such schemes ! Please check these links below -

      No such thing as assured returns in realty -
      Beware of builders that promise guaranteed returns. It’s a false promise


      How is Mantri Realty Offering 100% Return in Three Years? -

      Mantri news is 2 years old. Early this year, builder went bankrupt & court has confiscated the passport of builder, former area commander of Mumbai of Lashkar-e-CREDAI-MCHI - Sunil Mantri for defaults.

      Mantri Realty in big trouble as Bombay HC orders seizure of firm's assets-
      The Bombay high court has directed an official liquidator to take physical possession of all assets, books and records of real estate company Mantri Realty.
      The court has also restrained Mantri and the company from selling any of its assets and properties, or creating any third party rights on it. Mantri was asked to deposit his passport with the court, with the HC saying its order should also be communicated to the chief of immigration at the international airport and the regional passport officer. A plea to stay the court's order was rejected.


    4. Thanks for sharing valuable information, TheMonk!

    5. Many thanks for educating us about plot schemes. The Monk!

    6. I strongly suspected this could be some kind of 'Ponzi scheme'.

  6. Since you mentioned about the Pune international airport.
    As the airport is proposed at Saswad, which is just 30km away from Pune.
    Does this mean the Saswad would become the next developed city and people would start investing in real estate at Saswad.
    Does this have any impact on Pune real estate ?
    How many years would it take before people start buying homes at Saswad instead of Pune ?

    1. It's still proposed Pune international airport. Location has been selected, land has not yet been acquired. Let work of airport start & then see what happens.
      Pune airport like Mumbai, Delhi, will also be based on PPP or public private partnership. Till land acquisition is not completed & contract for building & operating the airport is not handed over, this would be nothing but speculation.
      Also, areas very close to airport are not good for residential purposes either, nor it means good quality residential development near it.
      Eg. Kempegowda International Airport of Bangaluru is over 45 kms from city but nothing special near airport from residential perspective.
      So let Govt policy be clear, work on airport on ground start so that there can be some concrete factors to discuss upon. As of now, it's just talk in the air.
      Btw, Panvel real estate prices have fallen despite new Navi Mumbai airport coming up near to it !

    2. As per my information there is huge water scarcity around Saswad area. Also summers are very hot.

      In such situation it doesn't make sense to invest in properties around saswad just coz of emerging international airport. It could be good for people who travel abroad frequently. Also imagine incredible humming sound of jet engine throughout the day & night.

    3. But considering Saswad is just 4-5 KM away from the proposed airport and is already a Taluka place and is decently developed (more developed than the so called developing areas near Pune), will it show some signs of becoming a bigger developed city ?
      Since it's an international airport, many industries including IT may develop in the vicinity which may lead to increasing demand for residential projects.
      What's your opinion on this?

    4. Don't know why discuss in detail of which nothing is there on ground, even notice for land acquisition. And success of airport wherever it is also depends on interest show by airlines to fly from there, which includes charges, facilities, passenger & cargo market etc.
      Btw, see this latest development, LoL.

      Khed steps forward to encash Purandar unease -

      Khed villagers willing to give 1,800 hectares of land for the airport project if Purandar villagers continue stir; proposal forwarded to state government.

      Khed villagers are hopeful that if the opposition from Purandar villagers continues, they stand a good chance to get back the airport. After proposing 1,800 hectares land for the airport, Khed MLA Suresh Gore has put forth the proposal to District Collector Saurabh Rao, seeking intervention from the state government. Shirur MP Shivaji Adhalrao-Patil, who too is pushing for the airport in Khed, has already had a detailed discussion with Chief Minister Devendra Fadnavis about the site.


      And since you talked about IT, this sector has already saturated. Whatever new development will come will be towards Nagpur now which is good as it helps in overall development across the state, reducing migration. And do read this latest interview of VS of Infy where he says emphasis will be on automation, which means don't expect large number of jobs being created as before in IT.

      Only way to counter downward IT spiral is through automation: Vishal Sikka, Infosys


    5. Khed was also selected few years back and everyone rushed. Just wait for next election if no work starts airport might move to Baramati ;)

    6. Currently gov is doing screening work of proposed airport. There are several geo-political, social factors which can affect gov decision to build airport. As mentioned above, politicians are pushing hard for khed, rajgurunagar due to their vested interests in nearby real estate.

      For a common investor or speculator, entry point of RE is skewed since big fishes have already purchased properties in Inception Phase. Prices are already inflated & based on the prospects, prices are inflated further. Common man invests during Development Phase or Exhaust Phase, the point where prices starts to fall or stalls. One can feel prices are going up but most of the time coz of inflation. You are fetch more return by staying invested in FDs or debt securities.

      People with black money component use to provide liquidity in RE, but thanks to gov, with black money sources are drying rapidly, this sector may see non-liquidity ahead. One can consider such investment as 'Dead Paper Asset'.

      From a investor or hoarder point of view, one must evaluate potential investment fundamentally. Do we have proper approach road? What about sources of water? (Saswad is situated on plateau where ground water is hard & prone to less rainfall). Avg temperature during summers, round trip time to reach core areas. Vegetation? etc..

      How can people blindly charge towards investing lacs of rupees based on some news?

  7. Hi. We have 2 1bhk flats one at bibvewadi and another at paranjape forest trails bugaon. We have recently sold the one at bibvewadi for 35L and are looking to buy a 2bhk. This 2bhk will be our final property as we won't have any budget left. We are getting a good 2bhk flat in forest trails. We have heard that bugaon road is going to become a state highway. We are confused if we should buy 2bhk in warje (which will help us retain our remaining 1bhk as investment) or to buy a 2bhk in kothrud buy selling remaining 1bhk as well (in which case there won't be any left as investment) or to buy a new 2bhk here only at forest trails bugaon... Will the bugaon area develop in near future?