Parameters to Check Real Estate Company’s Reputation

  • @kw
  • 22 Apr 2020

Investment in Real Estate has become a challenging decision to make. The prices are sky rocketing in metro cities and the choices are now spread to outskirts of metro cities and more so because of affordability and improved connectivity of these sub-urban area with metro cities. These days many top real estate developers in India are showing more interest  to build residential and commercial complexes in the fringe of Metro cities like , Delhi, Kolkata, Mumbai, Chennai, Bangalore  etc. Buyers normally prefer to buy a flat in a project under construction as they are relatively cheaper than a ready to move flat. But this requires a complete background check of the Real Estate Company. In recent year there have been cases where top real estate builder having experience of building over 150 projects all over India has failed to complete project and large number of customers have been duped. Therefore, buyers have become very cautious as buying an apartment in under- construction project is riskier as it depends on builder’s competence and resources. There are some best real Estate builders in Delhi NCR. Development in Delhi NCR started from the fringe are of Delhi in Gurugram , Noida, Ghaziabad and slowly expanded and covered a vast area with rapid industrialization , connectivity of all these area with Delhi Metro rail network, National high ways, elevated express ways. All these development attracted many PAN India real estate builders to concentrate in Delhi NCR. In Gurugram DLF had the first mover advantage and they have developed an elaborate DLF Township with mega Malls and also made their presence in other parts in Delhi AND Delhi NCR. There are other builders like Godrej Properties who have been ruling the market for quality product manufacturers. Now the main issue at this juncture is to understand how does buyer asses other Real Estate Builders from Delhi NCR who do not have the PAN India experience and long years of track record like Godrej of Sapoorji Palonjee who are in the market for over a century! In Delhi NCR at present Ghaziabad, Greater Noida, Noida are highly potential area for Real Estate Construction activity. In Ghaziabad most developing area is Raj Nagar Extension where KW Group has completed KW Srishti as housing complex with eleven towers with flats of 2/3/4 bhk having affordable prices. KW Group which is considered as the most trusted real estate developer in Raj Nagar Extension in Ghaziabad. KW Group is in the advance stage of building a mega commercial project on NH 58 which has already been booked by large number of major PAN India retail brands.

It is therefore very important to analyze each parameter to check the safety of selecting a Real Estate builder before finalizing to purchase a property in under construction project 

1, Ground Report: It is though important to do some searches on the internet through customer feedback, blogs, news report, property sites etc. We however would suggest for field research. Talking to an old customer in the project or a project by the same builder and taking feedback from some local brokers will be a good idea. It may also be some useful source of information, if you ask a contractor in the project. When you receive information from multiple sources, you may correlate answers and evaluate the reliability of information received. 

2. Track record of the Company: It is always better to buy from an experienced builder with good track record. A reputed builder will have more capable staff with every processes in order to make the customer feel comfortable. It is always better to avail a builder who lacks in transparency. A reputed builder will definitely have membership of some industry association like Real Estate Developers Association of India (CREDAI), or Builder’s Association of India (BAI), and also has at some point received appreciation from State Govt. agencies, involves in CSR activities for good social cause.

 3. Quality Standards: Physical verification may reveal some details on quality aspect, it may be recommended of you take a profession service of a Civil Engineer or an architect before finalizing your purchase. The International Organization for Standardization\'s 9001:2008 certification criteria for a quality management system is based on eight principles, including customer focus and satisfaction. An ISO 9001:2008 audited and certified builder is therefore expected to be more professional in their approach.

4. Check reports by Reputed Rating organization: The CRISIL Real Estate Star Ratings (Crest) provide city specific assessment of real estate projects and can help you compare and identify quality projects within that specific city. These organizations also have a National Developer Ratings on the basis of various parameters such as good track record of transfer of clean title, maintain legal and construction standards and timely project completion. Only reputed builders with sizeable project size and experience tend to get their company registered with CRISIL.

5. Financial Stabt is Ility: This is the most important of all parameters. In the recent number times we have seen that a number of Real Estate Companies have failed to complete their projects due to delay in construction and even in some cases financial manipulation have duped the buyers. It is that the company is over-leveraged? Get the balance sheet analyzed by a financial expert. See whether the company has too much debt and unable to make repayment of their loan. Immediately reject the builder from your list especially if it is an under construction project.

I have extracted some relevant points from an article in Economic Times which is as follows: 

” Some listed builders would have their financial details uploaded on their website. For others, you can contact the concern Registrars of Companies (ROC) office for details. The Ministry of Corporate Affairs’ website (www.mca.gov.in/MCA21/) will also have the details. Log on and register yourself to view all company documents under the \'view public documents\' section. The site would ask for additional information such as company CIN/FCRN, registration number, registrars of companies (ROC) detail “.

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