Every person has a desire to own a place they can call home and make that dream a reality, many individuals are willing to go above and beyond. However, sometimes they take the incorrect turn, which results in them being lost.
People make the mistake of choosing the incorrect real estate developer all the time, and they end up deeply regretting their decision later on.
It is possible that a person will not be able to regain control of his property even after time has passed, particularly if the land in question has been unlawfully utilized for development.
Hence, it is crucial to make an informed choice when choosing a real estate developer. Scams have become commonplace across Pakistan and even though people are aware of these cons, they continue to fall victim to them.
Be very vigilant if you want to purchase a home that is still in the development process. Do not rely only on the statements made in the property’s advertisements and marketing campaigns.Â
In this blog, we have collected a list of criteria that you ought to take into consideration to know the genuineness of a real estate developer so that you may spare yourself from the consequences of real estate scams.
This blog will also help you to explore legal real estate projects in Pakistan.
So, let’s get started!
See the Track Record
It is in your best interest to purchase from a seasoned real estate developer who has a proven track record of timely deliveries. The renowned real estate company is likely to take a more professional approach, with established procedures and operational systems.
In addition, you may look at their track record to see how successfully the projects they worked on in the past have been carried out.
Look Out for the Ground Report
You may conduct a search on the Internet by entering the name of the firm because customer forums, blogs, news stories, property sites, and other types of websites often include a significant amount of information about the property.
Despite this, conducting studies in the field is still strongly recommended. Talk to local brokers and customers who bought apartments in older developments, as well as consumers who bought units in older projects.
The current market price of the builder’s completed projects and how they compare to the prices of similar projects by the builder’s competitors in the same geographic area is another measure of the builder’s status. You need to make sure that the contractors have the proper qualification.
Quality Certificate
The requirements for a quality management system to be certified to the 9001:2008 standard established by the International Organization for Standardization are based on eight concepts, two of which are customer focus and customer satisfaction.Â
Because of this, a builder that has been audited and certified according to the standards of ISO 9001:2008 is likely to take a more professional approach, and it is a good idea to verify this information before deciding on a home project.
See the Financial Statements
Is there too much debt for the company? Obtain a copy of the firm’s balance sheet, and if it reveals that the company is saddled with an excessive amount of debt or unable to pay back its loans, forget about investing in the project. Several mentioned builders provide their financial information on their respective websites.Â
If you need assistance with anything else, you may get in touch with the relevant Registrars of Companies (ROC) office. The information may also be found on the website of the Ministry of Corporate Affairs. Sign in and complete the registration process to see any corporate papers under the “view public documents” section.
Learn as much as you can about the developer’s cash flow and the amount of debt they have. In the case of developers that are listed on a stock exchange, this data may be found in their annual reports.
However, in the case of unlisted developers, it is difficult to obtain these statistics; thus, you may need to inquire about them directly with the developer.
Because there are not enough rules in place, construction companies often spend the money that was intended for one project for another.
Therefore, it is possible that your builder applied for a loan under the name of the business that was established to carry out a prior project, and as a result, the organization that is being used to carry out the present project may display no debt. You can’t afford to be careless with these particulars.
Check their Ratings
The ratings take into account the track record of the developer in completing projects as per the specified requirements, as well as their capacity to transfer clear titles within the allotted time frame. Track record, organizational, and financial capabilities are some of the criteria that are used in their evaluation of real estate developers.Â
They give the developer a grade on a scale of five points, ranging from DA1 (Excellent) to DA5 (Poor) based on how well they execute on these characteristics (Poor). A higher grade indicates that more confidence is held in the developer’s ability to deliver projects on schedule and in accordance with the quality criteria that have been agreed upon.
When determining the ratings, both qualitative and quantitative aspects are taken into consideration. Quantitative considerations include the track record of the developer in legal matters, the quality-testing methodology, the scale of previous projects, the rate of delivery, and the developer’s financial health.Â
Commitment to safety and after-sales service, after-sales service, market reputation, organizational structure, and management quality is the qualitative elements. Hence, choose developers who have received good ratings.
Bank Loans
The banks conduct significant due diligence on a project before issuing the lending capacity needed for it. Not only do they determine whether or not all approvals are in order, but they also evaluate the builder’s profile.
Therefore, it is a good idea to find out whether or not the project has been approved by major financial institutions and home finance businesses for purchasers to receive loans.
Read the Contract
You should not rely on verbal commitments. Request that everything is provided in writing by the developer. Check for specifics such as the payment terms, the date when possession will be expected, and any penalties for a delay in possession.
The sales staff will often present the buyer with a pre-written agreement. The purchaser is responsible for ensuring that all relevant information is documented. In that case, the buyer has the absolute right to request the inclusion of things that are significant to him as well as the clarification of any ambiguous regions.
You are required to save a copy of the agreement because if legal action is required, it will act as the primary piece of evidence. In addition, one has the option of hiring a lawyer to verify the property’s title and examine the paperwork required for additional permissions.Â
Search for Reviews
Finding out what other people’s experiences have been like with a certain real estate developer can have a significant impact on your choice of company. To gather information on the company, we strongly suggest that you make use of the internet and other social media platforms.Â
For example, if you are looking for information for a house for sale in DHA, Karachi, you might land on a fair amount of data that you can use to make a well-informed decision.
Check out the list of finished projects, the track records, and the consumer feedback regarding the work that has been done in the past. Make sure that the real estate developer you choose is a member of at least one real estate organization.
This should not be considered the least important step. This will serve as evidence that the organization is legitimate.
Developers have committed title fraud to steal money from unsuspecting buyers to line their own pockets. The developers secure the forged title deeds for the land that is in question, sell them to the purchasers, and then quickly leave the area.
Even though these are the criteria to evaluate a builder’s reliability, you still need to do thorough research on the project and review all of the papers to make an investment that is both secure and fruitful.
