Pros and Cons of buying property at 'pre-launch'
Pre-launch is a phase during which a certain period of time is denoted at the beginning to promote the new business opportunity or in the case of real...
Pre-launch is a phase during which a certain period of time is denoted at the beginning to promote the new business opportunity or in the case of real estate, a new set of properties. A huge budget is spent during pre-launch on advertisements and marketing.A
The entire purpose of pre-launch is to attract potential investors, business partners and end users through different one-time-offers. The pre-launch offers are run for a limited time. The advantage of pre-launch is to spread the word regarding the new opportunity as quickly and efficiently as possible so that the business can get off to a good start.
Most of the time in real estate sector, the developers before laying the foundation stone, start the pre-launch advertising. These developers try to attract the investors and first time buyers, so that they can sell off most of the properties in the project. Some of the builders, who are short of capital, start the construction work as and when he gets sufficient funds from the buyers.
This is where one has to be cautious, because a project may never see the light if a developer is unable to sell enough flats or properties in the yet to be launched project. Hence the investors and developers must see the track record of the company and the approvals for the project.
For attracting the buyers, a developer normally displays the blue print of the project done by an architect at the construction site and in the newspapers. Since, the construction work as not yet started, the developer offers huge discounts to the buyers. A Just buying property by looking at a blue print is a risky affair, because the builder has yet to get approvals from the government bodies. In such cases, the reputation of the developer and earlier projects completed matters a lot.
Some of the builders get tied up with banking institutions offering home loans and thus giving any opportunity to the buyer to make the payments as the construction work goes on. A In case of property, one has the excitement to acquire the ownership at quite low rates; however, one should take every possible precaution, take a look at the past record and reputation of the developer/builder and only then take a call. In real estate, pre-launch essentially means raising money from the investors for the projects that are yet to have all the required approvals. Fundamentally, even the foundation stone of the projects haven't been laid when the selling of the properties start under pre-launch stage.
So, if basically there is no legal action that can be taken in case a property is purchased at pre launch stage and does not get delivered within estimated time frame. Are there any takers for pre-launch property and if so why? According to a survey conducted by the Makaan.com when the prospective customers were asked whether they would be interested to buy a property at pre-launch stage. Surprisingly, 72 per cent of the people said that they would opt for property at pre-launch stage.
Reasoning for this can be that investors and first time buyers are often lured by the significantly low prices that are on offer during this phase. Generally and by the current standards, the pre-launch price of any property is 5-10 per cent cheaper than the price after the actual launch. However, after this transaction the investor often does not have an enforceable right over the property.
On the other hand, in the survey, 25 per cent of people said that they would not risk making a purchase during the pre-launch stage as the number of approvals that any new real estate project has to acquire at present time makes the timely possession of the property highly uncertain.A Buying a home is one of the most significant financial investments that one ever makes; therefore, it is only advisable to do a proper market research and survey prior to finalising anything.
A realty project may never see the light if a developer is unable to sell enough flats or properties during the pre-launch stage, hence the investors and buyers must see the track record of the developerA