How to see technical details and estimate market price of an apartment?
Finding technical details of the property
Estimating valuation & total cost
There are various aspects of buying a home which you should definitely consider before making this big move of your life. In this article, I will be more focussed on how to get details and latest market price of of apartment of your choice.
Searching for the RERA number
With MahaRERA in force, it shouldn’t be hard to get the RERA number of the property of your interest. You can just run a web search by the name of the society that you are interested in or you can simply ask the salesperson to give you the RERA number. Once you have the RERA number, it is pretty easy to find the exact address and survey number. Even if you can’t find the survey number in the ‘address’ section of the RERA page, scroll down and bit and you’ll find the Project Layout pdf. This pdf will have the exact survey number mentioned in the plan that has been passed by the component authority such as PMC/PCMC/PMRDA. The RERA page gives you a few important details about the project. Whether the building is sanctioned or proposed? Is the land owned by the developer or is it a JV? Are there any ongoing litigations related to the project? An exact blueprint of the project layout as well as the engineering drawing of the apartment. Always look for the floor plan as well as section view. Floor plan gives you a top view and exact area of the flat. Section view gives you the clear height between floor and ceiling. It is important to get an idea about the overall volume of the flat, specially if you are tall. Some reputed builders also upload the overall cost estimation of the whole tower and quality process ratified by a chartered civil engineer who is an expert in real estate project valuation. It also mentions the most important detail of “Proposed date of completion”, this gives a good idea about when you’ll actually get the keys to your dream apartment. If the builder is not uploading these crucial details, you might want to reconsider your decision to move ahead with that builder.
It is very important to confirm the exact dimensions of your flat, most of the times people are only focussed on carpet area and ignore the floor to ceiling clear height. In my opinion, a flat’s height is as important as the carpet area. After all, it is the volume of apartment that you buy, not the two dimensional carpet area. Builders need to follow the overall height criteria from the municipality, if they have the FSI in hand, they try to fit in as many slabs as possible. This is resulting in less apartment height over the years. 15 yrs back it was a given thing that you’ll get 10 ft clear height, then 9.5 became the standard, then 9 and now some builders are resorting to even 8.75 ft of clear height. This is ridiculous and govt should step in to stop this trend. I have recently cancelled booking with a builder due to various reasons but flat’s clear height was one of the main reason. If the side view of flat is not available on RERA website, ask the builder to provide it to you.
Searching for the Ready Reckoner (aka RR or Circle Rate)
This will give you the current FY’s state government-mandated rate for a given real estate property. You need to choose the correct option while navigating the website because, for the same survey/gat/hissa number, the rate for land, residential, commercial, office space, etc will defer. This is the rate below which a registration deed can not be done. Govt is telling you that you can’t buy/sell a property below this minimum rate. This is a significant data point because this plays the most significant role in the valuation of property in any given area. For calculation of TDR, this rate will be applied to builders and you guessed it right, the builder will extract the same from buyers. Usually, the Maharashtra govt. revises it annually.
Valuation of the property - via RR rate
Now, based on the Ready Reckoner rate, there is an elaborate method to calculate the approximate value of a property. Various factors are considered for the valuation of a property. For example:
a. RR rate
b. Built-up area- approx 1.2 * RERA carpet area
c. Age of property- decrease RR rate by a certain margin
d. Lift (yes/no)- increase RR rate by a certain margin
e. Amenities (yes/no)- increase RR rate by a certain margin
f. Floor rise- increase RR rate by a certain margin
There are few free tools available online like propworth, but I found them quite inaccurate and opaque. The Ready Reckoner rate can be found using this website. Of course, banks and other financial institutions follow a very elaborate and complex pricing model to determine value of a property, but more often than not these are proprietary pricing models not available to general public. Which brings us to the next quick and easy way.
Valuation of property - via Index2 of the location
I find this method as most reliable, pragmatic and easy since whatever your personal valuation of a property is, the sale will happen at the price at which the builder is ready to sell it. Therefore, details of recent transactions in and around the property of your interest will come in handy to get a realistic idea of the prices as well as it will help you while negotiating a deal with the salesperson since you know the latest price at which they have sold a similar apartment just a week back!
a. Go to https://www.igrmaharashtra.gov.in/
b. Find eSearch > drop down > Free process, free works fine, you can go with paid as well. Create an account like you usually do on any other website and then log in.
c. Move to ‘Rest of Maharshtra’ as applicable, select the latest available year > input the correct district, tehsil, village, survey/gat/hissa number, etc.
d. Hit the yellow ‘Search’ (the other button of ‘CREDAI search’ is paid) and you’ll get search results of recent property transactions in that survey number area. Look for the name of the society/apartment complex of your interest and you see the index2 documents.
How to read the index2 document?
There are a lot of details on this document including the names of the seller and purchaser but as I see it, there are just four main things that you need to observe in this document.
a. Transaction value (aka Mobaddal) and Market value (Bazar bhao) - This is the total deal value declared on the date of registration.
b. Details of the property- This will mention the full official address, including survey/hissa/gat number, name of the society, floor number, and even flat number! There is a good chance you can find the flat just adjacent to your flat which can help you in getting a very accurate picture of the market value of the flat that you are considering.
c. Stamp Duty- That govt levied on this property registration.
The combination of A+C gives an almost accurate picture of the apartment’s value. Consider a few more minor additions based on various factors mentioned in Point#6. One important point to note here is that this method will give you the price which people are paying for the said piece of real estate, it doesn’t give you the intrinsic value of the property like a detailed model could give. However, it is a good way to estimate for your own negotiation since builders generally won’t sell you at a rate lower than what they are already getting in market.
Other components of total deal price
Apart from the Agreement Value and Stamp duty, there are various other charges that a builder may ask from the buyer. Hence, even after you have a few index2 documents in hand (as explained in point#4), you will need to run a quick check using the below list to get an even better idea of the price. Main components of an Apartment’s cost
a. Agreement Value (AV)- The Agreement at which the apartment is sold
b. Infrastructure Development Charges (IDC):
c. Stamp Duty (SD)- From 1 April 2022, Pune has 7% Stamp Duty
d. Cess (if any)- From 1 April 2022, Pune has 1% metro cess
e. GST- Applicable only on under-construction properties. 1% for affordable( less than 45L), 5% for others (more than 45L)
f. Maintenance Charges- Builders generally take around 2 yrs worth of maintenance charges, they get a free hand to spend this amount till society is formed. It is in your interest to get the society conveyance done as soon as possible.
g. Registration Charges- around 30k in Maharashtra at the moment
h. Legal & Documentation charges- 10 to15k
g. Gas pipeline charges (if applicable)- 6 to 10k
i. TDS- 1% of AV is to be deducted by the purchaser whenever s/he is making a payment to the builder and give it to the state govt. This is not exactly an additional component.
Let me know if you think there is any other important aspect that I am missing in determining the overall worth of a property, I would be happy to incorporate those.
