Monday, January 31, 2011

Own a House in Metropolitan Chennai

The feel of owning a house makes us feel proud and all of us will devise a plan to built/buy a house of our choice that suits our pocket.What are the difficulties we currenlty face when we try to freeze a house of our choice in a metro like Chennai? Who are the various people cashing in on the Real estate market and making a huge cut in our had earned money. I am just sharing my thoughts and some scenarios I have witnessed / heard based on my experience with the Chennai real estate market since I bought a house in 2003.

In olden days a property consultant is a person who mediates between the seller and the buyer and gets a meagre amount as fees for his consulting. He also ensures that the deal is beneficial to both the parties and owns responsibility. He builts a reputation to ensure that he gets more business.

Come 2007 was the boom for real estate market when every one beelined to buy a nest for them to dwell and the prices sky rocketed from where it was in the start of 2000. An individual house/posh residential apartment in a decent locality which costed 15-20 Lacs has increased four fold. Have the factors associated with the construction risen so huge? No way, the major contribution to the rise is the middle man/power agent (so called property consultant) who flush in money into real estate market to make huge profits in short term. When you approcah a property consultant for buying a property the first question they ask:

What is your Budget?

Now the trap is laid for you that they overestimate the value of the property and then reduce some (negotiation) and completes the deal. However you might have overpaid and increased the market value in that area. All other properties will be sold with your deal as the benchmark.

Who is not a property consultant?

I am just listing different people who are self proclaiming them as property consultants/middle man

1. Auto Driver
2.Vegetable vendor
3. Dhobi
4. Lawyers
5.Retired officials
6. IT crowd (in some cases)
7. Jobless youth

Have I missed any? If so, I haven't come across them

They believe that cahing in on real estate market is the easiest way to make quick money(with tax exemption).

Apartments for sale-the Builder chain

A mason with 10 years of experience and have done 3-4 above said deal becomes a builder and starts building apartments. I have seen a lot of such second rated apartments which are far below benchmark in quality and durability, however the prices are in par with the current market. Is the government taking any steps to ensure the quality and credibality of these small time builders? Hope they need to to avoid any disaster in future..




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