The real estate sector is booming in India and quite a number of new projects are being launched. However, stagnant sales have created a cash crunch for the developers' community. Funding projects is one of the key issues for builders. While banks do give loans, the rate of interest on them makes loans unaffordable for smaller builders and even the leading ones. 

Pre-launch schemes have become one of the ways for developers to raise money for existing as well as new projects. 

A number of people like to invest in pre-launches, as the prices are lower than the ones in the market. However, before jumping at a pre-launch scheme, do consider a few things.

What is a Pre-Launch ? 

Unlike big launches, a developer announces a pre-launch scheme either through a select group of brokers/agents or by individual emails. The project is not advertised through the website or marketing campaigns. 

Pre-launch products are far cheaper than the existing products in a given market. Mostly, they are 10¬15 per cent cheaper. In some cases, discounts go upto 20-30 per cent. Generally, the project is one that'll be delivered in mini-mum two-three years.


Points to Remember

Credibility concern : 
The developer's credentials matter immensely in this case as well.
Invest with those who have a track record of delivering projects on time. More often than not, it's only major realty firms that have the resources to launch new projects in a stagnant market. Such pre-launches are better suited for investors who don't need a home to reside in. Delays are caused when a developer does not get necessary clearances from the government bodies.


Financial backing :  
When people tell you to find out about the banks joining hands with a particular developer, it's not without a reason. This is a huge security blanket for you. Most banks and housing finance institutions conduct a thorough check on the legal aspects of the project like land title and clearances from local authorities.


Worth the deal : 
In some cases, the price of a property is 25-30 per cent lesser than other projects being sold in that area. This difference in rates is the biggest reason why people jump at a pre-launch scheme. However, appreciation of a property depends on various factors like the location, price trends, infrastructure and so on. There are some places where prices have already touched their saturation point.


Paperwork : 
There are two documents a buyer must scrutinise carefully. One is the Intimation of Disapproval (IOD) and the other is Commencement Certificate (CC). The former has a list of approvals from various authorities like environment agencies and so on The latter is a proof that a builder can start construction. At times, a builder has approval only till a certain floor. Check out all these details before sealing your deal.


by Urmimala Banerjee for Midday Property