On an average, an Individual may invest in real-estate once in his life time & seasoned investors may invest 4-5 times, thus it may so happen that they are not well averse with all the terms related to real-estate, which they may encounter prior, during & post their investment in real-estate.
Whether you are buying a flat in new project or a Villa in new venture or plot of land for investment, you come across various terms during the process & knowing those term well in advance can ease out the property buying experience & make it very friendly.
Here is the list of various real-estate terminology for your reference. We have tried our best to include all at a single place.
The Ultimate Dictionary of Real Estate Terms You Should Know:
1. Built-up Area: It is the area covered by the flat including usable area (Carpet area) plus walls. It includes balcony area, rooms, washrooms, dinning & others. Most of the developers in Hyderabad uses Built-up area for selling the flats.
2. Carpet Area: It is area covered by the flat excluding walls & other non-usable area. In Simple words, it is the area which can be used by an individual & which can be stepped upon. It is the area on which carpet can be laid in real. As per RERA act, builders are required to sell all flats on the basis of carpet area only.
3. Acre: 1 Acre is equal to 4840 Sq Yards. Normally project extent is measured in Acres, whereas individual plot is measured in sq yards & individual flat is measured in Sq ft.
4. Square Yard: 1 Sq Yard is equal to 9 Sq feet. All flats are measured in sq feet only & Lands are measured in Sq Yards.
5. UDS: UDS stands for Undivided share. It is measured in Sq yards & indicates the individual flat owner share in the total project land. It is arrived by dividing total land extent of the project by number of flats in the project or built up area of the project. It is called undivided share because it doesn’t specify which part of land belongs to flat owner individually.
6. Building Structure: This shows the overall structure of the building including No. of floors, No. of flats on each floor, facing of the tower & individual flat.
7. Basic Price: It is the per sft cost of the flat, it is arrived by multiplying Flat Built up area with per sft basic cost. This is not the final price as it does not include Parking, Amenities, GST, Registration costs.
8. Down Payment: It is the amount which customer has to pay for booking the flat with the developer. It is also called as Token amount or Booking Amount. Ideally, customer has 30 to 45 days post booking amount to get into agreement of sale by making balance payment up to 10% or 20%.
9. Agreement of Sale: It is the document executed on payment of 20%/10% of total cost of the property. It acknowledges the flat no., floor no. & total cost of transaction. It also mentions the tentative date of completion of the project. It is done on a stamp paper of Rs.100/- only in the state of Telangana.
10. Sale Deed: This document is executed on completion of the project. It is being done post receiving occupancy certificate from the govt & payment of stamp duty to the govt. Sale deed is normally executed with 6% stamp duty of the value of flat in the state of Telangana. It is a registered document & can be verified online.
11. Construction Agreement: This document is executed either with Agreement of sale or post completion of agreement of sale. It states the value of construction along with tentative date of completion. Also this document can either be executed on Rs.100/- stamp paper or based on stamp duty prevailing in the state.
12. Disbursement: Disbursement means release of loan by financial institution or banks. When Loan is approved, it is called as Loan Sanction, however money is released to the developer, it is called as Loan Disbursement. EMI start with loan disbursement.
13: Duplex: It refers to 2 units one above the other with single entry point, connected through staircase or lift. There can be Duplex Flat or Duplex House.
14. Floor Plan: This is the diagrammatic presentation of the flat. It shows the location of entrance of the flat, kitchen, rooms, washrooms, size & facing. This helps users to imagine how their flat will look on completion. It helps in determining Vaastu also.
15. FSI: FSI stands for floor space index. It quantify/restricts the amount of construction which can be done on a piece of land. For example, if particular area has FSI of 8, it means builder can construct only up to 8 times of quantum of land he is constructing on. Suppose land is 500 Sq yards & FSI is 8. i.e. 500*8 = 4000 Sft is the maximum construction which can be done on the land. It includes even higher floors built-up area.
16. Free Hold: Property or Flat is not mortgage and is not held by any person or identity, which is free to be sold and purchased in market is called as free hold property.
17. Gated Community: It is a modern residential community or housing estate having strictly controlled entrances for pedestrians and automobiles, and often characterized by a closed perimeter of walls. It typically houses large number of flats with lots of amenities in it such as Parks, Sports, Super Markets, Gym & Security.
18. Guarantor: It is the person who gives guaranty to pay the obligations of the person taking a loan, if case person taking the loan fail to pay the same. Banks normally asked for a Guarantor in case of Mortgage loans. Giving guaranty is like taking a loan, without enjoying the money.
19. High Rise: Gated society projects normally comes up with large number of floors such as 10 or 15 floor structure. Such projects are called as High-rise projects. Builders typically charges premium for higher floors as it gives amazing views from the balcony.
20. Maintenance Charges: Charges payable by the owners or occupants of a development complex (residential/commercial /plotted) towards upkeep of all common areas and facilities. It is generally a monthly charge. However, at the time of launch of project, builder takes 1 year or 2 years maintenance charges in advance to maintain the building. Maintenance charges can vary based on the size of the project & Amenities within the project.
21. Market Value: It is the value decided by the buyers & sellers in the market, it cannot be controlled & reflects market demand & supply. This can be called as True value of the asset in current scenario.
22. Mixed Use Development: A project providing for more than one purpose. In housing it blends a combination of residential, commercial, cultural, institutional and industrial usage. We may see an increase in Mixed Use development post Covid-19 era due to lack of dependency on external environment & Govt of India initiative of people & society becoming more self-reliant.
23. Mortgage: Mortgage is the process through which money is raised against the property by depositing title deeds with the lender. It can be Registered Mortgage or Un-registered mortgage. Registered mortgage involves change of title of property, thus more secured way of lending money.
24. Mutation: Mutation is the process through which Owner name is registered in govt records such as Municipal Tax records, Water Connections & Electricity records. Mutation involves certain percentage of fee to Govt & it’s a recommended practice to get property mutation done immediately on purchase. It keeps you away from title deed frauds or litigations.
25. NOC: It means No Objection Certificate. This is ideally needed in case of purchase of second hand property. Whenever a person is selling his property, he is required to obtain NOC from the society to initiate the transaction. It acts as a security check to protect the interest of buyer & seller against possible frauds.
26. EC: It means Encumbrance Certificate. This is being issued by Registrar or Sub-registrar office in respect of specific flat or House. This document reflects all the transaction on the property in the last 15 or 20 years. This helps in establishing true title of the property. It can be obtained by paying nominal fee at the SRO (sub-registrar office).
27. OC: It means Occupancy Certificate. It is the Certificate issued by the local development authority certifying that all necessary works have been completed as per the sanctioned plans for the said property and it is fit for occupation. OC is issued after obtaining clearance from the water, electricity, sewerage, firefighting authorities etc.
28. Open Space: Land which has not had improvements such as buildings and other structures added to it. Such land is often left in a subdivision by a developer or stipulated by a local authority for recreational use or for personal use by the owner. Developer use % of Open Land as one of the tools in marketing their project as everyone loves open or free space.
29. Pre-EMI: As the name indicates it’s a payment before start of EMI. EMI stands for equated monthly instalments charged by the bank every month on availing a Loan. Pre-EMI is interest charged by bank before start of EMI. Pre-EMI helps borrower to pay only interest part, thus reducing their monthly obligations until the loan is fully disbursed. Some times builder gave Pre-EMI cashback schemes wherein interest paid by the borrower to the bank is returned to the borrower by the builder in the form of Cashback.
30. Realtors: Realtor word is used for person who deals in purchase & sale of real-estate on behalf of their clients. They are upgraded form of brokers or agents. They may or may not charge any commission from their clients as their services are focussed towards builder. Example of one such company is www.propamigo.com, it lists multiple properties on portal & do not charge any commission. It’s a one stop shop for all property related needs.
31. Site Plan: A detailed plan which depicts the location of improvements on a parcel of land which also contains all the information required by the zoning ordinance.
32. Registration: It is the process by which property title is transferred in the name of buyer from the seller. It is controlled by respective state governments & requires payment of stamp duty to the govt. It is mandatory to get registration done to complete the real-estate transaction.
33. Stamp Duty: It is the sum of money paid to the government for purchase of real-estate assets. It varies from state to state. For the state of Telangana, it is fixed at 6% currently, but subjected to change. This can be paid online or through a Challan at Govt banks.
34. Stilt Parking: A housing complex where the ground floor is reserved for parking.
35. Title Deed: Link documents which establishes legal ownership of the property forms part of title deed. It is the legal document to claim ownership of the property.
36. Under-Construction: Property or real-estate project is called as under-construction unless occupancy certificate is not issued by respective govt office. Under construction projects should ideally cost lesser than completed projects since it has time to completion and handing over & ultimate usage.
37. Ready to Move In: Projects which are completed & Occupancy certificate has been received from Govt is termed as ready to move in projects. There is always a special demand for ready-to move in projects in the real-estate market.
38. Super Built-up area: It is the area which includes Built-up area plus common area used for amenities in the society. It is the total amenities area apportioned to individual flat. Super built-up area is also called as saleable area.
39. Saleable Area: It is the area which includes built-up area plus common area used for amenities in the society. It is also called as Super built-up area.
40. RERA: RERA stands for Real-estate regulatory authority. It has been notified in the year 2016. This act aims to regularize real-estate industry by bringing rules & regulations for builders, real-estate agents & other people dealing in real-estate.
Few important points to know:
1. Builder/Developer to face strict penalties for delay in possession of the project as guaranteed at the time of sale.
2. Builder has to deposit all sale proceeds of the flat in a separate Escrow account & funds should be used for project development only.
41. Building Elevation: This is the look of the building standing outside. It can include no. of towers, floors & overall structure of the building
42. Floor Plan: This is the diagrammatic presentation of the flat. It shows the location of entrance of the flat, kitchen, rooms, washrooms, size & facing. This helps users to imagine how their flat will look on completion. It helps in determining Vaastu also.
43. Cellar: It is under-ground floor, constructed below the ground floor. Major projects in Hyderabad has one or 2 level cellars. It is used for parking only. Cellar area is divided into no. of floors & used for allocation of parking to individual flat owners. It is being separately charged by builder as Parking Charges.
44. Foundation: Foundation is the terminology used in construction. When builder has completed the digging, he lays beams & cables up to ground level. Once it is completed, it is called as project completed up to foundation level.
45. Amenities: It means the facilities available within the project exclusively for its residents. Most of the gated projects in India provides lot of amenities for its residents to ease their life. It is one of the deciding factors in selection of the project. Society with higher amenities are slightly higher in price & its maintenance cost would be also on a higher side.
46. Flat facing: There are total 3 types of facing in all of the project in Hyderabad i.e East, West & North. Among which, East facing is considered the best facing, followed by North & West.
47. Project Layout: This document shows the location of towers, amenities & utilities in the project. It shows no. of towers, No. of floors, facing, location of garden, club house & other amenities. It is normally an aerial view of the project. (View of the project from the top/sky)
48. Possession Date / Completion Date: Possession date is the date of which building has scheduled to complete the project and handover to the buyers. It is also called as completion date of the project. Post completion of the project, occupancy certificate is received from the govt.
49. Payment Receipts: It is the receipt issued by the developer on receiving payment from the customer. It is an acknowledgement for the payment, should be dated & signed.
50. Schedule of Payment: This is the payment plan decided by the builder. It mentions, on what stages customer has to make the payment towards the flat. Normally it mentions the stage of construction & amount of payment. This document forms part of agreement of sale. All future payments will be happening based on this document.
51. Appreciation: Appreciation means increase in the value of real-estates over the period of time. This ideally happens either due to rise in inflation, rise in demand, growth of the locality, Urbanisation, Infrastructure development.
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