Welcome all participants

New Hire Induction Program

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1.4 Basic Terminology used in the industry

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1.4 Definition

 Real estate refers to land, as well as any physical property affixed

to the land.

 A piece of any land, tangible or intangible possession which is

owned by someone.

 Egs. can be- Residential new and old homes, Commercial shopping
centres, Offices , Industrial/Manufacturing buildings, vacant land
and farms.
 Properties may be owned by either individuals companies, housing
associations or local authorities

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1.4 Diff. between broker & Consultant

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 BROKER CONSULTANT

 Commission from both  Commission from builder

parties only

 No customer need  Detailed customer need

analysis.
analysis.
 Services provided till
 No services provided. possession of the house
and even later
 Limited inventory
 Vast inventory
 Limited area  Vast Area

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1.4 Types of Property hold
Free hold Property
Property where the owner has complete and absolute ownership of the land
and all buildings that stand on the land.
The owner is therefore in a position to do what he wish to do with the
property in accordance with local planning regulations.

Lease Hold property

A long tenancy - the right to own, occupy and use the Property for a long
period known as the 'term' of the lease.
This can be for 99 years max (can be extended even after that).; and the
property can be bought and sold within that period.

How can I convert a leasehold property to freehold?

The property could be converted from leasehold to freehold if the local laws
allow it. For example, properties under DDA can be converted to freehold by
executing a Conveyance Deed but the same is not allowed if the property is
owned by the Noida Authority as of now.

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1.4 Types of Property

Property can be primarily of two types: -

Commercial Property
Residential Property

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 1.4 Residential Property

 Housing unit used for living purpose and is not

used for carrying any kind of business operations.

Eg. Apartments, Penthouse, Plots, Studio

Villas/Kothi's/Town Homes, Independent
Floors/Builder Floor

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 1.4 Commercial / Investment or Income Property

 Property which is used for carrying any kind of

business activity. Buildings or land intended to
generate a profit either from capital gain or rental
income.

Eg. Industrial, Manufacturing Industry, Service Industry,

Institutional, Hospital, Educational Institute, Community
Centers, Clubs, Commercial, Local Retails Markets, Mall
Hotels, Office Space/Business Park, Shop Cum Offices (SCO)

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1.4 Types of Property SALE

Property
Sale

Primary Secondary
Sale Sale

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1.4 Primary Sales / Fresh bookings / Original bookings

It is the sales of the property for the first time / Purchase of property
directly from the builder of the property.
The entity buying the property is the first owner of the property.
Direct allotment of the property through various government schemes.
In case of Primary sales the real estate consultant involved in the
transaction charges his service fees only from the builder and not from
the buyer.
Therefore the consultant’s pitch to the customers :
We charge Zero Brokerage.

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1.4 Secondary Sales / Resale

 It is the sales of the property for the second time.

 The two parties involved will be the first owner of the
property and the buyer of the property .
 In case of secondary sales the real estate agent
involved charges his service fees both from the first
owner of the property and the buyer of the property.

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 1.4 CONVERSIONS

 1 sq.mt. = 10.76 sq.ft.  1 sq.yd. = .83sq.mt.

 1 acre = 4046.85 sq.mt.  1 acre = 4840 sq.yd.

 1 sq.yd. = 9 sq.ft.  1 acre = 43560 sq.ft.

 1 sq.mt. = 1.196 sq.yd.  1 Hectare = 2.4711 acres

 1 Bigha = 1008 Sq Yd

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1.4 Components of Total Cost of a Property

1.Basic Selling Price (B.S.P.).

2.Other Charges.

3.Goods & Service Tax (G.S.T.)

TDS- 1% on immovable properties (except agricultural land)

exceeding Rs 50 lakhs.

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COMMITTED TO EXCELLENCE
1.4 Other Charges
 Lease rent (L.R.)
 EDC / IDC : External development charges / Infrastructure
development charges
 Fire fighting charges (F.F.C)
 Car parking (Covered)
 Club membership
 Power back up
 Electrification Charges
 Preferred Location Charges (PLC’S)
 Electronic Meter.
 Monthly Maintenance
 IFMS (Interest free maintenance security)

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COMMITTED TO EXCELLENCE
 Illustration Question 1
Calculate the cost of 2 BHK of 1000 sq ft. on 10th floor Road facing, without
GST.
 BSP - 3500/ psf
 L.R. - 65/ psf
 I.F.M.S. – 20/ psf
 F.F.C. – 40/ psf
PLC
 1st- 3rd Floor - 200/psf
 4th- 6th Floor - 150/psf
 7th- 9th Floor - 75/ psf
 10th – Floor - 50/psf
View
 Park- 75/ psf Road- 50/ psf
 Club Membership- 1 Lac
 Parking- 3 Lacs
 Meter- 25,000
 Power Back up- 15,000/Kva (2 Kva mandatory)

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Illustration Question 2
 Calculate the cost of 2 BHK of 1250 Sq ft on 6th Floor Park Facing, Without GST
 BSP- 3250 psf
 IFMS- 25 psf
 FFC- 20 psf
 LR- 85 psf
 Parking 250000/
 Club 75000/
PLC--
 G.Floor- 200 psf
 1st- 3rd- 100 psf
 4th- 6th- 75 psf
View-
Park- 75 psf, Road- 25 psf
 Meter- 25000/, Power back up- 20000/ kva
 Power back up- 3 kva mandatory
 Note- Builder is offering 150 psf inaugural discount

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Provided by the builder mentioning details of how the buyer needs to
pay for the property and at what stages the other charges are payable
by the buyer.

Payment plans

Construction link Down

Special Subvention Payment Assured Return
Payment Plan Payment Plan Plan Payment Plan
(CLP) Payment Plan
(DP)

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1.4 Construction Link Plan
 This plan requires the buyer to pay 10%- 15% of the purchase price
upfront. The remaining amount is linked to construction milestones.

 Total payment stretches till the time the construction of the property is
not completed.

 Since the payment is not timed and completely linked to the construction
progress, this plan carries the least risk for the banker & giving a Home
Loan is less risky for Financial Institution.

 In case of Home Loan. The buyer pays Pre Emi (Interest) to the banker till
a stipulated date

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 1.4 Down Payment Plan (DP)
 In this payment plan 95% of the cost of the property is paid within 30 to
45 days of the booking in the project and the remaining 5% is paid at
the time of possession.

 For encouraging this payment plan all the builders give handsome down
payment rebates varying from 5% to 12%.

 The percentage of rebate depends upon the construction status of the

project and the financial requirement of the builder.

 It is the most risky payment plan as 95% of the cost of the property
reaches the builder without any kind of construction

 There are many projects in which banks only fund in CLP case and not
in DP case till the construction has not reached a particular stage.

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1.4 Subvention Payment Plan
 Subvention means financial support; It involves three parties
– Buyer
– Builder and
– Bank
 The bank only gets involved if the project is 100% safe.
 It is also popularly known as No PRE EMI Plan as it normally
comes with a No PRE EMI payment till particular date or till
possession.
 Pre EMI is borne by Developer at an extra cost on behalf of
customer till subvention period.
 Customers EMI starts after Subvention period is over giving
him/her a gap and not creating undue pressure to cut down
monthly expenses.

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1.4 Subvention Payment Plan

How this works : -

 10% - 15% of the cost of the property is contributed from the

buyer at the time of booking.
 Bank contributes upto 80% of the cost of the property for which
No Pre EMI / lnterest is paid by the buyer for the period
committed in the scheme.
 The Pre EMI/interest accrued on this is paid to the bank by the
builder.
 Builder generally load this additional Interest cost in the BSP of
the property.

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1.4 Assured Return Payment Plan
 It is more of a sales technique used by the builder to increase sales.
 A Lump Sum payment has be made within 30-45 days of the booking
of the property. Instead of down payment rebate the builder gives
assured return to the buyer for a particular period on the paid
amount, generally till possession.
 For example if the cost of the property is 20 lacs and the assured
return is 12% P.a. (for two years) i.e. 1% per month on Complete
Down payment, then the buyer of the property will get Rs. 20000/-
per month for two years.

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1.4 Special payment plan
 Payment options which is different from conventional form, usually provided
by the builder to attract the clients. Sometimes backed up by the financial
institutions.
Egs :
 40:60
 50:50
 30:70
 40:30:30
 25:25:25:25
 10:90

It attracts mostly the investor community as they have a chance to exit with
profit after making partial payment of the cost of property.
In case of Home Loan also the buyer pays Interest payment on lesser amount till
possession.

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1.4 Types Of Area
 Carpet Area

As the name suggests, the carpet area is the area that can actually be covered by a
carpet.  It is the wall to wall distance which makes for the net usable floor area of
the house. Carpet area includes the internal partition walls of your unit but
excludes balcony, terrace or any other common area. On a simpler note carpet area
is the area that can be used inside the unit including internal walls partition, toilet,
bedrooms, drawing room or hall or anything which is inside your unit.

 Built up Area

The total of carpet area and outer walls area makes it to built-up area. Built up
area includes terrace, balconies, mezzanine floors etc. The built up area is approx
8-10% more than the carpet area.

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1.4 Types Of Area
 Super Built up Area / Saleable Area

Also known as the “saleable area”. Super built area is the

combination of built area in addition to common areas. Common
areas generally consist of corridor, lifts, lobby, staircase, mumty or
any other common area in the society.
Cost of property in North India is calculated on Super Area.
The difference in area from super area to carpet area is also known
as loading.
The loading factor depends upon various things like type of property.
More the amenities less the carpet area would be and many other
factors are kept into account while deciding it.

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1.4 FAR & FSI
 FAR : Floor Area Ratio & FSI : Floor Space Index.
 Both of them mean the total area that can be constructed in a
particular piece of land .
 Floor Area Ratio is the ratio between total floor area of buildings
on a certain location and the size of land of that location
(constructible land).
 A higher ratio usually indicates a dense or highly urbanized area.
 Floor area ratios vary based on structure type, such as industrial,
residential, commercial, or agricultural.
 As per govt. regulation only 30% area of the total land can be built
for a Group Housing plot.
 Total constructable area (after getting approvals) on a builder’s
plot is known as FSI.

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1.4 Township
 A development of big area of land normally more than 100 acres
comprising of Plots, Villas, Group housing, Independent Floors
etc.
 It also has Schools, Hospitals & Commercial spaces all inside the
area.
 The local authorities in certain area have fixed a limit for
minimum land required for developing a township.
 In a township all the infrastructure development such as roads
sewage pipes, drainage and electricity poles has to be done by
the builder.

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1.4 Terminologies

 Atrium: - A sky lighted central area especially for public in properties of

commercial nature like malls.
 Podium: - A podium is an elevated platform. In some Group housings,
builders raise podium between towers to give it Aesthetic appeal & to make
it more safer.
 Mezzanine Floor: - means an intermediate floor between two floors above
ground level & is accessible only from the lower floor.
 Floor Plan: - Means the layout of how the apartment will look like and the
size of the unit/apartment . It shows how the layout of the different rooms
will be, their sizes and connectivity.
 Cluster Plan: - Also known as tower layout. It is the layout of the entire
building. It shows the layout of all the apartments on the floor and number of
apartment on the floor, the locations of the stair case, lobby, lifts etc

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1.4 Terminologies
 Site plan: - Means the layout of all the buildings in the complex. It help is
analyzing: -
 Direction of the apartment & green area in the project the directions of north
south east and west are marked in the site plan you can easily figure out facing
of a unit/apartment through the site plan.
 Combinations of the different sizes in towers sometime different sizes are
marked in different colors or different sizes are mentioned for various blocks on
the top of the block.
 Number of Unit/apartments on the floor and numbering plan of the same.
 Location of Club house & other amenities in the complex
 Location of Parking Parks kids play area etc.
 Entry & exit of the entire complex
 Revenue Certification- RC happens after payment of minimum Booking
Amount by the customer. It’s Important for salary processing.
 Revenue Assurance- RA happens after next payment made by the customer as
per payment plan. It’s important for Incentive payout

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 Process of Sale

KYC Docs for Booking

 PAN Card
 Aadhar Card
 Photograph
 Payment method e.g. Cheque /NEFT

Docs which client will get

 Booking form copy with stamp of IC
 Receipt from builder after clearance of payment
 Builder Buyer Agreement will be signed after payment of 10% of the
cost of Property

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