Purchasing a home is a significant financial commitment. Urban market price inflation raises the issue even more. Builders develop a range of property payment plans to stimulate profitability into the developments prior to the actual building begins in response to the generally negative buyer attitude in real estate. Check out the article to learn about types of property payment plans in Real estate.
Page Contents
Types of Property Payment Plans
Many developers come with exciting offers to lure homebuyers into a property purchase.
It might be challenging to determine which payment plan best fits a person’s budget, investment goals, liquidity situation, and cash flow.
Given this, there are various payment plans that purchasers should become familiar with to make informed decisions.
Homebuyers worldwide have access to a wide range of payment choices, including Different programmes, deferred payments, and construction-linked plans.
Here we have listed out various Property Payment Plans in Real Estate for you.
Construction-Linked Property Payment Plan
This payment plan is the Best For Salaried Buyers.
With the construction of each floor, builders agree to accept a set amount of the original property purchase price.
The building process is broken down into distinct parts, such as finishing the first floor and completing the basement slab.
A little less than the property’s cost is payable at the point of booking, and another 10% is paid 30 days later. 10% of the total cost is paid upon completion of each stage.
Although the construction-related plan is more expensive, the safety component justifies the entire cost increase.
In this property payment plan, everyone benefits because the builder is fairly compensated for finishing the stage.
The EMI payer incurs no further loss in the event of a delay in possession.
Also, Check out What Are Construction-Linked Payment Plans?
Down Payment Linked Plan
The down payment plan is a Traditional property payment plan in which the total amount of property value is paid in parts.
- When you decide to book a property, you must pay the first instalment, which can be up to 10-15% of the total cost.
- Approximately 80%–90% of the balance should be settled within the time frame set by the parties, and the remaining balance must be fully paid after taking ownership of the property.
- This balance would be made up of other costs such as registration fees, Stamp Duties (which account for around 5% of the price of the property), facility fees, the first year’s property tax, society maintenance fees, etc.
Due to the numerous risks involved, this property payment plan is usually favourable.
If events do not go as expected or as planned, the developers and purchasing parties may become involved in various forms of disputes, and reimbursement in such situations becomes a very serious and time-consuming issue.
Some home builders use plans like “no EMI until possession,” “combined EMI,” etc. However, the meaning of each of these plans varies for different types of buyers.
Time-linked Property Payment Plan
If you are the sole buyer then this property payment plan is suitable for you.
Think about a scenario where you, the buyer, are required to make payments up until predetermined dates, regardless of whether the construction or any section of it, is finished successfully or not.
The interest of the developers is the only consideration when designing any payment arrangements.
In this property payment plan, buyers are required to pay property costs in instalments which are not linked to project construction stages.
Several developers offer an 8–10% reduction on the total property cost for choosing this strategy.
Rarely are some projects that have already been finished or are ready for occupancy eligible for this type of design. And choosing this route for a property that is still under construction carries a significant risk.
Standard Deferred Payment Plan
In this property payment plan, the buyer pays 5 to 25% of the entire cost at the point of purchase and the remaining amount after taking possession.
It is a useful payment plan because customers can buy property by putting down just a small down payment.
They are given enough cash to meet other financial obligations. Given that there is no triple agreement between the bank, the developer, and the buyer, this plan also gives the real estate investment a better exit option than subvention plans.
The buyer can therefore interact with any bank institution of their choosing.
Additionally, purchasers who can afford a larger booking amount may potentially be eligible for a bank loan at a suitable moment, when the project gets closer to completion.
Additional Discounts on Property Purchase
Additional discounts are offered on the basic property value (around 8% – 18%), time-bound value discounts (for the first 50 reservations with a specified sum of 5–10% off the basic sale price, etc.), and other freebies may also be offered.
- Waiver of floor rise fees
- Exemption of stamp duty & registration fees
- Rent payments to the buyer limited to a certain amount for a set amount of time or until possession
- Consumer goods
- Fully-equipped kitchens
- Gold coins
- Vacation packages
- Automobiles
These are a few of the offers given by developers to lure buyers.
Point to Keep in Mind
Every buyer is unique, as are their financial circumstances and the reason they are purchasing the property.
Thus, not everyone will be able to use all payment plans. The plans could or might not be included in the builders’ terms of payment.
Decide which payment option best meets your needs by considering the benefits and disadvantages of each carefully before making your decision.
In any situation, be sure to consider the builder’s or developer’s reputation as well.
When the developer is serious and determined to provide on-time and high-quality deliveries without any legal complications or implications the perks of the property payment plans become apparent.
Also, Check out the Top 7 Best Residential Projects In Panvel 2024
FAQs
| What is a payment plan in real estate?
According to the payment plan, the buyer must pay 10–15 percent of the property’s value upon making a reservation, another 80–90 percent within a specified window of time, often 45–60 days, and the remaining amount upon taking possession of the property. |
| What is the Flexi payment plan in real estate?
This plan combines a construction-linked plan and a down payment plan. According to this plan, the purchaser must pay 50% of the total cost of the property before construction work may start. |
| How do you pay when buying a house?
You can make a payment using a bank check, NEFT, or any other available method. Get the property registered, include the amount paid in detail, and pay the necessary stamp duty for the document. |
| Which is the best payment plan for buying a property?
There are various types of payment schemes available such as CLP, subvention plans, and downpayment plans for buying property. |
