Under-Construction Or Ready-To-Move: The House Buyer’s Dilemma!

Tax implication while selling a propertyConsiderable thought goes in before the purchase of a house. Among the things to be considered are the kind of house a buyer wants, the location and whether the house is a ready-to-move type or an under-construction one.
So when the builder plans to build a housing society the advertisements of the proposed property can be found in various media. The builder aims to sell as many flats or houses before the completion of the project. A well known fact is that more than 75 per cent of the flats are sold even before the construction has started.

Buying an under-construction home


1. Cheaper– Under-construction houses are generally cheaper in comparison to ready-to-move houses. There is a significant price difference of 20 to 30 per cent between them.

2. Low on EMIs– EMI’s are paid as work on the project progresses. Therefore in the case of under-construction houses the initial EMIs are less.

3. It’s a win all situation for both builder and the buyer– While the buyer saves money, the seller has customers even before laying the foundation stone.

4. Higher returns– People investing in under-construction homes get higher returns but that also comes with risk factor. For instance, in Noida people who had bought flats from Noida authorities got good returns while in a similar case, people who had invested in property in Samshabaad near Hyderabad are still waiting for returns.


1. High Risk Factor– All does not go down well with under-construction houses. At times the builder does not finish the project on time stating issues like cash crunch, increase in interest rates and cost of raw materials.

2. With time the market outlook about the area can alter– The market outlook about an upcoming area can change with time. Like what happened in the case of Samshabaad, Hyderabad. There were plans of building hospitals, many engineering colleges and the largest Infosys campus. But due to the financial meltdown of 2008 nothing came up.

3. At times buyers don’t get everything they have been promised -This is one of the most common complaints made by buyers. Many a time, the builder does not give all the documents related to the property. Home buyers generally feel cheated when it comes to the actual carpet area. Generally only 70% of the super-built area is converted into carpet area. Don’t be surprised if the swimming pool as promised would never come up in reality.

Points to remember
Home buyers should always do some research on the work done by the builder in the past. If the builder has a track record of finishing the project on time, the chances of getting the flats on time increases.
Home buyers should have a clear idea about the loan tenure and how the money is released to the builder.

Buying ready-to-move houses

This trend has been catching up for some time now. Home buyers now prefer ready-to-move homes over under-construction ones as a fair amount of waiting-time before possession is involved in the latter.

Since the 2008 recession, a large number of home-buyers complained about high wait times before possession of homes because builders were unable to stick to their promised schedule.


1. Immediate possession– Buyers do not have to wait to move into the house. All buyers have to do is make the payment, sign the necessary papers and move in with their baggage.

2. You get what you see– Buyers pays for what they see. As there are people already living in the apartment or society, the buyers gets a fair idea about the locality, nearby shopping and utilities centers etc.


1. Is the property a well constructed one?– Buyers have no idea about the quality of raw materials used, strength of foundation etc. If the maintenance has not done properly, the house starts looking old within a few years.

2. Expensive in comparison to under-construction houses– The buyers have to pay higher usually 25 per cent more of what under-construction houses cost for ready-to-move homes.

Points to remember

It is a known fact that ready-to-move homes are expensive but it?s better to do a detailed research if you plan to buy one. Start by talking to the people in the locality to get an idea about the prices.

Finally which type of home should one go for? Ready-to-move or Under-construction?

This depends on the buyer’s financial situation, immediate need to move in and most importantly the location.

If the buyer is in no hurry, can take risks and not worried about the location, an under-construction house would be a more logical option whereas if the buyer wants a short move in time, low risk and a developed locality, then ready-to-move home would be prudent.

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