Points to verify before making a property investment



Bank’s investigation helps customers for due diligence of projects
Buying a home is undoubtedly a daunting task with many paraphernalia associated with it. At the time of buying apartments from the builders or the developers the buyers often have to do a due diligence and investigation for the background checks of the developer. The buyers need to know the financial standing of the company or the builder in question. One also needs to ensure that all the approvals are already being obtained. These are of course the essentials that a buyer needs to ensure before deciding to buy any project.
Approved Project Financial Number
Approved Project Financial is a specific code that’s being given to the builders by the banks and the finance companies whoever deals with realty funding and home loans. The APF number is normally issued to the particular housing projects of builders individually.
The APF number so issued is a testimony that the financial institution is satisfied with the builder and the specific project, its proposal, paperwork loans, documentations, legalities and other factors. These APF codes help the builders to get loans also at short notice. This number or the code denotes that the particular project has been scrutinized and the approvals necessary has also been obtained.
According to the financial experts the banks generally scrutinizes the builder’s background and the project also along with the necessary documents and the licenses which is a part of the KYC of the builder. The title documents and the required approvals like the pollution, forest, environment, fire, height and the electricity board is also checked.
The officials said that whosoever applies for such code and approvals from the banks should have a minimum of five years of experience in the realty field and construction of projects. The builder should also be ISO certified and also be a member of any of the chamber of the housing industry like Builder’s Association of India or the CREDAI or any other. The minimum number of the completed and the running projects of the company should be three.
APF a security for customers
It is a proven fact that due diligence about the builder and the project details is necessary for the customers or the prospective buyers. Moreover the background check or the past history of the builder is also required to be verified by the customers much with the assumption that history repeats itself.
This is exactly what PFA does for the prospective buyers. It’s a fact that the banks or the financial companies feel much confident if the project is financially viable. An APF code designated by the bank signifies that the project is well yielding and has also been well scrutinized. This minimizes the banks for the risk of repayment by the builders.
Many Indian banks like the State Bank of India provide a Unique Identification Number for such projects which are approved. This number is often called Approved Project Financial Number or APF which can also be cross checked from the website of the bank.
The bank officials and the expert realtors state that this is a good way for the customers to check the viability of the projects because the bank does the due diligence of the projects already. One of the consultant remarked that nowadays the practice is that every project is first given the due approvals and then the project is taken ahead for completion of construction. But even before the project is launched the builder approaches both the public and the private sector banks for availability of funds.
It is then that the banks ensure that the title is clear of the land and is free of litigation. This investigation goes on and only when the banks are convinced that all are okay the relevant authorities issues a NOC certificate. The truth is the financial institutions both look into the financial and the legalities of a project before they lend capital to the builders.
The trend watchers and realty experts opine that this is an extra mile that is already walked by the banks and financial institutions. The buyers should insist for the AFP number from the banks which would mean that the due diligence is already done by the banks and the finance companies.

0 Comment "Points to verify before making a property investment"

Post a Comment