Settlin | Notes for buyers, sellers, startups and techies

Why should you buy your home through Settlin

March 19, 2020March 19, 2020 Bangalore

When you are planning to buy your home, you have a lot of options. But have you ever thought that all those options can be actually categorized in 2 simple groups:

Online portals, which are classifieds, and
Offline brokers, who are working for a few sellers

Is there a proper marketplace like Amazon wherein you can get lots of options, check out the products and do a COD? There is. Settlin. Let me get down to the reasons on why you should buy your home through Settlin.

4x more inventory than any other website

We guarantee you much better availability of inventory. Classifieds have a limited business model that forces them to have hardly 5-12% of the entire inventory universe at any given time. Our list-till-it-is-sold service ensures that you have the maximum options.

7x more search parameters

We provide you filters on more than 24 parameters.

Need duplex? Done.
Need Rental value more than 30k? Done.
Cauvery water is a must. Done.
OC should be there. Done.

Think of a parameter and you will find it.

Most websites boast of 4-10 filters, but they do not really deliver the results. Because despite the filters, the listings do not have most of the data and you will not get accurate results.

80+ parameters on each and every listing

We curate each and every property by a physical visit from our executives. This ensures that each listing has a floorplan, photographs, and data on more than 80 parameters. This, in tandem with our 24 filters, ensures that you get what you want.

Each listing is unique

Unlike classifieds which are marred by duplicate listings, our each and every listing is unique. We go to great lengths to remove duplicacy in our system.

Visit Requests and Scheduling

We support not just shortlisting, but one click visit request. A dedicated RM will be assigned to you and will manage your visits, suggest you further properties and provide you with any and every consultancy that you may require for buying your dream home.

Visits facilitated by non-broker professionals

Once the visits are scheduled, you will be escorted to the property by our non-broker partners, who are just working for us on the weekends. They work on a per visit fee model and have a complete professional non-partisan approach towards your visit. In simple terms, no one is going to force you towards making a decision.

You will be given all the information that you need. We know how important this decision is for you, and we are here to assist you to reach it, not decide it for you.

Negotiation & Pricing assistance

We are the best experts in the localities that we operate in, just by the virtue of the amount of data that we have and the number of transactions that we close per month.

We will help you with the current market trends and the ongoing prices. Instead of positioning as a seller agent or a buyer agent, we proudly position ourselves as mere match-makers trying to bring two interested parties on common grounds.

We believe on three fundamental tenets,

Negotiation must be based on facts and not emotions
If there is negotiation, it must be rooted in mutual respect and concern for the rights of others – John F. Kennedy
The true success of a negotiation, is a solution where both parties win

We will be there by your side till the end

We provide you with complete transactional assistance, from token amount safeguarding, to legal verification of the property, to loan procurement, to sale agreement, to tax deductions, to property registration.

All this at a jet-speed. More than half our customers close the entire transaction in 2 months, when the average in Bangalore is 6.

Whoa! All this sounds great. But what does it cost?

Do not worry. We have got your back, here too. Check out our pricing and I am sure you will be very happy.

What’s more, for you to buy your home through Settlin, there is a post-paid package, which means you pay us only when you get your papers. To add an icing, your first legal verification is completely on us.

So what are you waiting for, go settlin’.

Demonetization will not devalue properties in Bangalore

November 17, 2016 Home Buyers

The general consensus is that the real estate prices will correct themselves owing to the death of black money. But will that actually happen in Bangalore?

How is black money involved in Indian real estate?

0–50% of the transactions are done in cash

The municipality guidance value/property rates are much lower than the actual sale price. So, if you are buying a property of 80 lakhs, you may be doing a registry for just 40 lakhs so that you can save on the stamp duties and registration charges. The remaining 40 lakhs is typically paid in cash, enabling consumer black economy.

For Bangalore, this figure is close to zero. Details below.

Investments in builder projects

Bulk or business black economy is boosted by huge back door investments in realty projects — similar to us buying groceries without receipt. The money invested is kept off the records and in return, apartments are written off in dirt cheap “on record” prices.
This kind of involvement has no direct relationship to the apartment prices though. The prices are mostly driven by the demand, which is bolstered by 1, i.e. the consumer black money.

De-monetization effect

Once the black economy is restricted, this 0–50% of the cash transactions (above and beyond the registration value) will definitely decrease. The new houses are quoting random figures, which may not be correct, but a decrease will be there, in general.

The key factor here is the guidance value. The price correction is all about the money that is being paid in cash during a sale transaction.

What will happen in Bangalore

Bangalore (the city area), will largely remain unaffected.

Factor 1

We have been involved in quite a few transactions in Bangalore, and we can tell you for a fact that the cash part in a sale transaction in main Bangalore, on an average is just 4%.

Let’s churn some data,

So you can see how close the guidance value is to the actual quote price of the sellers. In cases, it even is lesser than what people are willing to sell at.

Factor 2

Another factor to be taken into account is the cost price for the sellers. A seller who invested in a property post 2012 has hardly gained anything today. We have had clients selling for a profit of less than 1% year-on-year. So from the buyer’s perspective if someone hopes for the prices to fall by 10%, when the current quote of the seller is hardly 8–10% over his original investment, hopes will remain hopes!

Factor 3

Many banks provide loans on 80% of the Sale Deed Value (Registration) and not the actual Sale Value. Due to which, many buyers in the metros go for the full amount registration and hence avoid any cash transactions.

The Truth

If you want a property for investment purposes, do wait.
Look for newly developed/under-development areas in the outskirts where the guidance value is much lesser than the market value. Price corrections will happen, and 6 months down the line you will be able to afford a much better property than today.

But if you are looking to settle, do it today.
These prices will not decrease. They will follow their normal growth trajectory of 2–5%, and even more if the BBMP focuses on its whims. The 20–25% guidance price increase this year in April was focused on more taxation [source], and the same may happen again next year.

More truth

People are afraid. Sellers are ready to sell their properties at a price lower than they were willing to yesterday. But tomorrow, once people see that the prices are not decreasing, they will regain confidence. Today is the day. Carpe diem!

Addendum:

People have started analysing these trends more. See:
http://timesofindia.indiatimes.com/city/thane/Price-correction-in-realty-market-not-a-possibility/articleshow/55532361.cms

Should I sell my Bangalore property?

November 6, 2016 Investing

The current market is disheartening. The prices have been stagnant in the last couple of years. What is better then — holding on to a property or selling it off?

Facts

The stagnancy is here to stay, at least for 2 more years.
Rental yields are 2–4%. They are consistent with the yields across the world, and won’t increase.
The fixed deposit interest rates are (and will be) around 7-7.5%.
Mutual Funds can give you a 10–20% interest rate on a 3 year term.

Options

Keeping the property for the next 3 years

You get consistent 2–4% return from the rentals. If the market takes the turn after a couple of years, may be you can get a 5–10% return in the third year from its sale. Not a bad option.

Selling the property

Let’s assume that you only get your principal (I know it sounds bad, but please, keep reading). Capital gains are negative. No taxation. Minimum returns on any financial instrument — 7.5%. Minus TDS, ~6%. Not bad again, right.

So, what now?

More often than not the wiser choice would be the latter. But soon we will launch a tool to help you with it. Till then, read further.

Our take

The World Bank paper shows that the housing markets behave more or less in the same fashion across geographies. The natural order of demand-supply economics suggests that the real estate prices have a direct correlation with the development dynamics. The question then is, as India is the fastest growing economy, why is this not translating in to price growth?

Growth has shifted its home

The answer is simple, the growth is not because of the growth in inner Bangalore. Entire Bangalore had a GDP growth rate of 6.8% in 2015, while India grew at a higher rate of 7.5%. We can safely assume that the inner city would have hardly witnessed a growth of mere 3–4%. It is the Tier II cities and outskirts of Metros that are bringing in the growth figures.

So have real-estate investment opportunities

The city real-estate is mostly driven by residential and commercial demand (thanks to the startups!). But it is highly unlikely that the main city will see a >5% growth in realty prices. When we say ‘main city’, we mean an area where 85% or more of the land has been constructed upon.

Hence, if you have any apartment (bought as an investment opportunity) in the heart of Bangalore, we would suggest to offload it, in any price that you are getting today. Investing it elsewhere (financial instruments or even real estate in outskirts, other cities) will give you much better return.

Luxury residential prices will rise

Our tip: While the real-estate’s main focus is on affordable housing, it is the luxury real estate that will prove to be a great investment, especially in the city pockets.

[Source: For the past 10 years or so, we have more or less following the growth trajectories of China, especially in real-estate. See for your self.]

As a proof, see the trends in Indira Nagar, Richmond Town etc. in the following image [source: NHB].

So, if you have some spare change, invest it in a villa in the heart of the city. Let it rest for 10 years, and then the magic should enthral you.

Conclusion

Sometimes, the best gain is to lose.
- George Herbert

Do not lose sleep over the low price that you are getting for your apartments in the city today. Offload it.
Normal financial instruments will give you more returns than your apartment in the heart of the city.
Real-estate investments in houses/villas in the city, or land/apartments in the outskirts, may yield good returns.

Note: If you have thought about selling your property but are having some trouble, read Problems-I-faced-in-selling-a-property-in-Bangalore.

Amazing sale on resale

November 6, 2016 Buy Property

Resale properties are on high demand since the downfall of realty industry. Still they can be bought at a lot cheaper prices.

Housing is down, but Settling is up

Properties were a sought after investment commodity not more than a year ago. They still are in many Tier III pockets of the country, but people in the metros are shying away from them.

Delays by builders.
Everyone hopes Real Estate Act will do something about it.
Decreased returns on investment. A flat in a city like Bangalore hardly gives you a 5% year-on-year price growth trajectory. Rentals were always low earning (2–4%).
On the other hand, the home loan interest rates are still the same at around 10%.

While the investment sentiment has been shattered, the utility segment is still on the track. It will always be. Everyone can afford to take his/her salary a week later, but not his food. Need will always win over entertainment, obligation, or investment.

We may stop buying houses and apartments, but we will always buy a home.

Resale is cheaper than you thought

While people are doing that, they must be given the knowledge that they can spend a lot less than what the market is telling them. While builder may be selling a flat at 6000 INR / sqft, the some owner might be selling his at 4500 or less. Builders can not decrease the price because they have already put a lot into making it. Early stage investors though, put merely 3000–3500 and are still getting a good profit at 4500.

This is specially for people who think that the builders will give them good 2–3% discount, while brokers will cheat them for a 1%. Go to agents, they may help you find a much better deal.

Settlin optimises the price

Believe it or not. We are the best at what we do. And what we do is ensure that a property is sold at the right price. It is beneficial for both the seller and the buyer.

Say, a seller bought a property for 80 lakhs a couple of years ago, and now wants 1 crore for the same. That is what he puts on the classifieds. Lots of people visit it. But no one buys. Because there are cheaper properties in the market, and its actual worth is just 90 lakhs. Seller generally does not know about that (but, we, at Settlin, have the data and analysis to figure out the current worth).

Generally, it takes months before he can realise his folly and slash down his prices. Or better for him, prices increase in a year and he can sell his property now for 97 lakhs. Awesome, right?

No. Had he sold his house in 90 an year ago, he could easily get an 9+% interest on any of the investment products in the market (FD gave 8.5% in July, 2015). He could have easily invested the money in another property at a lesser rate (mind you, the property prices have increased a year later). So he is not benefiting anything from a delayed sale.

So it is in the best interest of a seller to bring their rates to the market value, and we ensure that they understand that. So, a buyer always gets the best price.

RESALE — The Reality of Realty

July 31, 2016 Bangalore

I have subscribed to Google news on real estate. I get around 6 news items daily. But since the last 6 months, of the 1080 articles, I have not seen more than 3 articles on the secondary markets.

Secondary market — what and why?

Secondary real estate market comprises of everything that’s not primary. It is an anti-definition, but a lot easier to understand. Primary market is the market of all newly built apartments which are being sold by the developer himself.

So secondary market is everything else. Any house, plot, apartment, villa, sold by any individual owner constitutes a secondary or resale transaction.

That sounds big, doesn’t it? It is.

In Bangalore alone, 60% of all the transactions are resale. Now think of the Tier II, III, IV….. cities, where there are hardly any developers.

How is resale in real estate different

The simple truth is that land is a finite commodity. Builders can buy ( a resale transaction in itself! ), build and sell. But it will again be sold by the owner. In the end, during the lifetime of a property, while a primary transaction happens once, the secondary transaction may be done at least 3 times.

Additionally, real estate is the only commodity where resale prices are higher!

This means that if a flat is being sold at ₹ 100 by the builder, in its lifetime, it will further attract at least ₹ 1000 investment.

Still resale is neglected

Because 100 is lot more easier to track and invest than the 500.

Lack of organization
Builders have lobbies, individuals don’t.
No institutional investment
All resale properties are localized single entities.
Scattered data
The sales are huge, but non-uniform and scattered. Most of the state governments have e-records for land, but in different formats and not integrated.
Data is unavailable to public
An RTI will not get you the data from sub-registrar offices. They keep records as isolated transactions, and it will cost a fortune to organize them.

The outcome of neglect

A resale transaction becomes extremely difficult. While primaries are being done at a button click, the resale takes months to happen. A resale transaction is 100 times more effort and time than a primary one.

Restore the balance!

Let’s bring resale in the limelight.

Thank you media, builders, brokers and classifieds! You have deliberately left a space that has so much potential. We, at Settlin, will definitely leverage it.

Data and transaction, both are equally crucial for this market. We are handling them both in an innovative way. By June 2017, entire Bangalore will experience hassle-free resale transaction at their finger tips.

B Khata may be a great investment

July 16, 2016 A Khata

The ABC of A and B Khatas

Khata = Account (hindi, kannada)

When mentioned in reference to a property, it means that the property is registered with the Municipality, for the purposes of property taxation.

The A and B

Well, normally there is just a single type of Khata. But Bangalore is an exception. When BBMP was created by merging various municipal councils, it had to take tax from many properties which were “not legal”. So it created a separate type of account, calling it the B Khata. Consequently, the non-B Khata became A Khata.

Thus, A Khata property means that the property has complete documentation with the BBMP (even if those documents are not with the owner). It is a Municipality verified legal property.

B Khata property on the other hand may not have all its legal documents registered with the BBMP. Whenever it does, it is eligible to be converted into an A Khata property. It’s the BBMP way of warning a naughty kid,

I know you have misbehaved, still I will let you attend the classes. But I can change my mind and put you in detention whenever I want *smirk*.

Land and Construction have different accounts

Accounting is done for the land and the construction differently. So, when you buy a DC converted (non-agricultural) land, it is readily eligible for an A Khata. But then the construction plan is to be submitted, got approved and the construction is to be done. This construction may deviate from the floor-plan. Unless, BBMP verifies that it matches the floor-plan, the construction, and hence the property, remains in B Khata.

BBMP has very few resources to verify each and every property. This leads to numerous B Khata properties, despite the High Court ruling to ban the issuance of such Khatas.

Most of the independent houses are B Khata

No denying that. It is Murphy’s Law. Planning can rarely be perfect. People tend to not get the re-approval of the actual construction plan. It takes time and effort.

Hence, apart from the investment reasons, Bangaloreans prefer the developer flats in order to get a fully legal property. But here is the caveat.

90% of the developer projects are B Khata too

What? The? Floor?

Well, its true. When they say they have an A Khata, they simply mean that the land is registered as an A Khata. But once they complete the buildings, they need to get the Completion and Occupancy Certificates. These certificates are only issued if the construction plan has been properly followed. Many builders build more than the stipulated number of floors, or penthouses that were non-existent in the plan. So they do not get the certificates and the apartments become B Khata apartments. It is a huge issue, in Bangalore at least.

Why should I go for B Khata property then?

A-Khata is definitely awesome. But, you can also go for B Khata, depending on the number of other documents of the property are available. Because then you will get it cheap and with some minor effort on your part, you can convert it into A Khata.

Update Apr 11, 2018: UPOR (Urban Property Ownership Records) soon to be launched in Bengaluru. Once implemented, the A and B Khathas will have no meaning, there will be only one type of tax account, similar to most other states.

Single card to determine property ownership in city
After a delay of almost six years, the Revenue Department has started creating and maintaining Urban Property Ownership…www.deccanherald.com

We are here to help

At Settlin, we help you (both sellers and buyers) with all the documentation hassles, and advise you to your heart’s content in such matters. Bangalore is our home, and we would love to make it yours too! Do Settl In.

Pocket dictionary for Bangalore Real Estate

July 16, 2016 Documentation

Settlin has ensured that I know the basics about the Bangalore real estate. I would love to share my learning with the world.

Property Documents

Following are the most crucial documents that you need to have for your property (or a property that you want to buy).

Title deed

A document entitling the property to an owner. The most important document for any property. Without this, property is government’s.

Completion certificate

A document confirming that a building, house or project has been completed, in compliance with the existing regulations and submitted floor-plan. It precedes an occupancy certificate.

Occupancy certificate (alias Possession Certificate)

A document confirming that a property is ready to be occupied. Applicable for certain residential complexes, viz. buildings

consisting of more than one basement floors
consisting of more than five floors
has a development plan approved by BDA (hence, all builder flats)

Occupancy certificate is now a mandatory requirement for securing A Khata for apartments.

Encumbrance Certificate (alias No Encumbrance Certificate)

An NOC document ensuring that there are no encumbrances, i.e., outstanding loans/charges on the property.

A Khata — B Khata

Type of accounts (registrations) issued by BBMP for the purpose of property tax. It simply means that if you want to pay the tax for a property, you can quote the account and do so.

The most common cause for a property being a B Khata is that the construction has not been according to the sanctioned plan, or BBMP has not yet verified it.

Share certificate

Only applicable in case of a co-operative society, when the society issues share certificates to owners of the flats. An outgoing member transfers his shares to buyer signifying transfer of ownership of the flat.

Miscellaneous

Akrama-Sakrama

A BBMP scheme to ensure easy conversion of B Khata properties to A Khata, by simply paying a nominal penalty for the construction and sanctioned plan differences. The scheme officially ended in March 2016.

The conversion is still possible if all the required documents are there. This scheme was more like a VDS for income tax. To regularise properties with a penalty.

The scheme has never been approved by the courts as a legal option. But considering the demand, there is a high chance that such a scheme will soon find its place in the BBMP offices again.

Ref: Hindu

Problems I faced in selling a property in Bengaluru

July 8, 2016 Bangalore

(A two act tragedy and ethnofiction on the sets of Bengaluru Real Estate)

Last year, I was trying to sell my 5 year old house. It was a nice A Khata property, at a decent price (at least I thought so).

ACT I: The classifieds

I started by listing it on the portals — CommonFloor, 99acres, MagicBricks, Housing. I got verification calls from these portals, and also offers to get a paid listing, but as a pakka hindustani, I ignored them to save my hard earned money. Housing even sent a guy to take photos of my property. I was happy.

Too many calls, mostly brokers

Within a couple of hours of the publication, my phone rang. Ah! it should be a prospective buyer, I thought. I picked it up, and the person on the other side started asking the details about the property. I answered his queries diligently. After about 5 minutes of conversation, he said

Ok sir, your house seems a very nice one. I will be definitely able to sell it at your asking price, or even more. I will charge you a commission of 2% on the sale price.

I was vexed! Still, keeping my calm, I told him I do not want to deal with brokers. What a bloody waste of time!

In the next week, I got a many more calls, almost 5–6 every day. But, most of them were brokers. Burnt once, I had learnt now. My first question would always be,

Aap party hain ya broker?

Remember Navin Nischol in Khosla ka Ghosla? Did that make you smile? Well, sadly, that is the funniest turn that this story takes.

Window shopping is a habit, and a curse

As the weekend came, I got some interested individuals wanting to inspect my house. I welcomed them. Since I was living in Electronic City to be closer to my office, I notified my tenants and drove down in the city to show them the house. The first party came an hour late, and I gave them the best picture that I could. After half an hour of explaining and talking, they told me to tell their decision in the evening. The second one did not turn up at all.

After a long arduous drive back, I called the first party for their feedback. They told me they needed some more time to think. The next day, I could not muster up the courage to drive back to the city, and gave instructions to my tenants to show the property to one other buyer who was to come. But he too did not.

This process continued for a couple of months before I realised that all the individuals that are coming to see my house are just “browsing”. I wanted genuine buyers and hence I decided to take a premium listing. 500 bucks was always better than 2%.

The calls increased in number. But this time, I had given my wife’s number. Brilliant, eh! She is anyways much more patient than me. This time too though, the calls were mostly from brokers. I wondered how many there are, and just by a quick google search, commonFloor divulged that there are 18234 agents listed on its website. I could nothing but sigh, thinking of the waves I was swimming against.

Eventually, I gave up. It had already been 7 months. My wife was impressed by one of the brokers, and I was impressed by his 1.5% demand. I agreed.

ACT II: The broker

Brokers promote window-shoppers

The broker did seem hardworking. In the next couple of weeks, he did bring at least 10 individuals to show my house. Even his friends (other collaborating brokers, I presumed) would bring people to see my house. I was happy once again, ignorant of the evanescence of my happiness. These brokers were bringing a lot of customers, but they were even worse than the ones I attended. I soon figured out that the brokers, in general, tend to push a buyer to visit one of the houses, even if he is not interested, in the hope that he might like one.

In all this fiasco, a year had passed away, and so had my pride of being a house owner. It was nothing but a burden to me, and I had no idea what to do.

A couple of months later, someone from my office came to know through a mutual friend that I was selling a house. He too had been looking for one since more than 8 months and was desperate to buy one. Our desperation took us to a bar where over a couple of drinks, we mutually agreed to deal the seed, sorry, seal the deed. He got a great house (at a great price, I would say) and I got, well, rid of one.

I have heard that the apartments are easier to sell and have invested my proceeds in an upcoming project near the Airport, in the hope that the new Real Estate Act will save my day. That in itself is a different story and I will tell it to you soon.

To summarise:

Classifieds

The classifieds are a great way to advertise, but a normal seller is not equipped to handle the amount of lead-shit they throw at him.
They do not and can not weed out the brokers. It is against their revenue model.

Brokers

They forcefully make non-serious buyers visit your property, hoping for a miracle.
They give you false hopes on your price quote.
They demand 2% when they really do a work of 0.2%, or even less. The commission has no logic behind it, just a norm.

P.S. I have recently come across a new startup that claims to help our souls. They go by the name of Settlin. I am not sure how good they are, some one amongst you can probably talk to them and tell us better.

—
The writer is just a disgruntled seller. He thinks its better to write creative imaginative pieces than to actually sell a house. Lord save his soul.