Coimbatore Home Buyers Guide

Buying a home is a crucial decision, which needs a lot of research and thinking. Owning a home
is everyones dream. However, apart from ones personal preferences and attachment to the
home they are going to buy, there are a lot of financial and practical aspects that are entwined
in this decision.

Considering the challenges faced by you, the home buyers, in this crucial event of your life, we
bring you our compilation of articles that will help you make a better decision for purchasing
your home.

This Home Buyers guide will help you find answers to your questions/queries on the following:

1. Best Places in Coimbatore to Buy a Home

2. Best Time to purchase a House
a. Should you purchase ready-to-occupy property?
b. Should you be buying a home this year 2016?
c. Steps to be taken to buy a property at a young age.
3. Important Checklists
a. Things to check before buying a house
b. The Complete Pre-Possession Checklist For Your New Home
4. Help-guide to a perfect Home Loan Application
5. Complete Glossary of all Real Estate terms you need to know
 Best Places in Coimbatore to Buy a Home

Located on the banks of the Noyyal River, Coimbatore is the second largest city in Tamil Nadu. A
perfect amalgamation of tradition and trend, this city is one of the best south Indian cities, to
settle down in. Surrounded by the Western Ghats, this city has the perfect weather that makes
life a blissful experience. With more and more villas and apartments being built, Coimbatore
has become a very practical and comfortable residential location. Some of the best residential
localities in Coimbatore are as follows:

1. Singanallur

Located just 6.5 kms away from the Coimbatore airport, this neighborhood is well-connected by
roads and railways. This locality is convenient for everyone as it has everything a resident
wants. From schools close-by to posh restaurants, it is one of the opulent localities in the city.
Singanallur also has some of the best restaurants and hotels like Hotel Aloft Coimbatore, RHR
Restaurant, Hotel Anandha, etc. One of the nine large lakes in the city, the Singanallur lake is
quite a refreshing spot in this locality. 3 & 4 BHK villas with contemporary new age architecture
in a gated community will cost somewhere around 1.46 to 1.75 crores.

2. Gandhipuram

Located near most of the major companies, industries, and budding corporate, this place is one
of the major commercial centers in Coimbatore. If you are looking to have your residence near
your workplace, then Gandhipuram will be a perfect option for you. The area is a good
residential locality as well. With great restaurants like Junior Kuppanna, Cloud 9, Anjappar,
Ganache, etc., this place is a paradise for foodies. Apart from the eateries and commercial
centers, most educational institutions, hospitals, and some government offices are located in
Gandhipuram making it a comfortable place to reside.

3. Trichy Road

This neighborhood is the heart of Coimbatore. Situated close to the airport, this place is one of
the luxurious locations in Coimbatore. With well-known schools like St. Francis Anglo Indian
Girls High School and Alvernia Matriculation Higher Secondary School, the apartments and
villas here are perfect for residents who are planning to move in with their family. Attractively
priced apartments and villas are sold here in a price range of Rs. 69 Lakhs to Rs. 2.4 Crores.
With amenities like shopping complexes, high-end salons, groceries, and hospitals nearby,
being a resident here is once-in-a-lifetime kind of experience. Also, if you are planning to move
to Coimbatore from one of the metro cities, this locality offers the convenience of the
metropolitan cities with the tranquility of Coimbatore.

4. Kalapatti

The amazing neighborhood of Kalapatti is known for the essentials like peace, comfort,
opulence, space and style. Multi-specialty hospitals like Park Hospital, Aandal Hospital, etc. are
present here making it easy and convenient for the residents. Furthermore, with schools like
Zee School, Saran Matriculation School, etc., this area is good to settle down in. This suburb has
a demographic advantage of being in midway between the two important national highways,
Avinashi road (NH-47) and Sathy road (NH-209). Casa Grandes Eternia has already been a
successful project, and Eternia II is now in pre-launch stage. The range of residential homes is
just 10 minutes away from Avinashi Road. Surrounded by international educational institutions
and companies, Eternia II can be booked for attractive prices through pre-launch sale.

5. Sai Baba Colony

If you prefer to live in a posh locality with a very elegant neighborhood, Sai Baba Colony is the
one for you. Situated just 4 km north of Gandhipuram, this place is named after the famous Sai
Baba Temple that is located here. Apart from which the famous Zion church is also situated
here. Known for its calm residential lifestyle, this locality has a lot of independent houses and
some apartments.

6. Kuniamuthur

Located on Palakad road, Kuniamuthur is 6 kms away from Coimbatore Junction and about 17
kms away from the airport. With close proximity to the Taj Hotels, Park Royal Inn, etc., this
place is nothing short of a city lifestyle. Also, this locality has one of the busiest markets in
Coimbatore. With a lot of CBSE schools and best colleges in the vicinity, Kuniamuthur has
apartments and villas starting from as low as Rs. 20 Lakhs. Just 3.5 kms away from Ukkadam bus
stand, Casa Grande is all set to launch Kuniamuthurs first lake-view villas.

7. R.S Puram

Rathina Sabapathi Puram, popularly called RS Puram, is completely a residential area, which is
also known for being the shopping district of Coimbatore. Known as the prime residential area
in Coimbatore, R.S. Puram is 12 kms away from the Coimbatore airport. A perfect
amalgamation of commercial and residential amenities, R.S Puram is proliferated with a lot of
commercial establishments, government offices, educational institutions, large shopping
complexes, sprawling sporting facilities, etc. Apart from these, this place has a lot of tourist
spots, restaurants, and some cultural centers, where people can relax with their families over
the weekend. The Diwan Bahadur Road, i.e. the D.B. Road, here is quite well-known for
shopping.

8. Avinashi Road

An arterial road in Coimbatore, Avinashi road is one of the popular localities in Coimbatore.
With well-known educational institutes like PSG Colleges, Coimbatore Medical College, and
Coimbatore Institute of Technology, this area also houses research institutes, museums, art
galleries, etc. Surrounded by shopping malls and luxurious hotels, the lifestyle of this area is
nothing short of living in a metropolitan city.
 Best Time to purchase a House

Top 7 Reasons to Invest in a Ready to Occupy Home

For most people buying a house, which they can call their home, is a lifelong dream. Of course,
this is not as easy as it sounds. It involves a lot of research and points to consider before making
that big decision. One of the most important things to consider before investing is choosing
whether you would like to buy a ready to occupy home or an under construction one. If you are
in a dilemma about this, ready this to find out the advantages of investing in a ready to occupy
home.

Tax benefits

One of the biggest benefits of investing in ready to occupy home is the tax benefits that you get
out of it. With skyrocketing property prices, it is almost becoming impossible to buy property
these days without taking a considerable amount of home loan. According to section 24(b) of
the Income Tax Act, 1961, interest paid on construction, purchase and repair of a house is
deductible and this can be claimed only after the construction of the property. Section 80c of
the Income Tax Act also allows a deduction of Rs 1.50 lakhs for principal repayment of the housing
loan. The interest paid is eligible for a deduction up to Rs. 2 lakh. This deduction is applicable only after
you take possession of the house.

Rental savings

The ready to move in apartments are ideal for users who are keen on living in their home rather
than letting it out. If you are planning to move in settle down there, you can save significantly
on money as you will avoid paying rent. However, if you are planning to just rent it out and not
looking to move in, the rental income can also help you pay off some portion of the EMI.

Limited risks

Buying a ready to occupy home ensures any potential risks such as delayed procession, price
fluctuations, and other legal issues are avoided. You face no ambiguity when it comes to quality
or landscapes also.

Price appreciation

Buying a house that is near completion not only avoids the risks of delays and change in layout,
but it also has the chance of the price of the property going up significantly, once the property
is fully operational. Usually the project appreciates 10 to 15% once the housing complex is fully
occupied. The appreciation rate, though, depends on the location, facilities and amenities
offered by the builder. It is a wise idea to pick a credible builder such as Casa Grande who offers
world class housing at affordable prices.

What you see is what you get

Often times, we buy based on the layout on paper, however, with ready to occupy home, you
buy only after you see the completed home. From the facilities offered to actual apartment that
you will be investing in, you get to see everything before actually buying it. Additionally, with
ready to occupy homes, you also can talk to other neighbors and buyers about the apartment
and the facilities and get their feedback before making a decision. This is, perhaps, the biggest
advantage of a ready to occupy home. There is no room for regret!

You get to know your neighbors and community

The benefit of buying a ready to occupy home is that you get to choose the kind of community you
would be living with. You can already see who your neighbors are and what kind of people you will be
potentially living with ahead of actually moving in.

No Pre EMI loss

Buying a house is a big decision and finances play a very vital role in making this decision. If you
choose to buy an under construction house, you will be paying EMI for months or even years,
for a house even before actually getting it. This predicament can be avoided in a ready to
occupy home. If you choose to invest in a ready to occupy home, you start paying your loan
after you move in or rent it out!
 Should you be buying a home this year 2016?

With the Budget session close on our heels, now is the time when investments are a hot topic
around us be it tax saving investments or reorganization of finances or a new plan for the
upcoming financial year. If you were in two minds about buying a new house, this is the best
year to take the leap. Here are 5 reasons to buy a house in 2016:

Attractive Home Loan Rates

One of the most important factors that determine the cost of your loan is the interest rate.
Higher the interest rate, higher is your cost of long-term property purchase. After a couple of
rate cuts by RBI, the home loan rates have come down in a long time. 2016 can turn out to be a
good year to make the most out of the opportunity with more rate cuts expected to follow.

Tax Benefits

Home loan finance not only allows you to realize your dream of owning a beautiful home, they
also help you gain attractive tax benefits. The interest on your Home Loan EMIs qualifies for
deduction. If you use the house for your own residence, then you can claim up to Rs. 2 lakh for
deduction. In case of a rented property, you can claim the entire interest amount for deduction.
The principal component of your Home Loan is available for deduction under the Section 80C of
the Income Tax act. You can claim up to a maximum of Rs. 1.5 Lakhs under this provision.

Why rent when you can Own

The most important reason for most people to be investing in a house has to be this- Even if
you had been living in a house for five years straight, it does not become yours. With the
increase in rental rates, the best possible solution is to move in to your own house. If you are
paying a substantial amount as your house rent, why not convert it into your home loan EMI
that will give you your own home and at the same time, form your biggest investment from a
long-term perspective.

Long-term Appreciation

Real Estate Investment can yield one of the best long-term returns in a fast-developing country
like India. With the fast appreciation in land prices, accompanied with growth in infrastructure,
purchasing a house can be the next multi-bagger investment. Cities like Chennai, Coimbatore,
Bangalore, etc. provide the opportunity to invest in high-potential growth hotspots.

Attractive projects

Riding on the infrastructure growth story, lots of attractive projects are coming up. With the
advancement in technology and aesthetics, houses are no longer seen as a place to board and
lodge. The pleasure of having all your amenities like swimming pool, gym, play area, etc. in
ones own house is the best. There is a growing demand for aesthetically built ultra-smart, living
spaces that are technologically sound a well. Thematic houses are also a craze now-a-days. For
example, Casa Grande Kuniamuthur is a dream for any sports-lover.

Financial Security

In case, you already own a house, you can still purchase a house and let it out for rent. The
rental income can complement your monthly income. The long-term Return on Investment can
be in terms of capital appreciation on property sale as well as the regular capital inflow from
rent. Even if you invest the rent in a simple Recurring Deposit, it will fetch you approximately 8-
9% per annum. This can enable you to provide a stronger financial security for your family.
 Steps to be taken to buy a property at a young age

Investing in real estate for most young people sounds like an old mans game. That partially
explains the trend to wait until the forties or fifties to start investing in real estate. The other
explanation can be attributed to the perception that you need to learn swimming (read garner
experience) before you jump into the sea. This article would break these myths along with ideas
to start investing in real estate.

Need more time in your young, busy life?

As you grow older, you bet you wouldnt get any more free time than now. Family. Kids. Home.
Career. In short, the older you become, the busier you are. So, throw the busy excuse out of
the window.

You need to have a fat bank balance to start investing in real estate?

Money is definitely important to invest in real estate. But, nobody said that that money should
be yours. Until and unless you have done some real bad work with your credit early on, you
should be able to land up an EMI based home loan.

Need to get experience before burning your hands in fire?

Knowledge forms the basis of any investment. And we are not denying that. There are millions
of books out there as well as umpteen investment gurus who have shared tips on investing in
real estate. So, get started fast and exploit one advantage that you have over the older
generation- the ability to learn fast.
Learn to sacrifice the lollies for the gem.

If you want to be rich down the line, you would definitely be required to sacrifice some low-
hanging fruits in the present. Forgo 1 vacation planned next year to make up for a couple of
down-payments. Or purchase a car at a cost level below than what you can afford. After all,
financial freedom comes at a cost.

Make the right moves. Doesnt matter, if they are small.

You cannot score a goal without knowing to kick the ball. Start small but definitely make the
start. If you cannot afford a Luxury Villa at the start of your career, you can definitely start by
investing in a 2 BHK apartment. This start can give your ample returns over a period of time.

Get the plan ready. It helps to have a map with you on your journey.

Go to the drawing board or pull out a spreadsheet and set down your monthly budget. Push out
a couple of luxuries you can afford to forgo and plan the budget that can fulfill your monthly
EMIs for real estate investing.

Okay, you want to invest, but what about the risks?

Roses do not come without the thorn. But if you are alert, you can avoid the thorns. Similarly,
when the question of risks comes into investing in real estate; the best time to take risk is when
you have 20-30 years of our job left than when you have 5 years to your retirement. Also, the
more you delay, the more you lose out on the power of compounding over the long time frame.

In short, investing in real estate at a young age is actually better than investing at a later age;
quite contrary to the popular notion. Hence, why dont you get started now? Theres never a
better time than now.
 Important Checklists
Things to check before buying a house

Buying a piece of land or a flat is a cherished dream for many. Real estate is one of the biggest
investments you make in a lifetime and you need to do your homework before you take the
plunge. Here is a guide on 10 things to check before you buy a property.

About the land

If you are buying a land, the first thing you need to do is make sure the land has cleared all legal
procedures. Ensure you personally inspect the land before you buy it. You need to make sure
that the title deed of the land is in the name of the seller. Also, you need to verify that the seller
has full right to sell the land and that he is the sole owner of the land.

Research in Location/Area

Location of the house is an important point for consideration. Whether you are buying the
house as an investment or planning to move in there, you cannot ignore the importance of a
good location. Ensure the growth of the area is good and the location has good schools,
supermarkets and other essential amenities close by.

Pricing
The price band for your real estate investment needs to be fixed before you start scouting for
the property. It saves a lot of time by helping you narrow down on your choices and at the
same time, makes sure you only fall in love with the ones you can afford. The best idea is to
come up with a maximum limit on budget and not exceeding the same no matter how
attractive the property is.

Legal Due-Diligence

Buying a house involves a lot of documentation and its best to go through the documents
yourself as well as consider legal consultation in case you are not acquainted with the terms
involved. Ask for copies of all necessary permissions prior to making any financial transactions.
Check the following documents and clearance certificates to avoid getting into any legal tangle
in future:

Land Record
Construction Clearances
Approved Planning
Land Use Certificate
Master Plan of the property
No Objection Certificates

Builder Credibility

Selecting a credible builder is an extremely important step in buying a property. Research well
about the builder and the best way to go about this is to look for past projects of the builder.
Choose a credible builder like Casa Grande, who develops quality livings spaces.

UDS
While buying an apartment, buyers focus on flat area but completely forget about the land
ownership-Undivided share of land. An Undivided share is a share of land allotted to the flat
buyer while purchasing a property and it is registered in the name of the owner. Ensure you
check for your share of UDS before making the purchase.

UDS = Built-up area of individual flat / Sum of all flats built-up area X Total land area.

Percentage of Common Areas

The actual usable area of a flat you are buying may differ from the one you are charged for. The
common areas are the shared spaces on a single floor, and within a building in its entirety.

Finance/Loan
Planning your finances before you invest in a property is a wise idea. There are plenty of
financing options out there so make sure you research them all and pick the right option that
suits you the best. Make sure you have enough savings, before you apply for the loan.

Civic Amenities
You must inspect amenities offered along with the property. Some of the important things to
check are fire alarms, garbage chute system, parking, lifts, power backup, etc.

Recreational Amenities

Most apartments these days come with recreational amenities for residents such as club house,
swimming pool and gym. Special theme projects can offer a wider range of amenities based on
your preferences. For example, Casa Grande Kuniamuthur is a heaven for sports lovers. You can
target a real estate project that caters to your needs and preferences.
 The Complete Pre-Possession Checklist For Your New Home

Taking possession of ones new home is a moment of ultimate happiness and pride. Sometimes
the excitement of the moment may cause you to miss out on some important checks that you
must make prior to possession.

To help you make sure that taking possession of your new home is as smooth and hassle-free as
possible, we have put down a ready checklist with all the points you should check before you
take final possession of your new home.

1. Documents:

This is by far the most important of all checks as the set of documents is what will help you
verify ownership and legality of construction in future, whenever the need arises. Here is the
list of documents you must ensure you have received from the builder prior to/at the time of
possession:

a) Approved Plan Layouts

After studying the plan layout submitted by builder and architect, the licensing authority issues
the approval for the same.

b) Building Completion Certificate (BCC)

Once the project consultant audits the entire project and submits the report, the licensing
authority issues the BCC (Building Completion Certificate)
c) Occupation Certificate

This is the final certificate issued by the licensing authority and only after the issue of this
Occupation Certificate, water connection is provided to the newly built home. It is also
important to be able to sell or transfer your home to another person.

d) Original registration deed and other documents

Original registration documents, parental documents, drawings, concerned authority approvals

and other similar documents are generally submitted to the association. It Is advisable to get a
copy of these and a complete breakup of the common area as well.

2. Interiors:

a) Doors And Windows

Air circulation is very important to lead a hale and hearty life in your dream home. For proper
air circulation and sunlight, the doors and windows are to be placed properly especially in the
kitchen and bathrooms and too much sunlight can have its negative effects as well. Sliding
doors, if any, are to be checked and any defects should be brought to the builders notice. It is
also important to check that your main door is fitted with a door eye/magic eye as this is one of
the most basic features that a home must have.

b) Walls And Ceiling

Some builders might leave your wall with a single coat of paint which may cause it to lose its
shine within a very short period. It is better to check all the walls for a double coat. The balcony
grills and gates are also to be checked for a proper finish. It would also be prudent to check for
loose patches in the wall and look for fan hooks in the ceiling.

c) Floor and Tiling

Flooring and tiles would need to be checked for cracks and cleanliness. The slope of the tiles
would need to be checked in the toilet, kitchen and balcony to ensure smooth water drainage.
In the kitchen, the finishing/polishing of the counter and any leakage in the same should be
checked as well.

d) Switches and AC Ducts

Placement of switches and proper electrical connection to all switches would need to be
checked. If any non-functional plug points or switches are found, they should be brought to the
builders notice. Another thing to check for would be AC ducting bad ducting can cause
seepage in the wall as well.
e) Plumbing and Sanitation

Check the pressure of water from the taps to ensure it is at optimum level. Also, check the
functioning of hot and cold water mixture knobs in the taps. Sanitary fittings are to be checked
for cracks and ensure that the drainage system is in order.

f) Miniature Circuit Breaker (MCB)

When there is an overload/short-circuit in your homes electrical circuit, an MCB is the one that
saves you from a possible overload/short-circuit. Hence it is of prime importance to check its
functionality and that the MCB with the right range that is appropriate for your home has been
fitted.

3. Amenities:

A lot of amenities are usually promised at the pre-construction stages and it is vital to check
whether all these are in place as mentioned. Also look for the specifications of the facilities
offered and it is good to ensure that there is no deviation from what was stated earlier.

4. Other Safety Precautions:

The guidelines and safety measures specified by the Government are to be followed by the
builder. The piped gas lines, if fitted, that enter your kitchen are to be monitored for proper
functioning. Any promised security measures such as CCTV cameras or intercom must also be
tested for functionality.

Once all the above checks have been satisfactorily made, you should ensure that you have
received the possession letter and the other documents that are to be received from the
builder as per point number 1 above. We hope this checklist will help simplify the process and
make your life easier as you take possession of your new home so you can focus on enjoying
the moment and celebrating with your family and friends.
 Help-guide to a perfect Home Loan Application

For most Indians, buying a house is a lifelong dream. Of course, while buying a house it is easy
to get overwhelmed by the financing options available. Thankfully, if you take the time and
effort to research, you can save a lot of money and hassle. Availing a home loan is not as easy
as it used to be. There are multiple processes and documentation involved it. Even a small
misstep and your home loan can get rejected. So if you are looking for a home loan, read on to
know about the best home loan options available to you.
Some of the key factors to look into before taking the loan are:

Interest rates

Every bank charges different interest rates. It is important to compare various interest rates
before settling for one. It is also important to remember that even a small difference in the
interest rate can have a huge impact in your EMI. There are two kinds of interest rates you to
choose from:

Fixed interest rate: Fixed interest rate is an interest rate where repayment of home loans in
fixed equal installments over a stipulated period of time. The interest does not change even if
there is a fluctuation in the market.

Floating interest rate: As the name suggests, this type of interest rate is when the rate of
interest varies with market conditions. They are usually cheaper than fixed loan rates; however,
they can increase depending on the market conditions.
 Processing fees

The fee charged by financial institutes to cover the basic expenditure to process your home
loan is referred to as the processing fee. This fee varies from bank to bank and is usually
anywhere between 0.51 per cent.

Pre-payment charges

In case you are looking to pay off your loan ahead of the stipulated time period, do remember
there is a prepayment fee that you will have to pay. This fee is only applicable on fixed rate
home loans and not the floating rate home loans as the RBI has as the RBI has barred the
lenders from charging prepayment penalty on floating rate home loans.

Late payment charges

If there is a delay in paying EMIs, lenders charge a penalty. This fee is usually high and can be as
high as 2 per cent per month on the over dues EMIs. It is advisable for borrowers to check
ahead before availing the loan.

Documents required while applying for a home loan:

Filled in application with processing fee

Photographs of the applicant and co-applicant
Income proof
Address proof
Bank statements

Additional documents in case of a salaried individual:

Employment letter from employer

Copies of pay slips for last few months
Latest Form 16 issued by employer

Interest rates of major banks

Bank Interest Rate

SBI 9.35% 9.40%

HDFC Ltd 9.40% 9.45%

LIC Housing 9.50% (fixed for 2 years)

ICICI Bank 9.40% 9.70%

Axis Bank 9.45% 9.60%

IDBI Bank 9.60% 9.75%

PNB 9.55% 9.80%

Home Loan Processing fees of Major Banks in 2016

Pre Payment
Bank Processing Fees Charges

0.50% 1.00% of the loan amount or Rs. 1500/- (Rs. 2000/- for
Mumbai, Delhi & Bangalore), whichever is higher + applicable
ICICI Bank Service Tax & Surcharge Nil

HDFC Ltd 0.5% or 10,000+service tax, whichever is higher Nil

SBI Home 0.35% for every Lakh+Service tax or Rs. 10,000 whichever is less,
Loan subject to minimum Rs 2000 Nil

Axis Bank Up-to 1% of the loan amount subject to minimum of Rs.10,000/- Nil

Up to 50 lacs : 10,000 +(Service tax)

LIC Housing 50 lacs & above : 15,000 +(service tax) Nil

IDBI Home
Loan Nil Nil

PNB Home
Loans 0.50% of the loan amount Nil
 Complete Glossary of all Real Estate terms you need to know

There are many abbreviations used in real estate industry. Heres our comprehensive real
estate glossary to help you understand the real estate jargons well.

Absorption

The number of months it would take to sell the currently listed homes in the market. The
amount of inventory or units of a specific commercial property type that become occupied
during a specified time period (usually a year) in a given market, typically reported as the
absorption rate.

Acquisition Fee

A fee charged by a lessor to cover the expenses incurred in arranging a lease. Acquisition fees
may also refer to charges and commissions paid for the acquisition or purchase of property,
such as closing costs, real estate commission, and development/construction fees. Acquisition
fees may be paid up front by the buyer or lessee or added to the loan amount and paid over the
term of the loan.

Adangal
An Adangal is an extract from A register which is maintained at the VAO office. This record
gives detailed information on the type of land and the use of this land.

Add-On Factor

The number of usable square feet divided by the number of rentable square feet in a
commercial real estate lease. The result of this calculation will be 1 if the two numbers are
identical, but it is usually slightly lower than 1 because some square footage in a building will be
partly or totally non-unusable. Non-usable square footage includes space shared with other
tenants (such as lobbies, hallways, stairwells, elevators and restrooms) or occupied by
structural components (such as support poles and interior walls). In a poorly designed building,
the usable area may be considerably less than the rentable area.

Alienation Clause

A clause in a contract that gives the lender specific rights in the event that the mortgaged
property is sold or transferred

Amortization

Amortization is the periodic payment of principal and interest on a liability (including a

mortgage), or the write-off of a non-depreciable asset over a scheduled term.

Balloon payment

The final payment of the balance due on a partially amortized loan.

Base rent

The minimum rent due to the landlord. Typically, it is a fixed amount. This is a face, quoted,
contract amount of periodic rent. The annual base rate is the amount upon which escalations
are calculated.

Board Approval

Board approval is a condition in the standard cooperative sales contract requiring that the
buyer obtain approval from the board of directors of the cooperative corporation as a
prerequisite to completing the sale.

Breakpoint
The sales threshold over which percentage rent is due. It is calculated by dividing the annual
base rent by the negotiated percentage applied to the tenants gross sales.

Bridge Loan

A bridge loan is a loan for a short duration of time and can be used when one is purchasing one
property but is dependent on the equity from another property that has not yet been sold.
Once the property is sold then the bridge loan is repaid.

Broker

An individual or firm that charges a fee or commission for executing buy and sell orders
submitted by an investor. The role of a firm when it acts as an agent for a customer and charges
the customer a commission for its services.

Bond

A sum of money paid by a tenant and held by the Tenancy Services to ensure against defaulting
on payment and damage to the property.

CAM cap

The maximum amount for which the tenant pays its share of common area maintenance costs.
The owner pays for any CAM expenses exceeding that amount

Cash flow

The net cash received in any period, taking into account net operating income, debt service,
capital expenses, loan proceeds, sale revenues, and any other sources and uses of cash.

Chitta

A Chitta is an extract from Patta that contains information related to the ownership details of
the land. Information like Village Taluk, District, Patta number, Owners name and their fathers
name can be found in this record.

Closing Costs

Closing costs are the expenses incurred in the purchase and sale of real property paid at the
time of settlement or closing. Some examples of closing costs are title insurance, attorney fees,
appraisal fees, recording fees and taxes.

Cost approach
A method of determining the market value of a property by evaluating the costs of creating a
property exactly like the subject.

Common Area Maintenance

This is the amount of additional rent charged to the tenant to maintain the common areas of
the property shared by tenants. Typical examples include such work as landscaping, snow
removal, exterior lighting, as well as insurance and property tax.

Comparative advantage

The principle that cities or regions tend to produce those items or support those activities for
which they have the greatest advantage over other areas as defined by the factors of
production, demand, supporting industries, and quality of life considerations, as defined in
relation to human, financial, and physical resources, and opportunity costscosts expressed in
terms of opportunities foregone.

Condotel

A condominium project that is operated as a hotel with a registration desk, cleaning service and
more. The units are individually owned. Unit owners also have the option to place their unit in
the hotels rental program where it is rented out like any other hotel room.

Conformity

Conformity is the homogeneous uses of land within a given area which results in maximizing
land value.

Contract

A contract is a legally binding agreement between two parties, and in order to have a valid
Contract of Sale in real estate there must be: an offer, an acceptance, competent parties,
consideration, legal purpose, written documentation, description of the property, and
signatures of the principals.

Conveyance

The act of transferring an ownership interest in real property from one party to another.
Conveyance also refers to the written instrument, such as a deed or lease that transfers legal
title of a property from the seller to the buyer. The term arises most frequently in real estate,
where a conveyance refers to the written contract between the seller and the buyer stating the
agreed-upon purchase price and the date of actual transfer, as well as the obligations and
responsibilities of both parties.
Cooperative

A type of ownership of property. This is when the individual unit owners own shares in the
cooperative building and do not own the actual property. The amount of shares owned is
determined by the value and size of the apartment. The cooperative building owns all of the
units and the purchaser is buying stock in the building.

Credit Score

A credit score is a numerical rating provided on a credit report that establishes creditworthiness
based upon a persons past credit/payment history and their current credit standing

Declaration

Declaration is the master deed containing legal description of the condominium facility, a plan
of the property, plans and specifications for the building and units, a description of the common
areas, and the degree of ownership in the common areas available to each owner.

Discount rate

The percentage rate at which money or cash flows are discounted. The discount rate reflects
both the market risk-free rate of interest and a risk premium. Also see opportunity cost.

Dual Occupancy

A block of land which is zoned so that there two distinct dwellings are permitted by the Local
Territorial Authority, to be constructed.

Dual Agent

A dual agent is a broker or salesperson who represents both the buyer and seller in the same
transaction.

Dynamic system

A complex and ever-changing or evolving set of diverse and interrelated entities and agents
which are organized into a coherent and working totality which serves multiple and/or common
purposes or objectives. Also see system and market dynamics.

Economic Depreciation
Economic depreciation is the physical deterioration of property caused by normal use, damage
caused by natural or other hazards, and failure to adequately maintain property.

Escrow

A state where consideration, benefits, legal rights, money, documents or other valuables are
transferred to another party in advance of that partys legal claim to them, on the basis that the
legal claim will arise at a given point in the future. It is a form of trust.

Efficiency

A measure of the capacity or effectiveness of space to produce the desired results with a
minimum expenditure of time, money, energy, and materials.

Escalation Clause

A clause in a lease which allows the landlord to increase the rent in the future to reflect
changes in expenses paid by the landlord, such as real estate taxes, operating costs, etc. This
can take three forms: 1) fixed periodic increases, 2) adjustments based on the Consumer Price
Index (cost-of-living increases), and/or 3) an increase tied to the increased costs of operating
the property.

Estate

Estate refers to the collection of all assets of a deceased person. It is also the extent of interest
a person has in real property.

Eviction

An eviction is a landlords action that interferes with the tenants use or possession of the
property. Eviction may be actual or constructive.

Exclusive Agency Agreement (Exclusive Listing)

An exclusive agency agreement is between a broker and a seller designating the broker as the
sellers sole agent for the purpose of selling his or her property. This agreement does not
preclude the owner from effectuating a sale on his own.

Expansion

A phase of the real estate or business cycle characterized by the dramatic short-term increase
in the supply of available units in a given market (due to economic growth and increasing
construction activity) as a response to increasing and/or pent-up demand and rising price
levels.
Expenditure patterns

The tendencies or propensities of individuals/households to spend disposable income on a

given good or service in comparison to other goods and services (typically defined as a
percentage of disposable income) in relation to income level or range and/or other
demographic or socio-economic characteristics.

Fair Market Value

The fair market value is the price for a property agreed upon between a buyer and seller in a
competitive market.

Fixed Lease

A fixed lease is when the rental amount remains the same for the entire lease term; also called
flat, straight or gross lease.

Flip Tax

A levy issued on the transfer of ownership by a cooperative corporation or condominium

association against the seller, typically, though it may be against the buyer. The flip tax is
usually a percentage of the purchase price.

Full Recourse Debt

A guarantee that no matter what happens, the borrower will repay the debt. Typically with a
full recourse loan no occurrence, such as loss of job or sickness, can get the borrower out of the
debt obligation. In this situation, if there is no collateral for the loan, the lender can go after the
borrowers personal assets to collect if the loan is defaulted.

Functional feasibility

Considerations made in the site selection process which assist in the evaluation of site potential
as defined in terms of the practicality of a site, the best site for a given use, or the
determination of a sites best use, through the examination of linkages, competition,
demographics, and market conditions.

Functional obsolescence

A form or source of accrued depreciation considered in the cost approach to market value. The
reduced capacity of a property or improvements to perform their intended functions due to
new technology, poor design, or changes in market standards.
G

Gap analysis

An evaluation of the difference in the demand and supply of space (measured in terms of
square footage) for a particular type of commercial property in a given market area where gaps
are expressed as the amount of square footage demanded less the amount of square footage
available in a given time period. Note that if demand exceeds supply, the gap will be positive. A
positive gap indicates that potential opportunities exist for successful commercial real estate
transactions. However, transactions might be avoided when supply exceeds demand (or when a
negative gap occurs), as there is an oversupply of available space in the market.

General Agent

A general agent refers to the entity that has full authority over a property of the principal, such
as a property manager.

Graduated Lease

A graduated lease is a lease in which the rent changes from period to period over the lease
term. This type of lease is usually used by a new business tenant whose income will increase
over time.

Gross area

The entire floor area of a building or the total square footage of a floor. Gross leasable area
(GLA) The total floor area designed for tenant occupancy and exclusive use, including
basements, mezzanines, and upper floors, and it is measured from the center line of joint
partitions and from outside wall faces. GLA is that area on which tenants pay rent; it is the area
that produces income.

Gross Lease

A type of lease in which the tenant pays a flat sum for rent, covering all landlord-paid expenses,
including taxes, insurance, maintenance, utilities, etc. By having all these costs thrown in, you
can better forecast your monthly expenses and also avoid potentially high bills associated with
these operating costs.

Growth patterns

In reference to the patterns of urban or population growth in a geographic market, an

important consideration in retail trade area analyses as growth patterns are known to affect
sales/revenue potential within a market given the tendency of retail to follow population
movement and income concentrations over time.

Heat map

A visual representation of data using colors. A heat map can be used with all sorts of data, from
representing the number of foreclosures to the spreads of credit default swaps.

Housing Expense Ratio

The housing expense ratio is the relationship of a borrowers monthly payment obligation on
housing (principal, interest, taxes, insurances and other applicable housing expenses) divided
by gross monthly income, expressed as a percentage. It is also referred to as top ratio.

Housing demand

The total number of housing units demanded in a given market, defined as occupied household
units divided by one minus the vacancy allowance for that market (where demand is affected
by the rate at which new households are being added to the market, allowing for a normal level
of vacancy).

HVAC

HVAC is an acronym that stands for heating, ventilation and air conditioning.

Imperfect market

A market in which product differentiation exists, there is a lack of important product

information, and certain buyers or sellers may influence the market. Commercial real estate is
bought and sold in an imperfect market.

Index

Index is a benchmark, usually a published interest rate, such as a one-year London Interbank
Offered Rate (LIBOR) security yields, used to calculate the interest rate of an adjustable rate
mortgage when rate is scheduled to change. Generally, a margin stated in loan documents is
added to the index to determine the new interest rate.

Index lease
A lease in which the rental amount adjusts accordingly to changes and/or movements in a price
index, commonly the consumer price index.

Industrial gap

The difference between the demand for an industrial property and the supply of that property
in a given market or area.

Installment Sale

An installment sale is a property sale in which the purchaser pays the purchase price over a
period of years. The seller recognizes gain for tax purposes by the proportion of the profit
(determined by the profit divided by the nest sales price of the asset) received on each
payment as it is received.

Investment Real Estate

Real estate that generates income or is otherwise intended for investment purposes rather
than as a primary residence. It is common for investors to own multiple pieces of real estate,
one of which serves as a primary residence, while the others are used to generate rental
income and profits through price appreciation. The tax implications for investment real estate
are often different than those for residential real estate.

Land Lease

A land lease is a situation in which a building and other land improvement are rented for a term
of years. At the end of the lease term, the right of possession is extinguished and reverts back
to the landowner. At the time, the tenant loses any remaining equity interest in the property.

Landmark

Landmark status is the designation given to a building or neighborhood that is under

government protection for purposes of preservation.

Leasing

A means of obtaining the physical and partial economic use of a property for a specified period
without obtaining an ownership interest.

Letter Of Intent
This is an informal and preliminary agreement between the tenant and the landlord indicating
intent to move forward with negotiations. Always consult your legal counsel before signing any
Letter of Intent.

Listing

The term used by brokers to market an apartment for sale or rent.

Listing Broker

The listing broker represents the interests of the seller or landlord in the sale or rental of his or
her property.

Loan balance

The amount of money remaining to be paid on an amortizing loan at a given time.

Loan or mortgage value

That portion of the value of real property recognized by the lender when used to secure a loan.

Loft

A loft refers to an open living space that was converted from commercial space to residential
space. Lofts contain very high ceilings, large windows and open space.

Lot

A lot is a measured section of land.

Maintenance

The monthly charge levied on owners by a cooperative corporation to cover the buildings
operating costs, real estate taxes, and the debt service on the buildings underlying mortgage.

Market analysis

The process of examining market supply and demand conditions, demographic characteristics,
and opportunities; identifying alternative locations/sites that meet specific objectives or satisfy
various criteria; and assessing the financial feasibility of those locations/sites to facilitate
decision making regarding the commercial potential or suitability of various locations/sites to
support a given activity or use.
Match

Second stage of four-stage transaction management process pertaining to gathering and

evaluating property information to unite the investor and user. The acronym MATCH
represents the activities to market, analyze, target, compare, and highlight during the match
stage.

Mean

A measure of central tendency (for a distribution of values) defined as the average value of a
variable in a sample and calculated by adding together all the values observed in a data set and
dividing by the number of values observed.

Mortgage

A mortgage is a pledge of real estate collateral to secure a debt. Also, it is a legal document
describing and defining the pledge. The mortgage may also include the terms of repayment of
the debt. It is also referred to as a deed of trust.

Mortgage Broker

A real estate professional who represents an array of banks seeking to issue mortgages. The
mortgage broker meets with a customer, assists with the application, and facilitates the
mortgage process on behalf of the borrower and the bank. Generally, in the case of residential
mortgages, the mortgage broker is paid a fee by the bank for this service.

Mortgage Insurance

Mortgage insurance is insurance that protects the lender in case the home buyer does not
make their mortgage payments. Typically, a borrower would be required to pay a fee for
mortgage insurance if their down payment is less than 20%.

Net lease

A lease in which the tenant pays, in addition to rent, all operating expenses such as real estate
taxes, insurance premiums, and maintenance costs.

Non-Compete Clause

This clause prevents the landlord from leasing any other premises on the development to a
direct competitor of yours or another tenant operating the same type of business. It might be
worth considering such a clause to protect your investment for the long term especially if you
are in the service industry and expect a lot of walk-in traffic.

Notarize

Some legal documents, including certain leases and contracts of sale, are notarized by a
certified Notary Public to verify the authenticity of a signature.

Neutral leverage

An investment situation in which the cost of borrowed funds is exactly equal to the yield
provided by the investment.

Obsolescence

In reference to the inadequacy, disuse, outdated, or non-functionality of facilities,

infrastructure, products, or production technologies due to effects of time, changing market
conditions, or decay (a factor considered in depreciation to cover the decline in value of fixed
assets due to the invention and adoption of new production technologies, or changing
consumer demand).

Open Listing

An open listing is an apartment for sale for which the owner has not signed an exclusive
agreement with a real estate broker. Many brokers may represent the seller, or the seller can
promote the property independently.

Operating expenses

Cash outlays necessary to operate and maintain a property. Examples of operating expenses
include real estate taxes, property insurance, property management and maintenance
expenses, utilities, and legal or accounting expenses. Operating expenses do not include capital
expenditures, debt service, or cost recovery.

Outgoings

Costs incurred by the owner of an interest in property, usually calculated on a yearly basis. E.g.
management, repairs, rates, insurance and rent payable to the holder of a superior interest, as
appropriate to his contractual or other liabilities. It is prudent to make annual provision for
future items involving expenditure at intervals of more than one year.

Oversupply
In reference to commercial real estate, oversupply is a stock or supply of a given commercial
property type that is greater than that which can be cleared under prevailing prices levels and
market conditions (for example, excess supply). Also, a phase of the real estate market cycle
denoting that period of time in which commercial real estate markets become saturated with
units due to overbuilding.

Partially amortized mortgage loan

The payments do not repay the loan over its term and thus a lump sum (balloon) is required to
repay the loan. Participation mortgage a loan secured by real property, with a stated interest
rate that also provides for a share to the lender in annual net cash flow, gain on sale, or
proceeds from refinancing the property. (Real Estate Information Standards)

Passive Loss

A passive loss is a loss generated by investment real estate when real estate is not the
taxpayers primary business. Loss in excess of income may not be fully recognized for tax
purposes in the year it was incurred.

Patta

A Patta is an important legal document issued by the government in the name of the owner of a
particular land or plot. This land revenue record establishes the ownership or possession of the
property.

Penthouse

A penthouse apartment refers to the apartment on the highest floor in a luxury, high-rise
building.

Percentage Lease

A percentage lease refers to a lease that has a rental amount that is a combination of a fixed
amount plus a percentage of the lessees gross sales.

Perfecting a Loan

When a loan is issued against a personal property, it is recorded in the county clerks office
against the name of the borrower. The recording process perfects a security position against
the collateral.

Positive leverage
Borrowed funds are invested at a rate of return higher than the cost of the funds to the
borrower.

Principal

The portion of a loan payment used toward reducing the original loan amount.

Proprietary Lease

The lease issued by a cooperative corporation to each tenant-shareholder prescribing his or her
right to occupy a specific apartment and his or her general obligations as an owner and tenant.

Quadruplex

A quadruplex is an apartment with four levels.

Qualify

First stage of four-stage transaction management process pertaining to the process of gathering
and evaluating information to measure a clients readiness, willingness, and ability to
consummate a transaction. The acronym QUALIFY represents the considerations of quantify,
usage, authority, latitude, intention, financial, and yield involved in the qualify stage.

Rate Cap

A rate cap is the limit on interest rates during the term of an adjustable rate mortgage.

Real Estate Broker

State-licensed agents with expertise in the leasing process. A good broker will not only help
you find a space, but also help you in all aspects of the lease transaction. Because most brokers
receive a commission or fee from the landlord or seller they represent (via a representation
agreement), its worth doing your research to find a good one; a real estate lawyer can often
offer advice in this regard.

Real estate investment trust (REIT)

An investment vehicle in which investors purchase certificates of ownership in the trust, which
in turn invests the money in real property and then distributes any profits to the investors. The
trust is not subject to corporate income tax as long as it complies with the tax requirements for
a REIT.
Real estate trends

Long-term movements or tendencies in the demand for commercial real estate (which can
typically last for years or decades), usually tied to macro-economic or business cycles.

Recession

A period of reduced economic activity or a general economic downturn marked by a decline in

employment, production, sales, profits, and weak economic growth that is not as severe or
prolonged as a depression. As a result, sales in real estate markets are slow, property values
and price levels are flat or decreasing, and there is virtually no construction of new stock given
excess supply of units in most real estate markets.

Referral Fee

A referral fee is a percentage of a brokers commission paid to another broker for the referral of
a buyer or seller.

Sales Comparison Approach

The sales comparison approach is an appraisal tool for estimating the value of a property with
other similar properties that have sold recently.

Sales comparison value

An estimate of value derived by comparing the property being appraised to similar properties
that have been sold recently, applying appropriate units of comparison, and making
adjustments to the sales prices of the comparable based on the elements of comparison.

Security Deposit

A payment required by a landlord to guarantee that the tenant meets his or her obligations
under the lease and to guard against any potential damages that may be incurred during the
term of the lease.

Step-up lease

A lease in which the rental amount paid by the lessee increases by a preset rate or set dollar
amount at predetermined intervals. A step lease is a means for the lessor to hedge against
inflation and future maintenance or operational expenses.

Street-based mapping
Relatively easy-to-use GIS applications that allow the user to map objects such as commercial
properties or retail establishments by street address.

Suspended losses

Passive losses that cannot be used in the current year are suspended for use in future years or
at the time of sale.

Tax Abatement

Tax abatement is a financial incentive offered by a local or municipal government to stimulate

development in a particular area. The owner of the property and/or the developer has reduced
taxes for a specific period of time, typically 10-15 years. The taxes are raised incrementally to
the full tax burden over the period of a few years.

Tax savings (capital expenditure)

Entry on the tenants Cash Flow Form. It refers to any tax savings associated with any capital
expenditure by the tenant in terms of the site or major, unusual business expenses incurred to
make the new office efficient for the business. The amount of tax savings is calculated by
multiplying the annual deduction amount by the tenants tax rate.

Tenant Improvements

Defines any improvements to the leased space either by, or for, a tenant. If you expect to make
lots of improvements to the space, its worth negotiating these with your landlord and trying to
get as much of these costs covered as you can. The Tenant Improvement (TI) Allowance or
Work Letter defines the fixed amount that the landlord will contribute towards these
improvements, and costs over this amount are then covered by the tenant (also known as the
Tenant Finish Allowance).

Time value of money (TVM)

An economic principle recognizing that a dollar today has greater value than a dollar in the
future because of its earning power.

Title

The legal term for the evidence that the owner is in lawful possession of the land and property.

Total Existing Inventory

In reference to commercial real estate, it is existing and currently available supply or stock as
represented by the total number of units or total amount of space available of a specific
commercial property type in a given market at a particular point in time.

Unsold Shares

Shares of stock in a cooperative corporation transferred to the sponsor at the completion of the
conversion process. The sponsor normally gets special rights to rent and/or sell these shares
(representing special apartments) without board approval.

Urban System (city as a system)

A complex and structured urban environment or system composed of highly diverse,

interacting, and interdependent parts and activities aggregated or organized in such a way as to
serve a common purpose and/or satisfy the needs and wants of people residing in and
dependent upon that system.

Useable Area

Rentable area, less certain common areas that are shared by all tenants of the office building
(such as corridors, storage facilities, and bathrooms). Also defined in office buildings as the area
that is available for the exclusive use of the tenant. Useable area = rentable area building
efficiency percentage.

Vacancy Rate

The vacancy rate is the projected rate of the percentage of rental units that will be vacant in a
given year.

Valuation

Valuation establishes an opinion of value utilizing an objective approach based on facts related
to the property, such as age, square footage, location, cost to replace, etc.

Vesting Options

Vesting options are choices buyers have in how to acquire property.

Walk Through Inspection

The inspection of a property immediately before the closing to ensure that the property does
not have any new damages.

Wage Assignment

The procedure of taking money directly from an employees compensation under the authority
of a court order, in order to pay a debt obligation. Wage assignments are typically a last resort
of a lender to receive repayment from a borrower who has previously failed to pay their debt
obligation.

Wetlands

Wetlands are federal and state protected transition areas between uplands and aquatic
habitats that provide flood and storm water control, surface and groundwater protection,
erosion control, and pollution treatment.

Words of Conveyance

Words of conveyance are a stipulation in a deed demonstrating the definite intent to convey a
specific title to real property to a named grantee.

Wraparound Mortgage

A wraparound mortgage is a junior mortgage in an amount exceeding a first mortgage against

the property.

Yield

The yield refers to the return on an investment.

Zone

An area of a municipality or specific building that is zoned for a specific use, such as residential,
commercial, etc.

Zoning

Zoning are the laws regulating land use.

Zoning Ordinance
Zoning ordinance is a statement settling forth the type of use permitted under each zoning
classification and specific requirements.