How to do a background check of a builder?

In today’s world as you all know real estate sector is one of the most complicated sectors of all. There are litigations and fraudulent behaviors of the Land developers, let alone the delay of the projects. In such a scenario, background check is imperative of the builder or the developer. The experts list the ways to do a due diligence of a project or the builder.

Ground Report

It is always advisable to get a ground report or a field report. Before you do that a quick glance in the internet review sites by typing in the name of the builder customer reviews and the project would help you a lot. The reason is that you will already know the project or the builder’s lacunas and the loop holes. This will help you in doing the field research. Then you need to go and visit the site and talk to past customers of the builders by location. You can also talk to the contractor regarding the payment of the company or the developer. This will give you an idea of the cash flow of the company and how soon can you expect the project to be completed.

Check if the builder is a member of the builder’s associations

A builder will always be marked ahead if he is a member of the CREDAI (Confederation of Real Estate Developers Association of India) or other bodies like the Builders’ Association of India (BAI). The reason is that these are self regulatory bodies in the realty sector who has strict guideline, if not followed the builders and developers have a chance to be blacklisted.

check CREDAI Membership for builders in Bangalore

Track Record

Track record is another important thing that has to be checked for the builder is most likely to behave in the future as they have behaved in the past. A discussion with the past customers will reveal the case. Insist on the transparency part of the builder that he has been maintaining with the customers. If there wasn’t much of transparency, that can be enough reason to cancel the builder.

Financial Stability

Checking the financial stability of the builder or the developer is a must. The builder will be able to deliver its projects in time if the management of cash had been proper in the past. The balance sheet of the builder is a good source to know about the financials of the builder. Few developers post the last year’s balance sheet on their websites. Others’ balance sheets can be obtained from the office of the concerned Registrar’s office (ROC). The website of the Ministry of Corporate Affairs also has the details for you to check. If the developing company is financially over-leveraged that is loan capital is more it’s better not to approach the company. You should look for the loans and the liability side and if you see too much of loans and debts it’s always advisable to refrain from booking with the company.

Crisil ratings:

Crisil ratings started in real estate in the year 2010 and it rates the projects of all the builders. Crisil Real Estate Star Ratings is called as CREST in short form. This helps you to see the assessment of Crisil of the projects. They also have a developer’s rating list which is all over India basis which also rates the builders. Click to check Crisil star rating for Bangalore projects.

Quality Certificates

The International Organization for Standardization9001 – 2008 certification gives you some kind of protection and tells you that the projects have a quality assessment. Thus if any builder or developer has the ISO 9001:2008 certification that particular developer can be expected to me more methodical and professional in its approach and quality processes. Here you can check for ISO standard Certification.