An under-construction home is a trade. You pay in stages and often have more units to choose from. In return, you wait, while still paying rent somewhere else, and you carry the risk of delay. For many first-home buyers it is the right trade. These seven checks help you decide.
1. Can you afford rent and EMI together?
This is the big one. While the building goes up, you will likely pay rent plus pre-EMI, the interest on the part of the loan released so far. Add both together. Then add some months in case of delay. If that total is tight, a ready home may suit you better. Our EMI calculator lets you test different loan amounts.
2. Is the project RERA-registered?
Look up the registration number on rera.karnataka.gov.in yourself. The page shows the approved plan, the promised completion date and quarterly progress. If a project is not registered and should be, walk away.
3. Where does your money go?
RERA requires 70% of buyers' money to be kept in a separate account for that project, used only for its land and construction. That is a real protection. It does not remove delay risk, but it reduces the chance your money builds someone else's tower.
4. What does the payment plan link to?
In a construction-linked plan, each instalment is tied to a stage, like the foundation, each slab or the finishing. Make sure each payment is tied to a stage you can check, not just to a date. Before the agreement is registered, the builder can take no more than 10% of the cost, under section 13 of RERA.
5. Is GST on the cost sheet?
Under-construction homes attract GST. Ready homes sold after the Occupancy Certificate do not. Ask for a written cost sheet with GST, parking, deposits and charges as separate lines, so you know the full amount. At Reeva, the cost sheet is shared on request for the exact unit.
6. Has this builder delivered before?
Ask for a list of finished projects and visit one. Were they handed over close to the promised date? Did they have an Occupancy Certificate at handover? Talk to a resident if you can.
7. Do you know your rights if it is late?
Section 18 of the RERA Act gives you a choice if possession is delayed past the agreed date: withdraw and get your money back with interest, or stay on and receive interest for each month of delay. Read the delay clause in your agreement and make sure it is not weaker than the law.
A worked example: rent plus pre-EMI
All figures below are illustrative. Say you take a ₹55 lakh loan at 8.5% for 20 years. Your full EMI, once the whole loan is released, would be about ₹47,730 a month.
During construction, the bank releases money in parts. Suppose ₹20 lakh has been released so far. Your pre-EMI is the interest on that amount: ₹20,00,000 × 8.5% ÷ 12, which is about ₹14,167 a month. Add rent of ₹22,000 and you pay about ₹36,167 a month on housing.
Now plan for delay. If handover slips by six months beyond the date you planned for, that is six more months of rent, or ₹1.32 lakh, on top of pre-EMI. Keep that amount aside before you book.
How to check progress yourself
- Read the quarterly updates the builder files on the RERA website.
- Visit the site every few months, and photograph the same spot each time.
- Match each demand letter to the stage it names. If the demand says the fifth slab is done, ask to see it.
- Check that the bank's disbursement follows the same stage. Banks often send their own engineer.
Common mistakes
- Planning only for the full EMI and forgetting that rent continues.
- Choosing a time-linked plan, where payments fall due on dates, not stages.
- Signing an agreement whose delay clause is weaker than section 18 of the Act.
- Making changes to the flat by word of mouth, with no written cost.
- Paying the next instalment before the bank has confirmed the stage.
- Giving up the rented home before the occupancy certificate is issued.
Step by step from booking to handover
- Check the RERA registration and save the project page.
- Get a written cost sheet with GST and all charges listed.
- Get a loan sanction letter before paying beyond the booking amount.
- Read the draft agreement with a lawyer, especially the delay and cancellation clauses.
- Register the agreement for sale.
- Pay each instalment only against a stage you have verified.
- Ask for the occupancy certificate before taking possession, then inspect and list defects.
Your quick checklist
- Rent plus pre-EMI fits your monthly budget
- Six-month delay buffer set aside
- RERA page saved and progress updates tracked
- Construction-linked payment plan agreed
- Delay clause matches the law
Ready home or under construction: a plain comparison
- Ready home: you can see the finished flat, no GST if bought after the occupancy certificate, and rent stops sooner. Choice of units may be smaller.
- Under construction: payments are spread out and more units are often available. You carry rent and pre-EMI together, plus the risk of delay.
Put both options into the same monthly table, with rent, EMI or pre-EMI, and one-time costs, for the next three years. The cheaper column on paper is not always the calmer one in real life, so weigh how much waiting you can live with.
Whichever you choose, keep every demand letter, receipt and bank statement in one folder from the first day. You will need them for your loan, for any tax benefit you claim, for registration, and for a complaint if one is ever needed. A tidy folder is the cheapest protection a buyer has.
So, is it right for you?
An under-construction home suits you if you have a stable place to live for the next couple of years, can carry rent and pre-EMI together, and like the idea of a brand-new home with a fresh warranty period. It does not suit you if you need to move in soon.