Compare sale prices across plans to evaluate benefit

If a developer allows deferred payments but hikes the sale price, the plan becomes less advantageous

- NAMRATA KOHLI

Gurgaon-based developer M3M has introduced a "Pehle Possession Phir Payment" plan, where buyers pay 20 per cent upfront, 30 per cent in the third year, another 30 per cent upon applying for the occupancy certificate (OC), and the final 20 per cent in the sixth year. Buyers must understand the nuances of a payment plan before committing to it.

Payment plans are designed to encourage fence-sitters to take the plunge. "Property prices have surged over the past two-and-a-half years, resulting in slower sales. Developers are offering flexible payment schemes to delay the start of EMIs for buyers," says Ravi Shankar Singh, managing director, residential transaction services, Colliers India. These plans are also offered by developers to avoid a price cut. "Price corrections remain a last resort, as outright reductions could undermine investor confidence and suppress market sentiment," says Keval Bhanushali, chief executive officer and co-founder, 1 Finance.

Construction-linked plans

In construction-linked plans, installments are linked to a project's progress. Buyers typically pay 10-15 per cent at the time of booking. Subsequent payments become due at various construction milestones, such as the completion of foundation, specific floors, and so on. This structure incentivizes developers to stick to the construction schedule. "Buyers also avoid large upfront payments or financial pressure at the time of possession," says Rajat Likhyani, principal partner, Square Yards.