6 Property Terms You Must Know Before You Buy a House

6 Property Terms You Must Know Before You Buy a House

For first-time buyers of property, the sheer range of technical terms used by the real estate industry may be mind-boggling. From built-up area to floor space index, the technical terms used by dealers and builders alike might unnerve a novice, who is new to the whole business of real estate. But, we are here to make your life easy. Here are a few terms that might come handy while you are searching for your dream home:

Carpet Area: Sorry folks! Carpet area has nothing to do with the Persian rug you are planning to put in the middle of your living room. Simply put, it means the actual living space enclosed within the four walls of your apartment. This does not take into account the thickness of the walls or the common areas for that matter.

Built-up Area: This includes the carpet area, the thickness of the wall and the balcony area until the inside wall

Super Built-up Area: This area includes the built-up area plus area included in common areas like lifts, shafts and stairs, etc. The built-up area plus the share of all common areas when equally divided among all the owners make up the super built-up area of individual units.

Floor-Space Index: Floor-Space Index or Floor-Space Ratio is the ratio of the combined gross floor area of all floors compared to the total area of the plot. This differs from one locality to another. The higher the Floor Space Ratio, the greater will be the cost per square foot.

Collateral: Collateral is an asset that guarantees the repayment of a loan. The borrower risks losing the asset if the loan installments are not repaid properly on time.   

Pre-Launch and Ready-to-move properties: A property which is complete, has all the utilities, and has received all the necessary permissions including occupancy certificate is called a ready-to-move property. Pre-launch properties are those that do not have all the approvals but are expected to receive them soon.

By: Ratnabir