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The Deal Of A Furnished House
Buying a home is no longer limited to paying for the cost of four walls and one roof. It has now penetrated deep inside the space between these walls. The kind of furniture and accessories that are present in the house determine its cost.
You buy a fully furnished flat, does it work out to be a smart deal? Western suburban developer Ashok Patel does not feel it is so. "A developer will add on the cost of furnishing to that of the flat, and pass it on to the buyer. Does it really make a difference whether you buy furniture on your own or get it from the builder?" he asks. Hes not mentioning names, but says some projects which offered furnished flats in the past did so at a higher price than what it would have cost the buyer.

Boman Irani, MD, Keystone Group looks-at the issue from the angle of buyers having become more demanding, and feels builders are flexible enough to give the best to their customers as per their requirements, as also that they help their customers with the choices available. "It depends on buyers requirements and choices. Generally people tend to go according to their choices and tastes whenever they have enough buying capacities," he points out.

Pankaj Kapoor of the real estate ratings and research agency Liases Foras takes up the angle of individual preferences. "This concept was first started by the Evershine Group in their Andheri project," he recalls. The issue here was whether a buyer would be open to having his home interior be a clone of all other homes in that project. "It is a mater of simple economics: the developer buys in bulk and so gets a lower rate than what a buyer would have got as a single customer. But the trade off here is that everything in that package deal has to be common to get the lower price, and-this leaves the buyers individual choice out of the picture," he says. Colours, shades, models and designs will all be the same in all flats, it can actually get monotonous, he feels.

Rajendra Karia, past president of the association of Real Estate Agents feels only two segments of the buyers would opt for furnished flats: when bought by a company for its staff, and the economy buyers segment. "The investors who buy a flat to lease out to companies also prefer buying such a flat, it is an easier option for them as compared to taking the trouble of buying individually," he feels. The economy buyers segment, he says, would opt to take a furnished flat as there is always a fiscal issue when buying furniture, it is easier to leave the decision on the builder when it comes to furnishing styles-the models, colours and so on, he adds.

Echoing this sentiment is V P Lobo, Director- Strategies and Policies, Agarwal Group. "It makes sense for a home buyer whos taken a home loan to buy the flat, as in most cases, these would have used up most of their finances, so a furnished home is a comfortable option, he feels.

Had the buyer not opted for the furnished flat, would it make a big difference when it comes to pricing? "No, it is not a major difference," he explains. "We buy in bulk and get lower prices and we can pass on this advantage to our buyers. If they buy on their own, it will definitely be a more expensive proposition," he says. The Group has such a scheme operating at its projects in Dahisar, Mira Road, Vasai and Nalla Sopara, and Lobo says customer reaction is enthusiastic. "When I said we get furniture in bulk, it does not imply poor quality. In our furnished flats, the buyer will not get Chinese stuff, which is perceived to be of poor quality, we give good quality Indian wooden furniture," he adds.

Summing up the issue, J S Augustine, Corporate Advisor, Acme Group says a furnished flat spells value for money. "When you move to a new home, why take along old furniture, and let the new home lose some of its freshness?" he asks. If you look at a builders marketing strategy, he explains, there are two options: either a cash discount or a value addition, and the furnished flat is definitely a value add, he feels.

Even going by the adage that the builder will add on the furniture cost to that of the empty flat while calculating cost of a furnished flat, Augustine says the difference in interest rates of a home loan vis-a-vis a furniture loan more than make it a sweet deal. "If you have to take a loan for furnishing your new home, it comes at a interest rate on par with a personal loan, then it does not have tax savings, so obviously the buyer of a furnished flat who is availing a home loan will derive this advantage, plus you have the feel good factor of having moved into a new home: in the real sense, a furnished flat translates into a fresh start," he feels.
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Posted on : 15/11/2005
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