8 Terms That You Should Know About Real Estate
If you are hunting for an apartment/ flat to buy, you come across various terms, that your broker or builder use, associated with property, that may seem unintelligible to you. For instance, while estimating the area of flat, phrases such as Super Built Up area, Built up area and carpet area are regularly called upon to make you understand the flat size. For a layman, these phrases seem puzzling and the person is often left confused. To end this, we present you a list of most commonly used jargons in the real estate sector and their simplified explanation. A quick 5-minute read will ready you to talk like a pro with real estate people.
- Carpet Area: This is probably the simplest of all the technical words. The term “carpet area” indicates the total area that can be covered by you while laying a carpet wall to wall. Technically speaking, it is the area inside the apartment that excludes the thickness of the internal walls and space enclosed by common areas such as lift, balconies, stairs, lobby etc. This is essentially the net usable area inside your house that will give you an approximation of the tangible space available at your disposal.
- Built-up Area: As the name implies, the built-up area is the area of a unit in totality. Visualize the cubic structure you see of your house from a distance, the built-up area is the total area of that cube. This includes the added up space available as carpet area + the wall area + ducts and ½ the terrace space. Furthermore, the term area refers to the thickness of the wall and not the surface area. Generally, these constitute 20% of the buildup area and increases by 10% if other areas are included such as a balcony, flower beds etc.
- Super Built-up area: A summation of Build area + cumulative total of the common areas such as corridor, lifts, lobby is the Super Built-Up area. Many a times builders also include regions of shared amenities such as play courts, pool, clubhouses, garden etc. This term thus is used in case of multi-dwelling units such as apartments and complexes. A developer advertises this super built-up area, marks it up for sale and prices the customer for it, hence also known as the saleable area. In value, It is usually 25% more than the buildup area.
- Loading factor: Loading factor is one of the most crucial term you should know about while going for buying a house. Consider this, most houses are sold on Super Built-up area which is also called saleable area and mostly the rates are multiplied to this area to infer actual cost of the flat. Now, loading factor is the thing that determines how much area you get to live in.To simplify, loading factor is the component that is expressed as relation between Super Built-Up area and carpet area. Take an example. If super built-up area is 1400 sq ft and loading factor is 40%, then that carpet area that you will get is 1400 / ( 100 + 40) = 1000 sq ft.
- Rate per Square Feet: This is the calculation of the cost each square foot area of the house. It is obtained by dividing the total price of the house by its total area. For instance, if a house of 1500 square feet is marked up at a price of 800000 INR, its Rate Per square feet= Rs 800000/ 1500 = Rs 533. 33 . Although as simple as this may sound, the figures aren’t quite reliable to deduce the best deal in the market. Reason being, the pricing of a flat/apartment depends on a plethora of factors such as its locality, landscaping, condition, interior décor etc. Rate per Square feet can calculate whether or not prices are mounting or falling, but it does not help us decide if one house is a better deal than the other, simply because of these various factors indicative of each property.
- Floor Space Index: It is defined as the ratio of a property’s total builtup area to the land area upon which it is constructed. It’s calculated value can hold different figures depending upon the kind of building in question- Ordinary, Special, and Multi Storeyed Buildings.
- Credit Score: This is a numerical number that defines a person’s creditworthiness. It is a 3 digit number that ranges from 300- 850, 850 being the top value a person can achieve. Higher the score, the more financially secure a person is thought of to be.
- Open Space Ratio : Open Space ratio refers to the total open space area by total land area proposed for development.