The real estate business in Pakistan functions very differently from the rest of the world. In countries like UK & US, realtors have licensed that work within the bounds of rules and regulations. Property listings are made professionally, and interactive websites are dedicated to these listings providing clear pictures, and prices, giving trustworthy advice, legal assistance, and residence inspection services.
Meanwhile, in Pakistan, property businesses have been unrestricted for all. One can become a self-proclaimed real estate agent and start providing services without any license or authorisation. Under such services, several people end up having bad experiences because of such malpractices. In addition, real estate transactions involve paperwork that usually misses things, due to which transactions are slow and inefficient.
Real estate professionals and investors in Pakistan face exactly these kinds of problems. Therefore, a new model dubbed “OADD” introduced by Graana.com which means Ownership, Approval, Demand and Delivery. The new model will help in reducing inefficiencies in the real estate sector. The purpose of this model is to fulfil the needs of people, as well as to provide safe and secure investment opportunities. Continue reading to learn more about the framework of the OADD model and how it can influence investment decisions in the real estate sector.
Framework of the OADD Model
However, making an investment decision is not as easy as it may seem, particularly in countries like Pakistan, where land scams are prevalent and can cost a huge loss of money if you are unaware. So it is suggested that the investor conduct thorough research to choose the right options for investment. In addition, you also need to ensure that the real estate project you are investing in has passed through the OADD outline, which includes four factors for hooking your investment in the property market. Here are four major factors.
The importance of each of these factors will be discussed one by one.
It is necessary to verify who owns the land because, in some cases, the owner may not have the legal right to sell it. This can create many problems, so it is important to do due diligence before making property investment decisions. Because there are many cases where people give fake documents for the property, the buyer is in trouble after that. So in such ways, the benefits of ownership verification are countless.
Although document verification is proof of property ownership, you should authenticate ownership documents before purchasing a property to avoid investment blunders. Also, the verification of ownership assures all rights to the owner and proves that the property is free from litigation. It also grants the owner the right to sell the property, lease it, or rent it as he opts for it.
The second factor to consider is the approval status of the property, society, house or rental unit from the concerned regulatory authorities. Investing in an unapproved real estate project can be risky because if it turns out to be a fraudulent scheme, it would not be easy to get your money back. Additionally, unapproved projects may not offer the same protection and advantages as approved projects. Therefore, it is crucial to conduct research and ensure that the relevant authorities have approved the real estate project you are planning to invest in. Another reason for not investing in an unapproved project is that any unapproved development made on a project could be demolished or fined. So, it would cost you much money if you did not check the approval status regarding the property.
Here are all the 14 NOCs necessary for any property project:
Approved layout plan
Development project initial planning permit
Approved letter from Design Venting Committee (DVC)
Building plan approval letter from Building Control Directorate, CDA
Approved building plans vetted by the relevant authority
Third-party vetting certificates
Access road approval from CDA (where applicable)
Approved letter from National Highway Authority (NHA), in the case of GT Road
Height clearance certificate from Civil Aviation Authority (CAA)
Utility connection approvals
Approval letter for firefighting system
Approval from Pakistan Environmental Protection Agency (Pak-EPA)
Building completion certificates
Remember that investing in any real estate project without a NOC can be risky, as there is no guarantee that the project will be approved by the authority later on. This can lead to the project being cancelled or delayed, resulting in the loss of your investment. Therefore, checking the approval of the property or real estate projects will be a safe and secure investment.
There is another key factor that you should consider the demand for the property or project in the market. Suppose the property is in a prime location, indicating that the property would have high demand. If so, the property will appreciate in value, and hence you would be able to resell it at a higher price. Additionally, other factors can influence the demand, such as interest rate, overall economy and job market, and the affordability of the consumers.
However, measuring demand for a real estate project is a complicated task that can be affected by various outliers. Market trend data, data on the economy, demographics and land-use planning can be used to determine a project’s demand. Analysing these options can aid you in choosing the safe and secure investment option in the property market.
Lastly, in terms of delivery in the OADD model, you must ensure that the developer has a good delivery track record because trusting new developers can be risky, especially in a highly deregulated market. Hence, you should check the projects that the developer has delivered in the past because it will help you decide whether they will likely complete the current project on time. Besides you also check the local government or housing authorities to see if there are any complaints or lawsuits against the owner. By doing so, you can also consult with people having previous investment records with that project and ask them for investment suggestions before making any investment decision.
Ensuring ownership information, approvals from concerned authorities, demand, and delivery of investment projects should be thoroughly checked to enhance the chances of successful investment in the real estate market.