This is an educational writing how to not get bogged by builders offer price. You should know this before selling the land.
To let you understand, I am taking a scenario:
Scenario:
Suppose a land is valuated at Rs. 10 L (L = Lakh), it has the permission of G+6 construction now and will be allowed to G+9 in future. Let us take the land as 100 Kth. (Kth = Katha, SFt = Sq. feet, 1 Katha = 720 SFt). The price in surrounding locality is Rs. 2500 per SFt.
Now you sell the land at Rs. 10L per Kth.
Means, 10 L x 100 Kth = 1000 L = Rs. 10 C (C = Crore) is what you gain.
Now lets check what builder gains:
Expanse for Builder
A. Purchase Price = Rs. 10 C
B. Administration Price = 10% of A
C. Legal Price = 20% of A
D. Building Expanse (as per standard of kolkata and current market -economy scenario) = Rs. 850 per SFt.
Let Builder builds G+6, hence he have to forfeit 20% of Land area.
So, total area available with him is 80 Kth. as Land and
80 x 6 Kth. = 480 Kth. as area to be sold.
E. Area to be sold = 480 Kth.
Total expanse for area to be sold
= Rs. 850 per SFt x 720 SFt per Kth x 480 Kth.
= Rs. 850 per SFt x 720 SFt per Kth x 480 Kth.
= Rs. 29.38 C
F. Expanse for building = Rs. 29.38 C
Total Expanse = A + B + C + F
= 10 C x 1.3 + 29.38 C
= 42.38 C
Let us now convert it to sale-able area cost price.
= 42.38 C/ (480 x 720) = Rs. 1226
G. Cost price of flat = Rs. 1230 (approx)
Total profit of builder:
Selling Price of Flats - Cost price of Flats
= Rs. 2500 - Rs. 1230
= Rs 1270 (Per SFt.)
in Percentage to Cost Return per SFt is = 103.25 %
Builders total Earning = Rs. 44 C
Your Total Earning = Rs. 10 C
Now if you had learned then don't sell your asset low.
G. Cost price of flat = Rs. 1230 (approx)
Total profit of builder:
Selling Price of Flats - Cost price of Flats
= Rs. 2500 - Rs. 1230
= Rs 1270 (Per SFt.)
in Percentage to Cost Return per SFt is = 103.25 %
Builders total Earning = Rs. 44 C
Your Total Earning = Rs. 10 C
Now if you had learned then don't sell your asset low.
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