Thousands of terms are generally known by their acronyms in the large field of real estate. The top 12 abbreviations used in real estate are shown below.

Would you comprehend if the vendor of the property told you that you must pay the PLC or that they have just got the OC? Do you know what FAR stands for? Do not worry if you answered NO to all of these questions. We've included some of the terminology you'll hear most often while buying a home in real estate.

Market Value (MV)/Basic Sale Price (BSP)

The base rate per square foot at which a developer or owner offers the property is known in the real estate industry as the Basic Selling Price (BSP) or Market Value (MV). It does not include any other unstated fees or costs, such as taxes, Goods and Services Tax (GST), preferential location fees, or other maintenance costs.

PLC, or Preferential Location Charge

A house buyer must pay a Preferred position Charge (PLC) in order to obtain a specific unit with a favourable position inside the development. Buyers frequently seem to like apartments that either face the busy street or the beautiful garden. Some purchasers even specify the floor they wish to reside on. Buyers must pay the PLC, which is based on the super built-up area of the aforementioned unit, in order to obtain such dwelling units. It is calculated per square foot and is based on a number of variables, including the project type, the property's location, the climate, the calibre of the building, and the floor selection.

Charges for External Development (EDC)

When the development plan is approved, the builder pays External Development Charges (EDC) to the local government for the upkeep of amenities in the area. These fees change based on the size of the dwelling unit. Land area and built-up area are both used to calculate EDC. Homebuyers are required to contribute up to 10% of the apartment's base price. Roads, water supply, sewage and drainage systems, energy supply, solid-waste management, and disposal are all considered exterior development works under the new real estate act, RERA.

Loan-to-Value (LTV)

The loan-to-value (LTV) is the percentage that home lending businesses are permitted to lend compared to the overall worth of the property. The loan-to-value typically varies from 75% to 90% of the total cost of the property. A larger loan amount and a smaller down payment result from a greater LTV. For instance, the maximum LTV would be about Rs 90 lakh if you applied for a house loan for a property valued Rs 1 crore.

For loans up to Rs 30 lakh, the Reserve Bank of India (RBI) has established a maximum LTV of 90%. LTV will be 80% for any loan between Rs 30 lakh and Rs 75 lakh. An applicant may receive a maximum LTV of 75% for house loans that are more than Rs 75 lakh. The age of the application, credit score, and other obligations of the applicant are among the many variables taken into account when calculating the LTV.

Power of Attorney (POA)

A power of attorney (POA) is a legal instrument that grants the attorney or agent the authority to deal with the owner's property while the owner is not present physically. This might include being in the hospital, deceased, or abroad. Typically, power of attorney is discovered on NRIs, allowing a person or an agency to decide whether to sell. These agreements are formed for a predetermined period of time.

Certificate of Completion (CC)

A developer can obtain a completion Certificate (CC) from the local municipal authority as legal documentation confirming the construction work was finished in accordance with the approved building plan. Make sure the builder gives you all the necessary documentation, including the completion certificate, before you sign the contract. Even if the project has all necessary connections, such as a water supply and power, the builder must still get this mandated certificate. Without the certificate, the structure is unlawful, and the local government is free to disconnect the essential services at any moment.

Occupation Certificate (OC)

An occupancy certificate (OC), which certifies that a building or a unit complies with building standards and is in a condition that is fit for habitation, is a legal document that a local governing authority issues to a project. However, there are regional variations in the certification process and its issuance. The occupancy certificate serves as evidence that the structure or property is fit for human habitation.

Floor Area Ratio (FAR)

The floor area ratio (FAR) measures how much a building's gross floor space compares to the size of the land parcel on which it is being built. FAR standards vary from city to city in India. Between 1.3 and 3.25 is its range. The FAR of a building determines the maximum height and number of storeys that may be constructed on a plot of land, which has an effect on the property's value.

EMI, or equal monthly installment

The sum that must be paid each month to repay the loan to the lending bank is known as the Equal Monthly Installment (EMI). The house loan EMI is influenced by a number of things. The wage, occupation, age, education, number of dependents, assets, obligations, credit history, and length of the loan are some of the fundamental considerations.

CIBIL

The Indian credit information corporation CIBIL Credit Information Bureau (India) Limited, also known as CIBIL, keeps track of all credit-related activities of both individuals and businesses, including house loans. Before submitting an application for a house loan, the applicant must review his or her CIBIL score. A higher CIBIL score will expedite and simplify the mortgage process. Banks and other financial organisations review a credit score or summary to assess a person's credit worthiness before making a final loan decision.

No Objection Certificate (NOC)

A No Objection Certificate (NOC) is a significant legal document needed when purchasing real estate. A unit is certified as not violating the rules and regulations of an organisation, agency, or institute by the issuance of such a legal certificate. In order to prevent any legal difficulties, applicants are required to get a NOC from the relevant government agencies prior to establishing a dwelling unit. Any urban development authority or other relevant entities will not award a NOC to a dwelling unit that breaches any of the building ordinances. Following thorough, open, and impartial inspections, the local government awards a NOC.

ROI (return on investment)

A standard statistic for assessing the return on your real estate investment is return on investment (ROI). The investment cost is assessed before calculating the ROI. ROI is calculated by dividing the return on investment (ROI) by the investment's cost.

ROI is calculated as (Gain from Real Estate Investment - Costs Associated with Real Estate Investment) / Cost of Investment.

Source From:- navimumbaihouses