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Finally, investors can look forward to some transparency in Real Estate sector. The credit ratings agency CRISIL has launched real estate ratings in India, which would help buyers/ sellers and investors make informed purchases. This will be done on a project-specific basis and the rating will be assigned on a scale of one to seven stars after comparing it with other alternatives available in the same city.

This will bring transparency in the real estate industry as the projects will be assessed and benchmarked on various parameters and then the investors will be able to compare similar projects in the same city and make informed decisions.

Ofcourse, this looks very good and ideal on paper. It remains to be seen how it will be implemented in spirit. There may be lot of gotchas that the developer may make use of and once the rating system starts coming into effect, investors will come to know how beneficial it is.

The process would work like this: A developer commissions the agency and gives us access to various details needed for assessment. We take into account our parameters and rate the project. Once the developer accepts the rating, we go public with the rating and project analysis which will be made available to common man for free. Some of parameters on which the projects would be rated include the past record of the developer, the infrastructure he is erecting, finishing, timely completion, cost overruns, aftersales service, legal issues like title and project innovations such as green buildings. One surprising element is that the rating will be given only midway through the project and will be under surveillance till project completion, during which it can be revised.

This looks like a good starting point but will be actively watched by investors if this gets implemented in spirit.


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