Tag Archives: Builder-Buyer Agreement

Relationship management lacking in Indian realty

Posted on by Track2Realty
Track2Realty Exclusive

Bottom Line: Relationship management on the lines of service industry can give much-needed facelift to Indian real estate.

Best practices, Best practices in Indian real estate, Professional practices in Indian real estate, Cheating in real estate, Builders cheating buyers, Consumer complaints in Indian real estate, India real estate news, Indian realty news, Real estate news India, Indian property market news, Track2Realty, Track2Media Research“When I entered the office of this developer I was surprised to note there were no bodyguards and security guards surrounding the office. It was just a pale security guard at the gate which looked quite contrary to the way most of the developers operate nowadays. It has been all the more surprising since this developer operates in slum redevelopment where the use of muscle power is a common reality. And yet the developer operates like any other corporate sector and not a builder. On being probed I found out that the trick lies in his relationship managers who manage the clients in such a professional manner that there is no major confrontation between the builder and the buyer,” Pranay Vakil, Chairman of Praron Consultancy shares his experience.

Investing in relationship management to earn the trust & goodwill of the homebuyers is something that the Indian real estate has not adopted as an industry practice. CRM or Customer Relationship Management is something that every developer today boasts of, but this relationship hardly goes beyond attending phone calls of aggrieved buyers and online registration of grievances.

Whereas the kind of relationship experience that Vakil is sharing is more on the lines of KYC (Know Your Customers) where the relationship managers have all the info about the homebuyers, his grievances, if any, and they are constantly met to update them on the developments with the housing project. This builds a level of trust and good will.

Divya Gehlot, a homebuyer agrees that relationship management of the developer not only breaks the ice but also goes a long way to understand each others’ point of view, thereby less acrimony. She had a similar experience where after booking the apartment the relationship manager did not forget even wishing her on the birthdays and anniversaries in addition to keep updating on the developments of the project. The dedicated manager was always there when she wished to visit the site.

“I was even invited by the relationship manager to show me many options for the tiles of the floor that they are going to use. I had the liberty of choice and since everything was done in a transparent manner I am not complaining now even though the delivery of the project is some eight months delayed. They have explained me the reasons of delay and I feel the reasons are beyond their control,” says Divya.

The question is how many developers are maintaining that kind of relationship management with the homebuyers. Are they even bothered to talk to the customers once the booking is done? As an industry practice today, the only interaction from the developers’ side is when they send the demand note for further payment. In some cases they keep updating over emails but one-on-one relationship management is a critical missing link in Indian real estate.

This raises a fundamental question as to unlike other matured industries why Indian real estate has failed to focus on relationship management with buyers and prospective buyers.

Rattan Hawelia, Chairman of Hawelia Group tries to explain method in the madness when he says that other matured industries which are focusing on relationship management are usually more service oriented whereas real estate has always been addressed as a product based industry. As per the traditional mindset, most of the developers consider that a homebuyer is a one-time consumer because of which they have always failed to explore the benefit of relationship management. Consumer connect is by and large a missing link with direct interface with homebuyers.

“I must admit here that the real estate sector has gone overboard on brand campaigns and publicity rather than identifying the gains by connecting with the customer. Exploring this medium by gaining trust and satisfaction of one customer for lifetime will surely open threshold for many satisfied referred clientele and direct boost in sales can be accounted. So far marketing communication has been majorly based on the perception and exposure at the basic level of the first generation business families in Indian realty sector despite the fact that relationship management is a key and effective component to connect with the customers,” says Hawelia.

How far is the perception that the nature of business does not support to have dedicated relationship managers a deterrent? Analysts maintain that due to the demand and supply gap the developers did not took a conscious call to defeat this perception and make efforts for word of mouth publicity through dedicated relationship management with the customers.

Of late, with the advent of second generation and overall changes in the ecosystem there has been sharp contrast in the nature of business. Now some of the developers have started understanding the benefits of relationship managers, and since the first visit of a prospective buyer a single point contact is being appointed who is responsible for all the needs of the buyer from readily sharing the required information & timely responding to their queries to arranging technical support from sales/administration/loan/construction/other department(s).

Such services helps in boosting the confidence of the customer manifolds and also supplements the mindset of Indian consumer who is investing his lifetime savings and hence wants to be treated as a preferred client.

In terms of the cost & benefit analysis of having a dedicated relationship manger for a group of customers, the operating methodology of most of the developers suggest there would not be major cost implications because the business model will remain more or less the same; though certain functional differences would be there in terms of promotion, lead generation and connection with the prospective customers. Such move will create a better understanding between the developer and the prospective customers which will surely help in building goodwill of the company.

The real deterrent is probably the developers’ inability to change with the changing market dynamics where the homebuyers are increasingly getting aware and demanding with their rights.

A dedicated relationship manger for the homebuyers can close doors to the market perception but what makes the developers uncomfortable is the fact that it also closes doors for deliberate delays and cutting corners in construction, as the homebuyers will more or less ask questions on a regular basis. Are the developers open to this customers’ scrutiny? The answer in today’s context is a clear No.

By: Ravi Sinha

Read silent marketing clauses before home buying

Posted on by Track2Realty
Track2Realty Exclusive

Bottom Line: It is not just marketing exaggerations that can dupe a homebuyer, even the silent or misleading clauses can be taxing. 

india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, india news, property news, real estate news, India Property, Delhi NCR real estate, Mumbai Real Estate, Bangalore Real Estate, Pune Real Estate news,Track2Media, Track2RealtyShweta Jha, a journalist was on a house hunt in Bangalore. After much research on the housing market, upcoming locations and price comparison, she finally decided to buy an apartment on the Outer Ring Road where the developer has been openly advertising the lowest BSP (Basic Sale Price). With the budget constraints that she had, it came out as an ideal solution to buy a house that was cheapest one. Not really!

Fortunately, she came across an informed lawyer who opened her eyes with comparative price chart and additional loading by the respective developers in the market. She got to know that the developer had so much additional loading that it was actually the costliest project in the region.

“While as a journalist I am conscious of the fact that there are exaggerations with claims in the marketing brochure of all the developers, my property hunt also taught me what all they try best to conceal. The worst part is that there is a conspiracy of silence by the collective consciousness of builders against the additional hidden loading on the homebuyers,” points out Shweta.

A closer look at the sales methodology of the developers suggests while they exaggerate some USPs of the project, they very smartly conceal the information to make their offer look very lucrative to homebuyers. These are:

Lower BSP: This sounds like the most affordable to the ears of homebuyers. But in reality it amounts to additional charges like PLC, Club Membership, Parking, Electricity Fittings, Sanitary Fittings, and many others. They deliberately keep the BSP lower not only to sound as the cheapest offering, but also the fact that the brokers’ fee that they pay is subject to BSP only.

Loading Percentage: No builder would like to ever advertise the loading percentage. This amounts to the actual carpet area to be used as against the super built-up area that one is paying for. This includes even stairs and other common facilities. In many cases the loading is astronomically high to the extent of even 40-50% of the apartment cost.

Amenities challenges: It sounds reasonable to offer the project with amenities like swimming pool, kids’ play area, gym, tennis court etc. However, in reality the developers are silent over the density of the project versus the amenities on offer. In many cases, facilities like swimming pool etc are too cramped, if even 10% of the residents want to use it at a time.

Cost of facility management: The marketing brochure more often than not says the facility management charges will be decided at the time of possession. The builders prefer to be silent on this because many of the facilities, like Amphitheatre etc are great selling propositions for a select set of buyers but not worth usable for the most. However, the cost of facility management has to be borne out by one and all.

The question is how can the homebuyer make safe investments by doing their own due diligence before making a purchase decision. Surabhi Arora- Associate Director, Research at Colliers India suggests one should always do a location visit before making any financial commitment. She recommends to check the status of various infrastructure projects that the marketing brochures mention; for example, the future metro connectivity, flyovers, etc.

“One should ask about the amenities that the project will provide in the name of green, luxury, smart homes, etc. Ask for the total cost of the project, including all the other charges, stamp duty, etc. If you are considering more than one projects, compare the project offerings like flooring type, doors, windows, sanitary fittings, electric fittings, various provisions, etc. and the amenities like play area, garden area, car park, club house, temple, etc.  It is also important to check the built up and super built up area,” recommends Arora.

Considering that due diligence is a highly challenging job in the information-starved Indian housing market, this conspiracy of silence on part of the developers is a real challenge for the homebuyers. Yet, some of these key issues can at least goad them to make an informed choice.

By: Ravi Sinha