Buyer beware! Caveat emptor! These high-flying expressions that look so very impressive on paper, have as less relevance when it comes to the Indian housing market in general and the property market of Delhi-NCR in particular. A number of home buyers recently contacted Track2Realty to know about the pre-launch scheme of one of the otherwise reputed builders of Noida. The home buyers wanted to know whether they should go for it, as they have seen the Facebook advertisement of the pre-launch scheme and the brokers are also asking them to show an EOI (Expression of Interest) with a cheque of INR 1 lakhs only.
The said builder carries a reputation of selling 30-50-% inventory in pre-launches, and then often stops fresh booking to later get maximum premium at the time of possession. Naturally, such a reputation is a tempting factor of FOMO (Fear of Missing Out) for an average home buyer. I am not taking the name of the builder here, which I normally do. It’s not that I am scared of false cases of these builders. But in this case the story is altogether different, and the fault doesn’t lie with the builder.
I cross checked the opening of pre-launch with the said builder, only to know that he is also getting phone calls by the brokers to invest in that (his own) project. Isn’t it a strange case study? Well, if only you know the ground realities of this property market, there is nothing strange about it. It is business as usual. The developer claims even the internal team is yet to work out on the design and specification of the project; forget about getting the sanctions and approvals.
But since there is buzz about the project with land acquisition and boundary walls erected with the developer’s branding, brokers are on prowl at their own will. Now you can understand who is spending on Facebook and other social media advertisements? And why is one doing so? The reality is that we are talking about an unregulated property market where brokers are running the show.
The cost of social media advertising is low, and often even the small-time brokers start running an ad campaign with as low investment as INR 5,000. The kind of brokers who know they don’t have access to these developers, and may not even get a chance to sell their projects are into practice of social media ads of large developers. They just play with the psychology of the buyers and advertise those projects that they know would sell on its brand recall value.
The builder that I am referring to sells his pre-launch inventory to his own set of selected investors, and not through brokers at large. But every broker in the market starts driving social media lead generation in his name.
This raises a fundamental question as to why re these brokers spending on social media advertising? Why are they collecting cheques? This is where the catch lies. Once you give the cheque (where you would be requested not to fill the beneficiary name as project company account is not clear now) these brokers would later regret that the project was overbooked and you didn’t get the allotment. And from here starts the real harassment of the buyers.
You will be coerced to buy a property of some other builder that these brokers are trying hard to sell. If you deny, you will have to run from pillar to post and use all your contacts and resources to get the cheque back. Many such buyers never have the resources to deal with the brokers and get their refund.
Even if you get the refund, using all your resources, your data as a potential home buyer is sold across the market. You will get end number of calls in the day & night asking you to buy a property. This is a unique cartel where you advertise in the name of any large-size builder as a pre-launch offer and then use all EOI (Expression of Interest) as data bank of potential buyer.
One can’t even blame the builder here because he has not authorized any broker to run this cartel of cheque collection and buyers’ data bank. But this is nevertheless a large issue of business ecosystem in this part of the world. And hence, I have a few questions:
Why don’t builders take legal action against such brokers when their name is used to dupe the home buyers?
Why do builders just overlook the existence of dummy website in their name?Why is RERA not taking suo moto cognizance when projects are so blatantly advertised as pre-launch offer?
Are government authorities only sitting over for land auction and necessary approvals to the builders?
Why no one within the system takes up such blatant illegal market practices?
The Supreme Court of India has in recent times made scathing remarks against wrong practices in real estate. The Apex Court has also delivered many landmark judgments. But even the Supreme Court has not been able to instill fear in the minds of erring builders and brokers. Why? You may not have a clear answer to this, but the larger question that home buyers have asked with Track2Realty is what should they do.
My advice is to stay away from such dicey lucrative deals in the market. Even if you find the offer as per your needs and within the budget, at least go to the RERA site and see the project registration and other details over there. And then make sure to deal with the builder and not through unsolicited brokers. Your problem is not just the greedy brokers but also your own impulse that is borne out of FOMO, and often even greed. Do your own due diligence or else add yourself as another number among millions of those being cheated in the housing market.
Ravi Sinha
X: RaviTrack2Media
Ravi Sinha is a journalist with over two decades of cross-discipline media exposure. He is the CEO of real estate thinktank group Track2Realty. He has been writing extensively on the real estate sector for more than a decade now. Evaluation of real estate brand performance is his core domain expertise and he has immense insight into consumers’ psychograph. He has conceptualised Track2Realty BrandXReport as India’s 1st & only objective & non-paid brand rating journal that is industry-accepted benchmark of brand equity & ranking of the Indian real estate companies.
Track2Realty is an independent media group managed by a consortium of journalists. Starting as the first e-newspaper in the Indian real estate sector in 2011, the group has today evolved as a think-tank on the sector with specialized research reports and rating & ranking. We are editorially independent and free from commercial bias and/or influenced by investors or shareholders. Our editorial team has no clash of interest in practicing high quality journalism that is free, frank & fearless.
Subscribe our YouTube Channel @ https://bit.ly/2tDugGl
