Should real estate be bought in a flash?

Author – Saurabh Kumar
Flash sales have now come to a product that is usually bought after much planning—residential real estate. Online portal 99acres.com, along with digital marketing firm Amura Marketing Technologies Ltd, is organizing the Indian Realty Flash Sale (IRFS), from 26 June to 28 June.
Buyers will get discounts and offers on completed and under-construction projects by around 50 developers from across India that will be available. Interested buyers have to register at www.irfs.in (12-25 June). They can then see the details of various projects and also indicate their interest.
“The idea is to create an impulse in the real estate space, which is facing a mixed sentiment right now; there is uncertainty in the minds of customers,” said Narasimha Jayakumar, chief business officer, 99acres.com.
Though macroeconomic indicators have improved, the Reserve Bank of India has cut policy rates and the finance minister has urged banks to pass on the benefit to customers, the real estate space remains stagnant. Unsold inventory in six metro cities was 668,000 units (March 2015), according to realty consulting firm Liases Foras.
“We are targeting those customers who are holding on to cheques in the expectation that the markets will bottom out,” said Vikram Kotnis, managing director, Amura.
In IRFS, builders will come to customers; no brokers will be involved. On the days of sale, developers will come up with various offers. Interested customers can download the respective coupon code. There is no upfront payment or registration fee. Within seven days or till stocks last, the customer has to redeem the coupon by actually booking a residential unit. “People will have to move fast,” said Kotnis. Inventory worth Rs.2,000 crore is expected to be on offer across price segments.
“We are looking at young professionals in late 20s or people in their 40s who may want to upgrade their housing. At any point, around 2 million people are seeking to buy a house. This is to attract those 40% of customers who are on the edge, waiting and watching,” said Jayakumar.
Reality check
Buying a house is the biggest purchase for most people. Is a flash sale the right way to do it?
“We have curated a list of high grade projects with reputed builders and which are either complete or close to completion. This rules out chances of delays,” said Jayakumar. But delay is not the only hiccup in buying a property. A Mumbai-based bank employee, who requested anonymity, bought a flat in one of the projects in Mumbai suburbs which is also associated with this sale. “In the original plan, there was a children’s park, a landscaped garden and other amenities. On possession I found that either they were not present or are not of the standard promised. Repeated mails and calls to the developer for clarification have remained unanswered,” said the bank employee. Mint has seen these emails. Attempts to speak with the developer did not elicit any response.
Jayakumar, however, said they have tried to ensure clean inventory for the sale. “One or two projects may be facing problems but broadly we have tried to offer the best,” he added.
The sale’s deal-orientation may allow customers to buy at the correct price, while developers will be able to liquidate inventory. But the onus to find the right deal is with customers. For instance, even if a person has downloaded a coupon, she can make the payment after physically checking the property.
“This is a good marketing strategy, but the offline experience is as important as the online one. A strong engagement during the process will be important for closure of deals,” said Ashwinder Raj Singh, chief executive officer, JLL India.
The organizers expect 100,000 registrations, of which 40-50% may download coupons, and then a fraction may redeem.
“Customers are not buying a television or a shirt. They are going to part with an important part of their wealth. So, it should only be done if there is a need and an existing plan,” said Singh.
Though it is still to be seen what offers come up, the basic tenets of buying a house should be put to use. The checklist should include developer’s credibility, affordability, quality, and easy liquidity if property is for investment. If a project get a tick mark on all checkboxes and a good deal is on offer, it’s always a good time to buy a house.
Source – Livemint.com,  Wed, Jun 17 2015

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