The internet has changed the way we work. The world wide web has greatly impacted the business world where digital marketing has become the most effective channel to drive consumption. Naturally, the real estate sector cannot lag far behind in the race to harness the power of the internet.
The internet’s role in real estate marketing
- Access to a massive client base.
- Most cost-effective marketing tool.
- Developers and brokers can communicate faster and more efficiently with prospective buyers.
Pertinent project information can be posted online, and inquiries generated can be attended to immediately via email and online chats. Recently, developers have started selling homes online. With the help of 3-D imagery and virtual tours, they are interesting buyers and persuading them to make the purchase online. Builders are hoping that property seekers will respond to the same impulse triggers that persuade them to buy consumer durables online.
Shortcomings of the virtual approach
On the surface, this approach seems novel and logical. However, the manner in which the Indian real estate market functions, works against this method. A home is by far the most cost-intensive investment that most Indians will make, once in their lives. A property purchase commitment is not one they can make with the same confidence and detachment required for a smaller commodity. The home-buying process involves personal inspection of a number of options. These include affordability, location, construction quality, legal sanctity of the project, facilities and amenities, reputation and reliability of the developer and appreciation potential. With a virtual representation, it is impossible to create an emotional bond between the buyer and the property. Developers are not perceived to be among the most transparent and trustworthy sellers. Also, the ticket sizes involved in property purchase are too high, for deals to be confidently concluded online.
The ‘real’ facts
Developer’s perspective
Selling a property directly to a buyer via the internet, cuts costs of brokers and channel partners, marketing collaterals and out of home (OOH) advertising, and also the cost of maintaining a large sales force. However there are other immutable market facts:
- Brokers and channel partners conduct business by virtue of their market knowledge, ability to convince a buyer and many other ways that connect the developer and potential buyer. Importantly, they also provide buyers with the assurance of taking care of the legal aspects of the property purchase.
- A strong sales force is at all times, required to transform direct inquiries into purchase decisions.
- OOH advertising and attractive marketing collaterals, not only speak for the project, but also for the strength of the developer’s brand and market standing.
As such, none of these elements involved in successfully marketing a project, can be dispensed with. The internet is yet another tool with which to generate leads – albeit a very strong one. While the sale process can certainly be initiated online, a deal will always be closed in the real world, offline.
Broker’s perspective
The internet is not a threat but a helpful resource. While a broker will be very familiar with his area of operation and have valuable personal contacts, the internet can make these bonds even stronger. With emails, a broker can stay in constant touch with his clients, provide them with regular updates about projects and deals, and complete the paperwork involved in property purchase. The consensus among real estate brokers, is that the internet is an unmitigated blessing, and no threat at all to their business.
Times are changing, and the way the real estate business functions, will also change. However, certain ground rules that guide how real estate is sold and bought, will not change. Real estate is a people business across its entire spectrum. Just as social media cannot replace a healthy social life but certainly aid it, the internet can never become a standalone real estate business solution; but is certainly a valuable adjunct to it.
(The author is CEO – residential services, JLL India)
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