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A majority of home buyers (as many as 82%), believe that the wide trust deficit between the builders and the buyers, can be bridged to a considerable extent, if the developers genuinely come forward for a dialogue to understand the home buyers’ point of view, according to a survey by real estate think-tank group, Track2Realty.
More than seven out of 10 (72%), maintain that the buyer must have access to communicate with the builder throughout the project’s lifecycle. Nearly as many (68%) feel this will address conflicts, even if there are changes in the layout of the project. More than half of the home buyers feel that if the developer starts collaborating with the buyers, then, the buyers will also understand his point of view, in case of any delay, policy paralysis, or other force majeure.
What home buyers want from developers in 2017
- Title assurance and the right to see all approvals in place.
- Rates based on carpet area.
- Right to a full refund, within 30 days of booking.
- Equal penalty for delay in completion.
- No change in area bought.
- No hidden charges or escalation charges.
- Separate escrow account mechanism.
- Free first transfer.
- Fair agreements with indemnities for delays, poor workmanship, etc.
- Open and transparent communication throughout the project period.
Track2Realty conducted this survey in ten cities – Delhi-NCR, Mumbai, Pune, Bengaluru, Kolkata, Chennai, Ahmedabad, Lucknow, Coimbatore and Hyderabad. A total number of 2,000 home buyers were interviewed. The respondents were a mix of seasoned home buyers, with experience in more than one property purchase and first-timers who were on a house hunt. The survey had a mix of open-ended and close-ended questions, to understand the concerns of the home buyers.
A majority of the respondents (66%) felt that issues like hidden charges, escalation clauses or penalties, could be settled, if the developer was honest and came forward for discussions. “Open and honest dialogue, can take care of a majority of the issues, as home buyers do understand the concerns and legitimate problems of the developers. Similarly, most of our concerns will not cost the developer a fortune. The real issue, is the lack of trust,” says Pramod Gupta, a home buyer in Gurgaon.
Devang Trivedi, managing director of the Progressive Group, however, feels that arm-twisting and bullying by home buyers is also a reality today, if they are involved in a project right from its beginning.
“The idea is to keep your position safe from vested interests, who pose as guardians of home buyers’ causes. The developers, who were upfront with the buyers, are now evasive because they have already burnt their fingers,” says Trivedi.
Nikhil Hawelia, managing director of the Hawelia Group, maintains that the real problem is the fact that the top management is seldom involved in the execution of the project and communicating with home buyers. This creates a vicious cycle of lack of trust. “If developers communicate properly with their home buyers, they will not only give you some end-user perspectives for project enhancement, but will also be your partner in progress, either through repeat buying or by referring friends and family,” says Hawelia.
Buyers demand transparency in finances and agreements
Nearly everyone (94%) was concerned with the fiscal mismanagement of developers and demanded a separate escrow account – something that will be inevitable, once the real estate regulator is in place, in 2017.
The second most-important issue for buyers, is fair builder-buyer agreements. 88% demanded indemnities for delays, poor workmanship, etc., while 86% wanted homes to be sold only on the basis of carpet area. This again is very much on the cards and the real estate act also provides a defect liability clause.
Home buyers also want builders to provide buy-back offers. While 54% expect a complete refund within 45 days of booking, another 46% said that builders should provide buy-backs, at market price or slightly lesser than market value, anytime during the construction lifecycle.
Additionally, a majority of home buyers (as many as 60%), also want a removal of transfer charges, at least for the first transfer. 22% complained that the transfer charges are too high, while only 18% are okay with it, if the property has appreciated to a considerable extent.
Beyond these expectations, a lot also needs to be done at the government level (proper land titling, title insurance, quick judicial remedies, standardisation of norms, etc.), to instill confidence among home buyers.
(The writer is CEO, Track2Realty)