Informed buyers feel bridging trust deficit is not unrealistic

[] Home buyers’ awareness of key industry practices and regulations is quite high, at 80%, finds a survey by Track2Realty, with many consumers maintaining that bridging the trust deficit between buyers and builders is possible, if developers make the effort

Home buyers today, are very clear about their expectations from developers and can even make informed suggestions, on bridging the trust deficit between the builders and the buyers, according to a pan-India survey by Track2Realty. 72% of the buyers, said that a defect liability clause, would make them trust the builder, while 28% suggested that developers should charge a one-time cost, included in the apartment’s price, for lifetime service.

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Consumers were asked to rate the developers and the prevailing market practices, on 25 action points that were grouped into five attributes:

  • Execution capabilities
  • Fiscal management
  • Knowledge/expertise
  • Ethics/conduct
  • Service excellence

The survey was aimed at understanding the prevailing practices in the housing market and its link with the home buying decision. It found that consumers’ awareness of key industry practices and regulations was quite high, at 80% (or 20 out of 25 areas). 68% of the respondents said that they were not happy with the disclosure norms and builder-buyer agreements. Only 12% said that they were allowed to see the builder-buyer agreements beforehand, while the remaining 20% neither asked for it, nor did their developers offer to show it to them.

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Home buyers’ needs ignored

  • In terms of project construction status, 82% felt that the developers were very unprofessional and 18% complained that the developer did not even allow them to visit the construction site.
  • A majority of the buyers also maintained that the developers were least bothered about their wish-lists. Only 11% felt that their feedback was taken seriously, while 7% were asked by the builder to give referrals for some incentives. The remaining 82% said that there were no interaction or partnership initiatives, on the part of the developer.

No transparency, owing to marketing gimmicks and hidden charges

  • Buyers lamented the lack of realistic promises. No less than 60% felt that they were taken for a ride with marketing gimmicks, while 22% said that inflated promises were a reality in any industry and the rest 18% said that they could negotiate it on their terms.
  • Buyers also maintained that upfront demand, was better than levying hidden changes, with 48% of the respondents saying that they were forced to pay escalation charges. 42% felt that the penalty clause was unjustified and 10% had to face other hidden charges.

Is a bigger developer actually better?

  • Nearly half of the respondents (48%), maintained that bigger developers pose bigger problems for the buyers. Only 30% felt that bigger developers have better professional practices, while 22% were unsure about it.
  • A vast majority (52%) said that there should be no broker or under-writer and the builder should deal with them directly. 34% wished to have regular builder-buyer meetings and the other 14% complained about the lack of professional staff.

Resolution of disputes between home buyers and builders

Buyers felt that developers have a poor record, vis-à-vis arbitration. Nearly half of the respondents (46%), were in favour of a well-defined cancellation policy and exit option for the buyers, while 30% demand uniformity in refund process and interest. The remaining 24% demanded a buy-back process with balanced terms and conditions.

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Poor facility management

Post-delivery facility management, was another critical concern for buyers. While 42% complained about the service quality, 38% said there were issues with the cost of service and felt that the developers were cheating the buyers through facility management. Only 20% said that issues crop up due to missing consumer connect.

The survey was conducted in 20 cities – Delhi, Noida, Gurgaon, Mumbai, Kolkata, Bengaluru, Hyderabad, Kochi, Ahmedabad, Chennai, Jaipur, Lucknow, Surat, Bhopal, Indore, Patna, Bhuvneshwar, Vijaywada, Pune and Chandigarh, between October 25 and November 10, 2016, with the respondents belonging to a mix of the luxury, mid and affordable segment of buyers.

(The writer is CEO, Track2Realty)

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Category: Lifestyle

Debora Berti

Università degli Studi di Firenze, IT

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