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Why Current Real Estate Portals Are Not Doing Well ?

By Author: realty compass
Total Articles: 2

There are several real estate portals in India that are trying to change the way consumers discover and buy real estate market. However no one has achieved growth in client acquisition, revenues and profits. Fundamentally none of the portals have solved systemic issues which deny information to the consumer and leave them in the dark while buying a house. Portals are spending heavily on marketing in TV, social media and the net. But the customer knows that if he wants to buy a property he searches for the name of the builder directly. It is difficult for real estate portals to survive if they do not add value. Here is how the real story unfolds:

The truth (notice how a consumer makes a search on Google about one suburb called Hebbal in Bangalore):

It is clearly evident that the home buyers are choosing homes based on brand identity of the builder rather than using broader search metrics to find the right home.

From the above table we can estimate that monthly traffic is 5,000,000 (for top 40 builders, 500 projects) in Bangalore alone. The total expected traffic for new projects will be, across top 8 cities in India, will go over 100 million. In comparison with this traffic, the leading real estate portals fall flat.

Existing portals, which have raised large sums of money, are not the destination of choice to find new homes. People are influenced by advertisements of builders alone. Home buyers find unique problems like understanding the quality of builder, fair price of the project, growth in price of a location and land ownership details. realtycompass.com and other portals are now trying to build unique features like builder ratings and floor efficiency (super built up to carpet area ratio and feedback is now being taken on experience with builders) which creates transparency, for people, in real estate market.

What Do The Home Buyers Want?
Though the real estate portals are having huge inventory and offer a 360 degree view that is the 3D floor plan; it still does not provide some basic information. Portals still need to build the following.
1. Reputation of builder – Whether the company delivered the project in time in past, quality of construction, promoters’ track record, litigation against the builder and educational qualifications.
2. Project approvals- Clear land title, compliance to approvals, building construction without deviations, bank approvals, extent of encroachment on the project.
3. Fair price – recent transaction price for the project, comparative analysis of rates of similar rated projects, total inclusive price of projects (basic rate plus other charges), white versus black money component, calculated price based on credentials of project (amenities, specifications, possession, materials to be used etc)
4. Location details – zoning of location, accessibility to basic infrastructure & civic amenities, water scarcity, safety
Due to lack of above information home buyers are not able to make decision on buying home online and relying on brokers, friends, brand name to conclude their home purchase process.

The Way Forward:
There are approximately 8,00,000 houses are getting sold in top 8 cities in India over the next few years. The total sales and marketing spend (including brokerage) of builders on these houses are expected be around Rs 20,000 crores. This gives a great opportunity to solve big pain points that the home buyers are facing today.

The real estate regulation bill, once enacted, it will solve lot of problems such as stopping the builder from transferring money from one project to another to acquire land and punish willful delays in completion of project. Portals can solve many of the problems through technology. Intelligent apps can report real time inventory based on crowd sourcing, insurance for delay in possession of projects (high premium for disrepute builders would create market pressure on them) are some of the new features that can solve night mares to millions of people in India. The question is are we doing it right.

The author, Sankara Srinivasa Aiyyathurai, is Chief Operating Officer of Realtycompass.com

Total Views: 127Word Count: 668See All articles From Author

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