Real Estate market functions in 2 ways :
1. Primary/ Under-Construction Market
2. Resale/ Secondary Market.
We are going to focus on the Nitty-Gritty's of Resale/ Secondary Market in this article.
The Resale market is wide open for a buyer. There are many options if one has the right budget for the location in mind especially in a Real Estate Market like Mumbai.
1. Dominance of Brokers in Resale/ Secondary Market : The Resale/Secondary market in Mumbai is dominated by Brokers. Its difficult to find direct owners for a particular requirement. The simple reason behind this is most of the buildings in Mumbai have at-least 1 broker shop. This entitles the broker to develop good relationships with the seller. Also old relationships do matter. The particular broker has been in the business for long and has an established clientele.
2. Dissemination of Information : Since there is an advent of quite a good number of brokers in Resale/Secondary market, information asymmetry is the result of lack of trust between the brokers. Considering, information asymmetry the end user suffers due to half-information being provided. The half-information is provided to get the potential buyer to the site.
Since, we are living in a digital age, this type of selling seems to be an old school method. Although, it has its own pros and cons. My simple thought on this one is, how can one call the client to see the property option without understanding their requirement. Hence, in majority of the cases, the chances of losing a client is higher.
3. Lack of Trust : Using language like Middle Floor or Lower Floor or Top Floor, Hiding the name of the Building, Blaming that the market is not good, Fear of the buyer overlooking the broker and getting in touch directly with the seller are all result of the lack of trust. Lack of Trust is the result of non-relationship building issues from the Brokers end.
The main motive of Brokers is focusing on the transaction value. Such behaviour always leads to displeasure from the Buyer's end. Brokers are match makers and they are the one's who bridge the information gap between the Developer and the Buyer. This thing hardly happens. Whosoever does this is a broker in the true sense. A real estate consultant is a notch above this.
4. Traditional Ways of Selling : In resale/ secondary market Brokers generally push the product available with them. Such ways of selling are mostly disliked by the buyers. Although in few cases, it does work. The sales pitch to the buyer is please come and have a look at the product.
Without having proper information on the product, how can we expect a buyer to come and see it. The buyer will consider it as a waste of time and will drop it. The other way of selling it is there are few buyers who have already seen this option. Probably, you can look at making a decision faster. Another way of losing a client. In today's digital arena, such age old methods of selling won't work. Now a days, clients will revert saying let the other party book the apartment, we have more options in the market to check. One should never under-estimate the buyers in the market. They are always smarter, than what we think. Hence, serving them in a proper way holds importance.
5. Unorganised Nature of The Resale/ Secondary Market : The Resale/Secondary Real Estate Market in India lacks professionalism and is highly unorganised in nature. The core issue is most of the real estate agents are not qualified enough to do a thorough job of match making. They have entered the business to make a quick buck in the short term. The consistency of income is a question mark. At times going through long gestation period in sales cannot be ruled out. Such long gestation period leads to desperation. Hence, the unprofessional attitude. Even Black Swan events like Demonetisation does play a psychologically negative role in a broker's business.
The above points does show the Nitty-Gritty's of resale/secondary market. My other upcoming article on Traditional Selling Vs Consultative Selling will bring out stark contrasts and will indirectly reflect on few more Nitty-Gritty's of resale/secondary market.
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