Thursday, September 8, 2016

Where are Happy Customers in Real Estate?






“Your most unhappy customers are your greatest source of learning”... Bill Gates

No need to introduce boss of Microsoft & a  man in top three of world richest persons for last so many years that possibly he also would have left counting the numbers of those years! There are few names in this world which doesn’t need any introduction, though I really wonder how many people really know these names? For e.g. when I say knowing a person, yes most people know Mr. Bill Gate is  the richest person, a college dropout yet how he build Microsoft &  is creator of Windows named system etc. But how many people actually knows the person Bill or his philosophy & why he has reached where he is now? I bait most people won’t know anything about this aspect of Mr. Gates! It’s not easy to become world’s richest person in first place & it’s more difficult to retain that position year after year, especially when you have a business which serves millions of people across the globe; because unless you learn how to keep those millions of customers happy you won’t remain rich! That’s why his quote tells us what Bill Gates is, what he thinks of his product & his philosophy in making his clients happy! 

Unfortunately in our country, with most numbers of unhappy customers, the real estate industry hasn’t learnt a bit from them. This statement of mine not liked by many my fellow friends but that’s what past & present of the industry shows is a fact. As per a latest survey nearly over fifty thousand disputes or call it law suits, are pending in consumer courts, filed by various clients of real estate, across the major cities of the country. And this is highest number in respect of complaints by any product’s consumers, which means real estate has maximum numbers of unsatisfied customers. And then experts vouch this is just tip of iceberg as most clients don’t come forward to launch a complaint against the builder due to lengthy procedure involved & no guaranty of justice! Certainly something is wrong with real estate industry or the system governing this industry as why so many unhappy clients or disputes are here? In a way looking at the volume I won’t say the figure is big because every year in only Pune city nearly one lac & above new homes are built. But to analyze this issue we have to first understand nature of real estate & then we can analyze what real estate needs to do on understanding what its clients wants? At the same time no exact or official govt data of any information or statistics is available in real estate, all what we get is usually taken from surveys by some private company.

Not long back i.e. in early 80’s when real estate was restricted to only cities like Delhi or Mumbai, there were less players as well lesser expectations also by the customers. Land wasn’t a scarce commodity like today & mostly the builders were known entity. Yet real estate was never a professional industry like Auto or Pharmacy, as it has been relying always on human interface, with very less or nil R & D or mechanized working system in place. Here most deals depend on what has been committed by the builder in person or printed in his so called brouture. Again the laws governing real estate were complex so were the sanctioning authorities as well procedures involved like agreement & registration which isn’t required while buying any other product. Transparency was the word unheard of as everything used to be in one to one basis; right from rates of selling to carpet area all was clear & most importantly the builder named person was always available to his clients! Unlike today where not only the sale rate varies project to project but it can vary even client to client of the same project; back then rates were steady & there wasn’t rat race to launch the projects in frenzy.Come 90’s & there was money in hands of middle class, suddenly land become new gold & everyone wanted to be associated with real estate. No more it remained an industry to take care of basic need of homes for the needy ones but it become a gold mine. I think the biggest curse real estate got is, the people in real estate forgot its basic reason for the existence i.e. real estate is supposed to serve the society’s need of homes but it become just a money earning business for most! 

Like Henry Ford has said once, “any business which makes only money is a bad business”, real estate soon became a bad business by 20thcentury! And then every passing year saw the new low, not on money basis but on the scale of reputation & unhappy clientele of real estate!  Reason was simple as most people joined real estate just for the sake of appreciation or returns it was generating & at the same time as land prices around cities started souring the fight to acquire the land got bitter. The outcome of fight to acquire the land was basic requirements essential for any business i.e. quality, morals, values; customer focused approach etc started disappearing from real estate industry. The new criterion for becoming a successful builder were changing fast; money & muscle power are the most needed things now to become a builder. Anyone neither was caring about any tradition of fair practices in real estate & terms like those nor was it required to think about the client’s needs. Anybody who has enough money to buy the land & has muscle power to wipe out every obstacle coming in the way of developing the land was most eligible builder.  Unfortunately clients also got used to this new genre of builders, many without having any choice & many out of greed just to save some money though still there were/are some fools in real estate, doing business with old fashion of transparency & thinking customer as god! Obviously they don’t have capacity to match the new age builders as the can’t advertise full page in all news papers to tell the world about their way of doing business or about their project’s plus points. So most buyers were running behind the new developers & their dream home offers & here is where first unhappiness wave started hitting the shores of real estate.

Nothing wrong in full page advertises or various offers to sale your product but in the zest of launching projects & trying to cover the huge investments made for land buying as well to get all sanctions, many things were overlooked. The terms like carpet & built-up were replaced by salable named factor & now day’s its just two bhk at some X amount is the scene. This wiped out the clarity in the deal as most customers never understand what & how they are paying for their homes. Prelaunch is another term which roped in, it means just conceptual plan of the project is ready & all other sanctions are awaited yet you can book a flat as you get choice as well you save on rate which is claimed to be much higher after getting all sanctions! Another such addition in real estate dictionary was infrastructure charges; I really don’t know what it means but can assume, it means the amount you will be paying for all the amenities like golf club to spa & gym which will be part of the project.  Clients were also happy thinking they are making great deals & responded by booking in these projects like its last chance of getting their dream home! But slowly the dreams started turning out as nightmares as many projects just remained in prelaunch state only or the possession dates got delayed beyond patience of the clients. Layouts of the projects shown at prelaunch started changing, where garden has been shown came another concrete tower or in some cases the infrastructure charges got doubled or else the entry in many of the facilities in brouture get restricted for few members only, carpet area of the home in actual seems to be like in the Disney movie “Honey I shrunk the kids”, quality of construction is so poor that in first rains the costly interiors got damaged due to seepage of rainwater & the list for unhappiness went on increasing! On the top of it the builder was never available for clarification of any of the complaints, all you could meet was some new employee every time & his promises of cut paste types “we will look in”!

I think in a way real estate is most controlled industry when it comes to obtaining sanctions & on other hand it’s most uncontrolled industry when governing sale rates. But even the rates of raw material i.e. land are uncontrolled & so are the rates of basic ingredients like steel & cement! Baffled by unhappy customers pressure the Govt started trying to come down heavily to protect the consumers with laws like MOFA & then later on RERA. On the background of all such unhappiness or wrong policies, the outcome with real estate was obvious, recession! People started delaying their decision of buying a home mainly for two reasons, one they are not sure about the product they will get delivered & another is its valuation! It’s the first part which I think is more important as rate is something every individual has to decide as what rate one person should sale or other to buy! So if we really want to have “Ache Din” back in real estate then first thing for the builders is stay committed to what you have said to your customers. And trust me my own experience is most of the clients wants one simple assurance & that is delivery of their home in time! I think if as a builder you can do that then ninety percent of unhappiness has been taken care! 

Another important aspect is be transparent in whatever you are selling; means right from carpet to salable, it’s not about the ratio but put specifically area details from carpet to built-up. Today’s buyers are smart & they know value for their money so mention very clearly what you are charging for & how; be logical & specific than just beating around the bushes! Most importantly be available to your clients for anything they want to know. It’s not necessary that you should be meeting them in person though if you can then that’s best way but you can build a team in such a way that they will represent you properly instead just passing the buck. If all the documentation is in place & so is a system which delivers what has been promised, then the customer will like to meet you just to say thanks & that’s what true “Achhe Din” for real estate will be! Agreed there will be always some nasty soul who will be always unhappy in spite of your sincere efforts but then it’s part of the business! Though Mr. Gates might have said using unhappy customers for learning yet all the time we can keep just learning is we should remind ourselves!  

At the same time the customers should also need to understand one thing that most of the unhappiness they get in real estate is either outcome of their own ignorance or greed of saving few rupees! As a client instead blaming every time to the builder for you being cheated, it will be better to do a bit cautious survey before you shake hands with your builder. Remember there are both types of builders in market, good as well bad & your happiness solely depends on whom you make a deal with! 

-- 
Sanjay Deshpande 

Sanjeevani Dev.

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2 comments:

  1. I feel happy you had the courage to write this. It was needed. Yes, if things are delivered in 2 to 3 months of promised time and unnecessary amenities are not promised most unhappiness will be gone. Why have swimming pool when in summer the authorities will not give it water? We need to rethink,we buy home for living or clubbing. Customer also needs to think.

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