Wednesday, January 9, 2019

Client, Builder, Home & New Year 2019 !

“What was home, really? Just a place to lay your head.
No. It was so much more than that. It was a place where a person belonged. Where a fellow would be missed. It was a part of a man. Something that couldn't be sold or taken for granted.”…  Suzanne Fisher.
Suzanne Fisher is an American writer of children's books. Born in Philadelphia Pennsylvania, she grew up in a small community around Northeastern Pennsylvania. No wonder her words about home exactly define what the difference between just building four walls is & what make those four walls a home! Come 2019 & we are facing very unique situation on home buying front (read real estate) as on one side builders thinks that the bottom has been reached (read rate per sq ft of flats) & on other side buyers thinks let’s wait for rates going further down; it’s like a dead lock or check mate for real estate actually! Many eyes (read most) are looking at 2019 with hope as real estate is one industry which may be making only the builders rich (its general & popular assumption of masses) but in the process it does helps millions of people’s life a bit livable by giving millions a home to live. Right from helping the end member of the industry, a “bigari” i.e. a labor at the site to earn his food to providing roof for the end user which may be a 1 RK (one room kitchen) flat to lavish bungalow, so many lives real estate makes a shade better which goes as thankless job! Indeed it has been more favorable to some segments but off-late it’s been more kind to the end user i.e. flat buyer & that’s better for the industry in long run. As barring last two or three years ask any person why he or she buys a home, the answer would have been ‘’rates will increase”. Unlike any other product (leave apart luxury car) right from frieze to furniture to watch to TV, which are bought for need & I mean real need to use the product, a home is mostly bought either for the fear of rates will increase or investment. So home was always on top of priority list for most of, we the Indians & still today it is but the fear factor is slowly vanishing! As this was the only product of which rates kept hiking from its launch as even the most celebrated & awaited product i.e. I Phone’s new model but within six month you get nearly 30% down & in span of one or two year even at half rate that of its launching rate! But it was only the home of which price kept of rising every year post its launching & last three years exactly witnessed opposite of this is a fact which no one will deny(may be not openly). What better thing could have been there for the home buyers that this situation in real estate! For the first time real estate client is witnessing upper hand of his in any deal & ever builder may it be 1 RK unit or Luxury duple customer, laying red carpet (literally) for him or her! News papers are full of advertises of projects launching, ongoing & more than that with loads of discounts & promises to such an extent that one will wonder is it a builder’s ad or some political party’s “electoral manifestos”!

Well, the problem is when you have many options you often end up with waiting for more options than finalizing one, is the human psychology & real estate buyers are not exception to this law! And then typical Indian mentality is we get suspicious when we are getting a better deal on its own without we demanding it, that why this guy is selling (read offering) so low, is it some trap or  then if I wait for some more time he may come with even lower offer than this! In all this process 2018 probably was gloomiest year in real estate especially speaking on scale of flat prices but the turnover in itself! Result is many real estate cos’ are bleeding (read cash starved), here cash is not black money but money to operate day to day necessities. This hampered many projects of even big names creating more panic in home buyers & on other hand govt fired one more salvo i.e. no GST for ready flats! I just wonder what govt wants to do with real estate as what is logic for no GST to ready possession flats as for both i.e. in making or completed the developer has paid GST on ever purchase as well labor contract. Now if a person is booking the flat post possession then from where the developer is going to get rebate for his paid GST to all the agencies & if not so then he (read the builder) will bound to increase the flat rates by that amount or he will sale in loss! I think both are not healthy things for real estate, may be govt has some other things on their mind but right now even Charted Accountants are also confused with the scenario about GST on home & it’s working is a fact unspoken as usual!

Don’t you think this entire scene in real estate is a boon for home buyer in a way? As a builder I am skeptical but as a buyer just, be careful, is what I will advise. As most clients I meet are actually confused what they are looking for as their home is a fact! Though the present genre is smart to gather all the information but then it’s not about gathering information but what you do with the information gathered is what makes you real smart! Here I remembered a management story; In Seattle, USA (city where Microsoft’s Head Quarter stood), on one windy, foggy & rainy night, a helicopter lost its baring with heliport. The pilot could see brightly lit Microsoft building tower standing tall above clouds & started circling that building. The building is with glass façade & the working staff can see the chopper in distress circling their building & gathered around the windows & started waving towards the pilot. The pilot with a marker pen wrote on his windshield “Where I am”. As the office staff in building read it they started discussing, searching internet & after some time they got a big print out & stuck on their window saying, “You are in a helicopter”! Seeing this, the pilot smiled, made thumps-up sign towards the people in building & headed to heliport & landed perfectly. After the pilot got out of chopper, the authorities asked him with admiration, how he could locate the helipad in such zero visibility weather? On this he smiling shared the incidence of the poster & office building, & said, “well, I knew the helipad location from Microsoft building”! Sorry, Microsoft guys if anybody reading my write-up, that was just a bad joke but to make the home buyers explain that just getting information from internet about some project or the builder or surrounding projects doesn’t help to get you your dream home but a logical approach does.

Now many will ask what’s logical approach to buy a home, it means define your exact needs in first place & for that you should be clear why you are buying a home! Most people will say well, they want to own a home of theirs so they are buying but then ask yourself, questions such as what my next five years plan is, what’s my next ten years plan & where I really want to settle. Agreed we may not often end up as we planned but that doesn’t reduce importance of planning! Because how much years you will be staying in home as well at what time you will shift in that home can make major difference in selection of home which is directly related to the money you will be spending for the same! Remember in India first buildings (read homes) get built, then roads are developed, then things like water line, drainage lines come in existence & then social infra like school, hospitals, malls etc follows! And then when you buy a flat where all such infra is developed then you end up paying maximum premium for all this development making homes in such location costliest. Instead if you are going to need a home say two or three years down the line then if you settle for a home which may not have all above infrastructure in place then you can get the home lot cheaper. And do mind infra does follow real estate is a fact may be unfortunate but that’s what been happening in & around Pune since last many decades! Today the location like High Street in Baner (western suburb) which fetch maximum rate in surrounding, just a decade back you could have got a flat here nearly 1/7th of price i.e. in ten years prices per sft has increased by seven to eight times. And story wasn’t different here, ten years back, there were no roads, no drainage, no water (well till today in some places) & no restaurant or shopping arcades, will you believe it if I tell this to the flat buyer who has come to my office just from High Street restaurant; well, definitely  a big “No’!

Now think of the guy who has bough flat in Baner ten years back & who wanted to stay here five years down the line, won’t you call him a winner? And what you will call the guy who also wanted home after five years but didn’t book then because Baner lacked infrastructure then? He has to book today at market rate with all heavy premiums for the development. Well, that too is ok provided you are starting to live from today but a little planning & study of history about growth of Pune would help to save millions of your hard earned money! And then it’s not just about saving money (well indeed it’s most important) but getting a home you really need! As one major aspect of home buying is are you just looking to get a best deal on money front or what you actually want as your home? Again many people will say, does it mean surrender to the builders & end up paying more by accepting his rate? No, it means value home just the way you value any cell phone or car. Look at all aspects of the home as well home maker & then decide whether it’s a good buy or not! Even when you are buying a ready possession home with all legalities like occupation certificate etc in place, yet be certain that the builder will be there for at least few more years to take care any problem regarding maintenance as well society conveyance type things! As well just do as the question to yourself that if a builder is negotiating below par than market then why he is doing so & if at all he is selling at loss then what would be such builders’ attitude towards the quality of construction! Well, this doesn’t mean all the builders compromise with quality but then who can negotiate below his production cost & will work without profit?

I think the 2019 is more challenging for the home buyers as it’s always difficult to choose when you are getting a home in your price range or even below & with many options around! And then there are offers like zero GST or No Stamp Duty or No EMI till possession & on top of it there are perks like Fully Furnished Home, some Club’s Membership even a Luxury Car along with flat (depending up on flat’s costing) & what not! Just remember, you are buying a home & not offer, so all I will advise is focus on the home & the home maker! Speak to the builder, his team, visit his completed projects, speak to the residents & attitude of builder (read his team) while purchasing the flat & later post possession! On this background, I wrote to my Team for New Year about the challenges it will get along in real estate, to sum up I will share it here …

"Its not New Year which comes by changing some date on calendar but our attitude to look at the new day is what going to make the real difference..."

dear team, its been probably hardest of the year for our industry but only with our team work we could face both fronts, personal as well business , because no leader can escape suffering hard times on personal fronts when time at work is hard & I am no exception to the rule! And yes its this year I turned 50, an age where people start calling you elder, so somewhere your confidence level goes down as u know u are no more young by body! But its team support from all of u has played major role & i am sure we will face all the challenges in coming year too! Frds, do mind coming times are real tough as no more the home prices will keep rising but to sale the product itself is going to be much harder than what it was earlier, not because people doesnt need homes but they have many other priorities than just home & the profit margins are going t be less; like they said in China War in 72, "ek goli ek jaan", every effort from every team member is going to play important role in getting client. And yes do mind one rupee saved is also an addition to our profits but not at the cost of quality, that's real challenge we will face! And for that we need to develop a system & an attitude to follow that system, just like helmet is necessary while u drive two wheeler on road! And one more thing don’t underestimate the client coming to you for inquiry of home you are building, he  or she probably knows more than you about your project, so be transparent, don’t make promises which you wont be able to fulfill; remember sometimes saying a bit bitter yet gentle & firm No is better than saying a sweeter Yes! And don’t try just to sale what you are building but try to help your client to find what he is looking for his home, make him aware about the way he should analyze options for homes around & then let him judge whether your project is worth booking or not & for that keep your infrastructure to the best & it means right from you site visit car to you site to the way you communicate with client! The client should have his comfort level & confidence that yes this team will give me the home which I am looking for!

I wish all of u a happy, healthy & green new year, do share my wish with ur family & friends.. sanjay.

Finally for the home buyers I will say, remember Google & FB will give you information about any home but visiting projects & meeting people will give you exact feeling of the home you are buying. As after all what’s the difference between a home & some concrete/brick structure but the people living in those walls with emotions & feelings for each other!
Sanjay Deshpande 
Sanjeevani Dev.

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