First two decades of the 21st century have witnessed a boom in the real estate demands and then it met with the bust without fetching in the sustainable results for the industry sector. Many theories came up behind this fiasco; somehow, they all were missing the most important point. This point is connected with buyer and seller relationship. It is not a monopoly market; here the supply is still exceeding demands, in spite of high prices of the property. The industry is failing miserably in striking a balance. Under the light of this fact, we cannot ignore the fact that the relationship between a builder and a future flat owner is very important. If a builder is betraying him then he is losing a customer.
Insolvency Case Is Setting Up a Wrong Example
A recent controversy that got the limelight was about a well-known home grown construction company. It currently has a debt of over 8000 Crores. For a while let us keep aside this debt and think about the interests of a small investor that invested in a flat. If a real estate multimillion company fails in clearing the debt then how this investor will be compensated, will he get a piece of land or will he get his money back after the auction of the property? What sum of money he will get back, is it going to become a loss-making proposition for them because they are paying the interest on the loans? These are big questions, here we have a set of law abiding customers, paying their dues on time and on the other hand we have a huge company running away from the promises and leaving them in a lurch.
How This Fiasco Will Influence the Sentiment of the Market
The business model of the construction company met with its crescendo and faltered completely. They are not alone, a big percentage of builders are doing the same thing. Instead of completing their existing projects, they are investing in new projects and raising loans from the market. In principle, if a flat owner takes a loan and deposits the money to the builder then it is the duty of the builder to complete the project in the stipulated time. However, builders are using this money as a sum collected from a mutual fund scheme. They are investing this money back into the market and trying to expand their empire. The company is question also did the same thing, in fact, they played the game a little prudently when they diversified and invested in projects like Hydropower and infrastructure but it failed and the things got derailed.
Now, What Is Missing in the Deal?
The relationship between a builder and a future flat owner walks on two legs; they are mutual trust and transparency in the dealing. This fiasco will send a negative message to the market. It is a betrayal of the trust of the investor. The worst part is the fact that nothing has happened overnight, it took its own sweet pace of time. Customers or future flat owners did raise queries about the progress of their projects, however, they were kept in the dark until a point when the company doomed to its final fate.
It Is Time to Go for a Trust Building Exercise
The days of license Raj are over, but most of our builders are still living in the same era. They are still doing the business with the model of keeping trade secrets. Market experts believe that in the coming future many more cases can surface. It will happen when their bad investments will roll down in the drainage and trade secret will be out.
In order to curb this dark situation of the market, certain sensible and honest players like EssDee Group are coming up with a trust building exercise. EssDee Group is in existence from almost last three decades and has a long list of completed projects in their kitty. Currently, they are undertaking around 20 projects and the progress report of all the projects is satisfactory. They bagged the limelight recently as the pioneer of the culture of “Build up” portals.
It Is a “Build Up” Portal to Bridge the Information Gap
EssDee Group has introduced a CRM module called ‘Build Up’ where they are sharing each activity associated with the project on a web page. As a future flat owner, you can check this data. In the past builders were following a dilly-dallying approach. Most of the customers were in dark about the progress of their project. They were investing their hard earned money in the project but were unable to figure out the construction material quality of the buildings. Now the CRM module developed by EssDee group has all the answers ready. All you need is to log on to the page and check the progress of the project. Each and every specification of the material to be used is given to the landowner at the contract stage and the same can be monitored on the online EssDee Build up portal. To ensure that no discrepancy occurs - each and every bill is uploaded on the portal so the consumer is assured of the quality of the material is delivered as promised. When we see it from the point of view of the customers then we find that it is a welcome move that is adding a transparency, more importantly, it is promoting the culture of transparency in an industry sector, which is earning a bad name because of the foul practices of some bad fish.
This culture of CRM induced transparency can support the trust building exercise between a builder and a future flat owner. We cannot deny the fact that both of them are investors in their own rights and their relationship should be more of a partnership between two concerned people. The trade pundits of real estate are abuzz that in the future more and more builders will jump into this zone of transparency and a healthy competition will start brewing up. In this condition as a customer, a future flat owner will be able to check the performance of the builder and then make a decision about a purchase.