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House hunting in cyberia




Posted online: Friday, February 02, 2007 at 1137 hours IST
Updated: Friday, February 09, 2007 at 1210 hours IST

For Aditya Kapur, vice president at a software firm in Gurgaon, buying a house was proving difficult. Not that he lacked funds; what he lacked was time. Too busy during the week, he went house hunting with brokers on Sundays. Despite several excursions, Kapur couldn’t find a house that was to his liking. He was disheartened, and ready to, at least temporarily, shelve his purchase plans. Then, at a colleague’s suggestion, he visited a property portal. In the ‘Advance Search’ feature, he entered all the criteria which he wanted in his house. Within a few seconds the search engine ferreted out a list of houses matching Kapur’s criteria.

 

After speaking to the owners Kapur was able to pare the list down to seven houses. Armed with this high-probability list, he resumed his visits. Within a fortnight, Kapur had finalised a deal for a swanky four-bedroom apartment on Golf Course Road, Gurgaon.

 

Like Kapur, a growing number of time-strapped buyers and tenants are turning to property portals to help them find the right apartment, bungalow, or plot. Hunting for a house with a broker can be a tiring, time-consuming affair, and the probability of finding the right house is low. By contrast, on a property portal, you click your mouse a few times and information on a thousand properties appears. Refine your search criteria, and you will be able to narrow down the list of prospects to a manageable 10-15. More and more smart buyers are nowadays conducting the preliminary search online, and only then venturing out to inspect houses.

 

Smart search

 

Before you begin the search on a property portal, jot down your requirements. Take the budget, for instance. If you possess Rs 40 lakh, do not search for a house for that amount. Remember that stamp duty, brokerage, and other expenses will cost a packet. Deduct the expected expenses on those counts, and search for the amount left over.

 

To use the search engine to optimum effect, you need to know a few tricks. Says Rajan Sastri, Head-Research and Advisory at Pune-based Indiaproperties.com: “Do not specify those criteria that you are willing to compromise on. Once a criterion is entered, the search engine treats it as mandatory and eliminates all the listings that do not fulfil that criterion. For example, if you can do without marble flooring, do not specify marble flooring. Do not specify your dreams, only your needs.”

 

Separating grain from chaff

 

What if you are a house owner wanting to sell or rent a house? Which property portal should you list with? Firstly, these are early days and the number of property portals is limited. Among the well known portals, most are strong in certain geographic pockets. 99acres, magicbricks, and indiaproperties, for instance, are well known in the Delhi-NCR region, indiaproperty is well known in the Pune-Mumbai region, and so on. Make a few enquiries and you will get to know the names of established portals. Says Murugavel Janakiraman, CEO of Chennai-based Indiaproperty.com: “Since many portals allow individual sellers to list their properties free of cost, list with as many portals as you like.”

 

But what if portals charge you for listing, as many do? In which case listing on all would be expensive. Sastri of Indiaproperties.com suggests three criteria for choosing the right site. First, he says, go with pedigree. List on sites that have been around for a while and know the business. Two, look for portals having a ‘relevant database’.

 

“Do not get taken in by claims of a huge database. To find out if a site has a relevant database, search it for a particular kind of property, then examine the results. If you get relevant results, the site’s database is strong.” According to Sastri, portals that charge for listings or charge for a privileged position tend to have genuine listings, and hence a high-quality database.

 

A third criterion, he suggests, is to check whether the portal has a research department. “Quality research offered by a portal online and offline is a powerful incentive for genuine buyers-sellers, tenants-landlords to visit it,” he says.

 

Broker dominated

 

If you have searched for a house online, you would have noticed that the majority of listings are from brokers. In theory, property portals are meant to be a platform for buyers and sellers. In reality, they have been taken over by brokers. Properties listed by owners are few. So even if you are using a portal to hunt for a house, your chances of bypassing the broker, and thus saving on his commissions, are small because of the shortage of owner-listed options.

 

Portals owners deny that their web sites are dominated by brokers. Says Deepali Singh, Business Head, 99acres: “50 per cent of our ads are by individual owners, 30 per cent by brokers, and 20 per cent by builders.”

 

Smita Thorat, CEO of Mumbai-based property portal Realacres.com concedes that most of the ads are placed by brokers, but says that this is the reality of the Indian market. “The model (of only listing properties from individual sellers, and not from brokers) doesn’t work in India. In India, most of the vacancy ads on a job portal are from job consultants, and most of the ads on a property portal are from brokers.” Buyers, she says, have a choice. Most web sites mention clearly who has listed the property. “If you don’t want to buy from a broker, avoid those listings,” she says.

 

Sastri of Indiaproperties.com says that even in the US, which has a well-regulated real estate industry, most listings are put up by brokers. Real estate, he says, is not a standardised product with a fixed cost + profit pricing. It is a product that lends itself to price negotiations. Hence, it is not necessary that a direct sale will necessarily be cheaper than a broker-induced sale. Besides, he says, property transactions are complex affairs requiring a lot of handholding. For the commission they charge, brokers steer buyers and sellers through the legal labyrinth, documentation, and mortgages.

 

Non-transparent pricing

 

Another irritant for users of property portals is that often the price is not mentioned. Instead there is a note saying, ‘Prices available on request’. This is especially true of properties listed by brokers. This doesn’t allow for price and feature comparisons.

 

Jaskirat Singh Bansal of Akal Constructions, a west Delhi-based real estate consultancy, explains: “In a dynamic market the rate keeps going up. Suppose you list in January, and forget to refresh. A buyer will then call up in March and demand the same rates,”

 

And how correct are the prices given on portals? “They are mostly accurate. At the most there will be a 10-15 per cent variation. NRIs, whom unscrupulous brokers tend to exploit, should use the prices on web sites to get an idea of rates.” He concedes that sometimes brokers mention low prices in order to lure customers. Later, once the buyer likes a property, they hike the price.

 

Another discrepancy on web sites is that for a given budget, one listing will say that you can buy a house of 1,000 sq ft, and another that you can buy a house of 1,500 sq ft. Such variations arise because one mentions the carpet area while another mentions the super built area. Get an expert to measure the area of the house before you buy it.

 

There’s no denying that property portals have begun to change the way buyers and tenants hunt for houses. But these are early days yet and it will be a while before buyers entirely abandon traditional ways for the Web.

 

Advantages

 

Info cornucopia. Info about thousands of properties available. Not limited to options available with one broker.
Comfort. Access information from home.
Time saving. Do preliminary search online. Shortlist properties that meet your specifications. Only then visit them. Searching through brokers is time taking.
Interactive. Sellers can upload videos, hold live chats with buyers, and exchange e-mails.
More information. Ads on portals are more detailed compared to the few centimetres available in a newspaper.
Global reach. Print ads are city/region-specific. Ads put up on a property portal can be seen worldwide. Good medium for targeting NRIs.
Cost effective. A full page ad in a daily costs about Rs 16-17 lakh. For that amount can get an annual package on a portal.
Free. Many portals allow free listing to individuals.
Greater duration. Ad stays listed for months against a day in a newspaper.
Search engine. Allows you to enter detailed search criteria. Shows results within seconds. Hunting for right property in a newspaper can take hours.
Bypass broker. If you find a seller/landlord, can buy/rent directly, and save on commission paid to broker.

 

Disadvantages

 

Penetration. Traditional media like print and TV have greater penetration than the Internet.
Fragmentation. As number of portals grows, users will have to visit many sites to access all the good options.
Prices missing. Especially true of properties listed by brokers. Hence, can’t compare features and prices.
Brokers predominate. Large proportion of listings is from brokers, and not individual sellers.
Low conversion ratio. According to brokers, Internet attracts browsers. Conversion of browsers to buyers is low. Those who respond to newspaper ads are serious buyers.

 

 

‘Interactive medium’

 

Deepali Singh, Business Head, 99acres.com

 

 

On advantage of portals
They are interactive. Sellers can upload videos for virtual walkthroughs, buyers and sellers can have live chats, queries can be posted online, and the advertisement can be more detailed.

 

On the portal's growth
The number of properties listed on our web site has increased from 900 to 45,000-50,000 today; the number of visitors, from 10,000 to 75,000.

 

On their USP
We make a conscious effort to have fresh properties online. No property is listed for more than two months.

 

 

‘Inexpensive branding tool’

 

 

Rajan Ahuja, Director, Realty Verticals, Gurgaon

 

 

Advantages of portals
You can offer more details about your product. The ad stays posted for a longer time, against only a day in a newspaper.

 

On advantages of print
Print is an established medium and has better reach. The Internet attracts a lot of browsers. Conversion ratio tends to be low. Serious buyers respond to newspaper ads.

 

On Branding
Builders and brokers should use the Internet as an inexpensive branding cum information-sharing tool, and not just for lead generation.

 

 

‘Thousands of options’

 

Murugavel Janakiraman, CEO, Indiaproperty.com

 

 

On advantages of property portals
You can get information about thousands of properties. The search facility helps you shortlist the right options within seconds.

 

On prerequisites for success
Experience and understanding of the business, deep pockets, and right alliances will determine who is successful.

 

On USP of their portal
We offer free listings to end-users. We are the property channel of Yahoo India. 30 per cent of the traffic coming to our site is from abroad.

 

 

By vayaM CS