Online shopping is the new trend in India. From mobile phones to expensive electronics, we are game for anything. E-commerce is no longer limited to apparels, gadgets and white goods — companies are even offering houses over the internet.
We all do our research online before buying a home but are you ready to buy homes online? Let’s first understand the pros and cons of buying houses online.
The meaning of buying homes Online
We already have plethora of online marketplaces for listing properties. Brokers and owners list their properties and home buyers can then contact them. The new trend that is catching up is, booking your house online. Traditionally you would approach the developer directly or through a real estate broker and make the booking by paying certain amount towards your apartment.
In online booking of apartments, developers list the properties on E-commerce websites. Just like any other product that is listed on E-commerce websites, apartment details about the property shall be listed in product description.
What is the Process
- Based on the offering, buyer select the type (1BHK, 2BHK etc).
- Buyer shall have an option to choose from various size of the apartment. e.g 955 sqft, 1350 sqft etc.
- Add the apartment to cart.
- Enter your personal details and make an online payment.
- Buyer receives the confirmation from online portal for payment.
- Buyer receives call from Developer to complete other formalities.
The amount mentioned under Selling price is the initial token amount as an expression of interest and booking of property shall always be subject to confirmation of Developer.
What are the Advantages
The only advantage of buying a property online is the discount that companies offers. Developers pay huge commission to real estate brokers for every booking. They see no harm in passing on these benefits to customers through E-commerce companies.
What are the Disadvantages
To be frank, there are a lot of them. This concept has just entered India and a lot need to be improvised. Let’s discuss the pros and cons in detail and decode the fine print of the transaction.
1) No details about Unit and Tower
You just paid the token amount for an apartment and you don’t even know the apartment number, floor and tower in the housing complex. You heard it right! There is no real time inventory check. Once token amount is paid, you need to visit the developer’s office and choose the apartment that sales team offers you. Developers in such case always try to offer you unpreferred apartments. Portal clearly says — It is the responsibility of Customer to check the unit availability with the Developer after booking. What makes it worse is the next point.
2) Booking amount is not refundable
Imaging you did not like the unit offered by the developer and you want to move away from the deal. The details provided on the website says, “The booking amount is non-refundable“. You already know how difficult it is to get you money back from developers. On top of this, there is a third party (e-commerce company) involved.
3) Third party interest and liabilities
The online portal says, we shall not have any liability whatsoever for any aspect of the arrangements between the Developer and the Customer as regards to the quality standards of construction, delay in construction or any other aspect relating to the Property. In no circumstances shall we shall be liable for the services provided or properties offered by the Developer.
In already messed up Indian real estate industry, it would be wise NOT to involve any third party between developer and buyer. Developers are known for putting the onus on brokers for all discomfort to the buyer and they shall not hesitate to do in such cases too.
4) No details about home loan and project approvals
Most of the home buyers go for home loans these days and there are no details about home loan approvals. Contrary to belief that online systems increase transparency, no details about project approvals are mentioned on the website.
The Logical Buyer’s point of view
On the surface, this approach to selling and buying real estate seems novel and even logical. What works against it is the manner in which the real estate market actually functions in India. Homebuyers should do proper due-diligence and understand the micro points before getting into the deal.
Despite all odds, if the offer is too lucrative, we should not forget the basics of home buying and only get into such deals when discounts offered are significant. Buyers should understand the pros and cons of such offers. Research about the property on ground and find out all the details before paying the token amount. Don’t forget to compare the prices available in market.