Shyamal Banerjee/Mint
Shyamal Banerjee/Mint

Why buying property online may not work

You now have the option to book a property online. However, it comes with its share of bottlenecks

While scrolling through some of the e-commerce websites, don’t be surprised to see the option to buy real estate on as well these days.

At the moment, real estate portals are used to check for location, projects and tentative prices. Subsequently, the process of contacting the seller or agent is done offline. But now, to cash in on the Internet savvy homebuyers some developers have taken it to the next level—by offering property bookings online. Some are selling properties from their own website, while others have tied up with e-commerce and realty portals.

However, for the time being, through the online route you can only express interest in a property by booking a site visit based on information available on the website. Once you book a flat online, rest of the process is offline which involves site visits, inspection of original documents and signing the builder-buyer agreement. However, if after going through the offline process, you are not satisfied and want to exit, your booking amount typically gets forfeited. So before putting in money, make sure you do the necessary groundwork.

Projects available online

Real estate developers are slowly realizing the potential of the online space. Just last year, during the Google Online Shopping Festival, Tata Value Homes (TVH), a subsidiary of Tata Housing Development Co. Ltd, sold 55 apartments online, and even now continues to sell through its own website. Last month, TVH joined hands with Snapdeal.com. Through the e-commerce website, homebuyers can book an apartment by paying 30,000. TVH is offering 7 housing projects online with at least 1,000 units on sale in cities such as Mumbai, Pune, Ahmedabad, Bangalore and Chennai. The units range from 1-bedroom, hall and kitchen (BHK) to 3-BHK, and are available at prices ranging between 31 lakh and 70 lakh. Once a buyer zeroes in on a property, she can pay the booking amount online and the house is allotted. The buyer can then do the rest of the formalities offline. The caveat here is that the booking amount that you have paid online is non-refundable.

You can also book through realty portals such as Realtycompass.com. On Realtycompass.com, you can e-book a 3-BHK villa (1,438 sq. ft) priced at 45 lakh by Casa Grande Pvt. Ltd. You can also book 1- and 2-BHK apartments by Yashva Classic Homes Pvt. Ltd. These are available in the developer’s Classic Crest project and are priced between 13.8 lakh and 21 lakh. Both projects are in Chennai. To book a property with the portal, you have to pay 20,000 as booking amount. This is refundable, if you cancel within 10 days of booking, but a fee of 700 will be deducted nevertheless.

Exclusive online offers

In order to incentivize prospective homebuyers to buy property online, exclusive offers are given. For instance, TVH was offering a guaranteed rent of 10,000 per month for a year post-possession to customers who booked during the launch period.

Similarly, Casa Grande is offering a semi-modular kitchen with every booking and Yashva Classic Home is offering a plot of the size of apartment you book for free in a different location. Offer from these two developers are valid till 22 September and 12 October, respectively, or till the stocks last.

However, considering the poor track record of real estate developers in terms of what they promise and what they deliver, one must take utmost care before booking an apartment. One should consider only established developers, e-commerce websites or portals.

Future prospects

Although, online property buying is still at a very nascent stage compared with buying movie tickets, books, clothes or electronic items, developers and portals believe that the trend will catch up. Amit Maheshwari, vice-president, fashion at Snapdeal.com (the home category is part of his portfolio) said: “We were able to sell close to 85 units of Tata Value Homes worth 40 crore in the first week. This has re-affirmed our belief that the customer has adapted to online home purchase as easily as other categories. We are sure that the upward slope is likely to continue in the future."

The overwhelming response for real estate has created a significant interest in the market with most of the prime developers approaching Snapdeal.com to list their properties. “We intend to bring the best projects from the most reliable developers," added Maheshwari.

“This is an encouraging trend and is likely to become popular, specially among non-resident Indians and people living away from the place of purchase," added Aditya Verma, chief executive officer, Makaan.com.

However, not everyone believes in its prospects. “The trend of purchasing properties online is not one that is going to take off in India, now or in the foreseeable future,"said Anuj Puri, chairman and country head, Jones Lang LaSalle India.

Should you buy?

Typically we tend to buy something online because of its ease, speed and facility to compare and choose from a wide range of products. However, these advantages are more for the purchase of retail products and services, or something you are more familiar with.

As far as real estate is concerned, it is a heterogeneous product and each property differs from the other. Moreover, lots of ambiguities prevail, such as legal authentication, price, location, quality, delivery time and so on.

“Only when all pertinent documentation and various other factors that go into a successful property investment are available for a project online, will it begin to make sense to consider such a route," said Puri.

The availability of information required for a fool-proof property purchase would obviously depend on whether the developer or partnering bank have made them available or not, he added.

However, developers and selling partners assure of providing relevant information. “We provide all the important information a property buyer would usually look for such as terms and conditions, and floor plans," said Maheshwari.

He adds that they have put in place industry-level processes and checks. Customers can book their desired homes from Snapdeal.com’s website, after which the developer’s sales team will contact them for the next steps and help them choose the exact unit type, and deal with financing issues and payment plans.

As mentioned earlier, as of now you can only book a property online. As a general thumb rule, property should not be purchased without the necessary personal inspections, extensive due diligence of all related documents and informed inputs from a professional adviser.

So as of now, the tried and tested, traditional method seems like the better option.

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