The New Mantra for the Real Estate Sector “Educate or Burst”
Authored by Dheeraj Dogra, Omaxe Group, Chief Sales Officer
Real estate sector in India is expected to reach a market size of US$ US$ 1 trillion by 2030 from US$ 120 billion in 2017 and contribute 13 per cent of the country’s GDP by 2025. Retail, hospitality and commercial real estate are also growing significantly, providing the much-needed infrastructure for India’s growing needs.
Now let’s look at real estate as a product. It is different than other consumer sectors of spending. It’s obviously not a consumable like food or clothing. But it’s not like a durable product either, like cars and washing machines. Real estate, with the exception of natural disasters or human insanity (arson, wars, etc.), tends to last forever. If one looks at it from the monetary perspective, investment in real estate is the largest and most important investment a consumer does in his lifetime. There are millions of Indians who would never have enough to invest in real estate and would pass away without owning one. Also in India real estate and gold are not just investments, they are symbols of our cultural identity.
Despite of the market size real estate sector commands in India’s GDP and its cultural and social implications for Indians in general, very little
has been done to give the sector a professional outlook. Most real estate developers in our country are home grown enterprises where the important functions are still guarded by immediate families of the promoters. And even if they hire professionals its more so to look good on paper and rarely are the professionals given any authority.
Real estate new buzz word has been a digital intervention, digital marketing has certainly played a role in educating the customers and helped in narrowing their choices but the actual sales only happen one to one with channel partners holding the key position. Let’s define an Indian Real Estate channel partner “Anyone who could set up a meet between potential buyer and a seller is a broker.” This sector is so vast that it covers nearly 10 lac independent brokers. More than $4 billion revenue generated in the form of brokerage fee. Unfortunately, RERA has failed to address the training and education needs for obtaining a RERA broker’s license. Hence out of a count of a million barely a few thousand channel partners have voluntarily made an effort to educate themselves. Very few channel partners are aware that there exists a digital platform called Escrowffrr which can be used to protect agents commission by holding it in the Escrow account.
There are an estimated 30 million NRIs living in 130 countries and India retained the top spot in attracting overseas remittances, to a total $65 billion followed by China ($61 billion). That is just 25% less than the total Indian government’s plan expenditure. In essence, the few NRIs who are less than one percent of India’s total population put almost as much money in India as the whole of the Indian central government. However only $10,2 billion of this money was invested in real estate in 2018. The balance of over $55 billion went to other asset classes because of lack of confidence in real estate. On a recent business development trip to Canada representing my current employer I had the opportunity to interact with a lot of Indian Origin Channel partners based in Canada, as buyer’s agents their foremost concern was how to protect the rights of their clients who invest in Indian real estate knowing the person on the other side of the table a broker or a developer’s sales staff has no certification to prove their professional skill set. Imagine going to a quack to get a major surgery done. Do we take a chance with our life? Why would we take a chance with our life’s biggest investment?? Now imagine even if half the NRI’s were to invest in Indian real estate, the slump the industry is going through would be over and done with. Real estate is a “high value” sale where a home buyer is both pragmatic and emotional. Sales techniques need to follow a Consultive selling approach to personalize the sales communication to understand the customer’s requirements Additionally, in an environment where sales have been low and the inventory build-up is high, professionals need to be ready with strong negotiation skills. Consultative selling, unlike direct selling, requires a lot more effort on the part of the sales professional. It requires very good communication skills, an ability to listen, to ask structured yet relevant questions in a non-intrusive manner and to be familiar with all the technical details of the project/industry. All this and more can only be achieved by believing in and spreading the word of “Educate or Burst “
Most developed nations acknowledged the importance of real estate expertise a long time ago and have well-developed real estate curricula at the bachelor, masters and doctoral levels. It is a pity, however, that real estate is not an integral part of business/ economics curricula in less developed countries like India. There have been some strides like the RICS- Amity University partnership providing graduate level education in Real Estate through its two centers in Noida and Mumbai. But it’s certainly not enough. We not only need to introduce real estate into the mainstream social sciences, we must also add this as a specialization to business and economics curricula.
The fact is that Real Estate sector is disorganized and the current mess the industry is facing has largely to do with the absence of formal education. In fact, disorganization of the sector is precisely the reason we need to integrate real estate competencies in undergraduate curricula and beyond. The biggest initiative that requires immediate attention is training and certification of front end channel partners who have the most interaction with the prospective customers. Industry bodies like RICS, NAR, Escrowffrr and NAREDCOH should join hands together and take the lead in starting short term courses which can bring a positive change in the current post RERA environment.
Customers today are highly aware of the offerings of the market and expect the best-in-class service. Relationship building and impression forming starts at the very point when a customer connects with a company staff to state requirements. The quality and effectiveness of communication with customers at various stages of the project life cycle (and even after that) creates the experience of “absolute delight.” While a customer may not be proactive about spreading a favorable word, any bad experience with a developer would bring massive public criticism and put reputation at stake. Once again it’s the training and education of the developer’s front end staff backed by a leadership that takes pride in their profession and adheres to the industry norms worldwide which together can bring a positive change.
The real estate fraternity needs to realize and come to fact with the term post RERA “Things would never be same again !!” It’s time to get the act together, accept the change, work towards a transparent environment by infusing professionalism to the forefront. Rest as they say would fall in place by itself.