Keep Calm And Keep Selling Real Estate

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Do these Keep Calm memes really have a calming effect? Or are they meant to be just smiled at and swiped away?

Can you really keep calm and keep selling real estate in these times?

There are good times, there are bad times and there are ordinary times. If you’re a real estate salesperson or specifically speaking, a real estate broker like me, you’ll guess which of these times are we experiencing right now. These are definitely not good times to be selling real estate, and whether these are bad times or ordinary times is something which will be determined by your attitude. And believe me, it’s your attitude which will help you get through these times, whatever they are.

But first, a little bit about the good times. What exactly were those? When the good times came, we thought they were better times than before. It’s only now, in hindsight that we’ve classified them as good times. What brought them about?

Real estate has periods of volatility. It has surges of  demand driven by the collective belief of investors, veterans or newbies, that the price of every bit of property bought now is bound to rise in the future. When fuelled by a flurry of new developer projects this demand remains unsatiated, bringing in hordes of investors. My first sales in real estate coincided with the beginning of this boom, sometime in 2009. And most of those sales were from walk-ins at sites. Eager and confident investors, in a hurry to ride the boom. From site walk-ins to office meetings to references, the sales kept pouring in. It was also a very competitive time but in spite of that, almost everyone made sales, and more importantly, money.

But there was always that uncertainty about how long the good times will last. We all knew that this is a cyclic sector and things can and will reverse suddenly. In 2014, that’s what finally happened. But no one wanted to believe it. It was like sitting in a cinema theatre, when the lights come on and the usher comes up to you and says “Hey, the show is over, get going”. We look at each other and say “Wasn’t this the interval?”

Now, whether the show is over or it is the interval again depends on your interpretation and most importantly, your attitude. If you walked out of the theatre, you walked out of real estate. If you stayed, you’ve been experiencing the longest interval ever in real estate.

So, how do you get the show running again? How do you keep calm and keep selling real estate?

First of all you should stop thinking about the good times, the sales you made and the money you generated. But don’t forget those times completely. For there’s something else also that we generated. Goodwill.

If after closing your sale you managed to follow-up with good after sales services, you probably made an acquaintance for life. Those acquaintances, those loyal clients of yours have stayed connected with you. Whether they’re stuck with unable-to-exit investments or were lucky to  have cashed out, you’ll notice they’re always eager to chat about the present day market conditions. So keep those conversations going. They might have turned cautious now, but they or someone in their family or circle of friends is a potential buyer. And you’re more likely to close a deal with such a buyer than with someone who’s fishing all over the market. So keep calm and keep talking.

Now real estate has always been a very uncertain trade. Even in the good times after you’d made a sale, you were unsure when your next sale would happen. You had to start from scratch, from zero. But somehow, you’d be off the mark soon. This is now a different innings. Getting off the mark is getting difficult for you’ve been stuck at zero for too long. But keep calm and face up. If you’re hungry for runs, they’ll come, if not in fours and sixes, they’ll come in singles and twos. But the days of being a solitary player are over. To score now, you need to be part of a team, sometimes a batsman, sometimes a runner and sometimes a 12th man. The independent real estate consultant aka broker will soon be a marginal player in this sector. So keep calm and be part of a real estate sales team.

Is being just part of a real estate sales team enough to generate sales? Not necessarily. I’ve found that clients have become increasingly confused about what they’re looking for. We could blame it on the fact that it’s now a buyers market and a client is in no hurry to close a deal. They’ll also embarrass you by possessing more knowledge about the projects you’re driving them around to. Are you in your eagerness to close a sale discussing every available project in your city? Don’t do so. Stay focused on a few reputed, remunerative projects. Stay ahead of your client. Keep calm and keep focused on what you know.

The biggest advantage of being part of a sales team is that you’ll get to sell an exclusive project picked up by your team from a developer.That does away with half the competion. One half still remains, those are your colleagues. They’re friendly competion, you’ll win some, lose some and share some sales. All that’s there to be done is to create a buzz about this exclusive project.

A buzz? Now that’s another post !

At the beginning of this post I mentioned attitude. It’s a metaphorical synonym about keeping calm. So, keep calm and keep selling real estate. The sales will happen.

 

 

 

 

 

 

The Real Estate Bill Impact On Ordinary People

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Manjula Chaturvedi, 64 has had a smile on her face since morning. Vishal Bhagat, 39 is particularly cheerful today. Sanchit and Payal Sinha, both 28, have scheduled a busy weekend for themselves. Suresh Anand, 53 is on his way to office, earlier than usual.

This is an unusual day for these five people. There’s news been trickling in since last evening. A long pending piece of legislation has finally been passed by the Rajya Sabha. The Real Estate Regulatory Authority Bill, RERA is on its way to becoming law.

Manjula, a retired teacher has accumulated about 43 lakhs from savings and her late husband’s retirement payout. Two years ago she had decided to invest in a high rise apartment project in Greater Noida, but then most friends and relatives advised her to stay away from the real estate sector. They caustically remarked her funds were safer with her banker than with a builder. Safer maybe, but they were actually diminishing in value. While she was aware about the kind of returns real estate can yield in the long run, she was particular that her money be invested securely, and safeguarded somehow. And then, this morning’s newspaper headlines brought a smile to her face.

Suresh Anand had been preparing for this day for almost a year. He was aware of every clause in the RERA bill. He had kept a track of every proposed amendment, and knew of the pressure exerted by the builders lobby while the bill was being drafted. After all, he was part of that lobby.

Vishal Bhagat had also been tracking the RERA bill journey with great interest. He knew the passing of this bill just might be the catalyst that would turnaround the depressed real estate market. For a serial investor like him, a upswing in market rates during the course of 2016 would help him exit from a few under construction projects giving him fresh funds to invest in newly launched projects. Newly launched and covered by the RERA bill provisions.

Sanchit and Payal Sinha are both corporate executives, living in a rented apartment in Gurgaon. Their housing loan was swiftly approved an year ago, and they’d been getting calls from broker and developer offices offering attractive projects to invest in. But Payal was clear that she didn’t want to invest in a flat with an uncertain delivery schedule. She also didn’t want to sign on a one sided builder buyer agreement. A few months ago she had told Sanchit that the passing of the RERA bill was just a matter of time. And yesterday, that time arrived.

For these five people, and a few million more across India, a timeline now divides Real Estate – A pre RERA era and more importantly, a post RERA era.

Manjula Chaturvedi is aware that out of every cheque she hands over to a builder, 70% of its amount goes into an escrow account from which funds can only be used for that particular project. Payal and Sanchit realise that this will ensure that their flat, when booked, will get delivered in time. Suresh Anand wasn’t too happy about this, he’d have preferred a 50% limit, but then non diversion of funds would mean happier customers who’d again invest in any new project of his.

Sanchit is reassured to know that every builder will have to file details of all approvals with the state regulatory authority, clearly mention the carpet area, take responsibility for fixing structural defects for up to five years, and set up an allotees association within three months of handing over possession.

There’s one provision in the bill that has Vishal Bhagat very relieved. Whenever his installment payment got delayed he’s had to pay penal interest @ 18 to 24 percent to the builder. However on those projects whose handing over is delayed, and he knows all of his are running behind schedule, the builder has got away with a measly penalty of a few rupees per square foot per month of delay. But now he’ll be on a level playing field with the builder. The rate of interest payable in case of default or delay will be the same for Vishal as well as the builder. Vishal now expects speedier construction in new projects. He also hopes the ambiguity about the bill’s provisions being applicable to existing projects gets sorted out soon.

But Suresh Anand is against RERA being applied to under construction projects. He feels he already has a lot of work cut out to meet the bills provisions. But somehow, he’s upbeat. He foresees a revival in the market.

That could, and will definitely happen. Payal and Sanchit have scheduled a visit this weekend to one of Suresh Anand’s new housing project site which is being marketed as RERA complaint. Maybe, Manjula might be a visitor there soon. Vishal Bhagat was once a regular investor in Suresh Anand’s projects. His serial investor instincts have been reawakened.

 

 

 

 

 

Get Real On Real Estate

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Are you someone who’s spent 2015 hoping that before the year ends, the Indian Real Estate market will suddenly surprise you by turning about.  Somehow, magically?

Don’t hope. It’s not happening.

2015 was similar to 2014. 2016 could also be similar. Of course, most investors would hope otherwise. Everyone connected with Real Estate in India would hope so too. Developers who had bought large land parcels on which they’d launched a number of attractive projects, Investors who went on a booking spree in these projects, Real Estate consultants who urged these investors to quickly close deals, everyone’s got stuck in this quick sand of stagnancy which swiftly broke down the perceived unshakable foundation of Real Estate as an asset class.

Did we see it coming? No one did or maybe no one wanted to. This was one long Bull rally whose reversal seemed impossible. On a macro level Real Estate is so much like the stock market. In the latter, trends can reverse in a matter of hours. In the former, trends can take years to reverse, so many years that no one would remember the last reversal. Now, when was that?

2008. Remember how the housing bubble burst?

It’s history. Who cares? The market bounced back, right?

But what really happened next? A lot of affordable  projects were launched in the residential sector. The commercial sector, except for Malls, got ignored. Some developers launched commercial projects in far off areas, with an assured monthly returns commitment. As long as the market rallied investors got these monthly returns while the projects crawled along. In the residential sector, money began chasing money. Projects were sold out on launch, the secondary market saw unexpected appreciation. You could book and exit in a few months time. And then reinvest again. And again repeat the cycle. And then one day, you couldn’t exit. That day turned into months, and now it’s been a couple of years.

When sellers become their own buyers an implosion is bound to occur. When developers see their funds drying up, they go super slow on construction. When an end user can’t shift into that Flat or office he booked years ago,  they’ll surely add their bit to the already negative perception about Real Estate.

So what’s happening now?

We’ve begun to see distress sales, we’ve started to hear distressed voices. This is when the market starts to bottom out. Investors and developers have inventories which they want to off load. Some desperately, some discreetly.

It’s time to get real on Real Estate. It’s time to buy Real Estate that’s real. Real enough to live or work in right away. A ready apartment, a ready office or shop. Buy it. Live / work in it, or rent it out. The rental market is booming. But that’s another article.

Get real on under-construction projects too. The journey from construction to finishing to registration can, and will be painfully slow. Keep looking for an opportunity to exit.

If you’re someone who’s sitting on funds to invest, then look beyond the metros and large cities. There’s very affordable land or realistically priced housing projects on offer there. If you’re willing to stay invested for a long time, you’re bound to get a return.

There are always some unknown opportunities available even in large cities. For example, if Delhi’s L Zone housing development gets all its clearances soon enough, this could just trigger off that Real Estate reversal that everyone’s hoping for.

2016 would then have a lot to look forward to.