Group buying is an interesting new trend that is garnering attention from everyone who has any stake in the real estate market. Now-a-days, Group buying has become a viable option for home buyers looking forward to get attractive discounts.
In this model, groups of buyers approach developers either directly or through agent representation to negotiate ‘scale-based bargains’ which would be impossible individual home buyers to achieve. This method works well and has a special pertinence in the festive season.
Concept of Group Buying –
Here is how it works. Potential home buyers connect with one another through a common platform, usually provided by a third party or a group buying company and form a group. The company then goes to the builder with a couple of orders and negotiates for possible discounts. The builder, sensing a good opportunity to sell a number of his properties, agrees to the discount. Typically, there is negotiation on discount but the discount is higher than what is offered in individual cases.
Win-Win Situation for Everyone
Property buyers instead of waiting for offers, discount or real estate prices to come down, form a group with friends, family, colleagues or even strangers who are interested in the same project are in a beneficial position when it comes to cumulative bargaining power.
Developers get a readymade market to sell their properties in bulk without spending anything in customer acquisition and marketing. This reduces their cost of selling. This savings can be passed to the home buyers in the form of extra discount. Instead of approaching individual potential buyers at huge dedicated marketing costs, it makes eminent sense for them to negotiate with groups of buyers and strike a deal that brings in substantial amounts of much-needed liquidity immediately. Group buying also helps developers sell the properties faster and focus on the next venture.
Here are some group buying examples
|Area||Actual Price||Group price||Discount|
|Dombivali, Mumbai||4000 per sq feet||3200 sq feet||20%|
|Krish City Bhiwadi||13.75 Lakhs||12.95 Lakhs||80,000|
|Paramount Floraville, Noida||3750 per sq feet||3525 per sq feet||6%|
How group buying works?
- Buyer initiates the deal
In this case, the potential home buyer posts his or her wish to buy a home in a housing complex. The deal is then listed on the website and potential home buyers are encouraged to form a group if they want to buy a house in the same housing complex or from the same real estate developer. The home buyer can also visit the office of the company and get the required information. Once the group reaches the critical number, the sales team contacts the home buyers, aggregates the demand and submits the bid to the builder. The deal is then negotiated, and finalized. The home buyers get the agreed group discount.
- Broker Company initiates the deal
In this case, the company posts a potential housing complex that will come up or an existing one. The deal is displayed with discount on offer at the website of the company. The deal also has an expiry date after which buyers cannot form the group. The buyers are encouraged to form a group to avail the discount. Buyers typically register and then show interest in the property posted by the company.
Group Buying sites in India:
GroupHomeBuyers.com – GHB, a venture by Shilpa Shetty Kundra; harnesses the power of Group Buying and empowers each individual Home Buyer to get significant volume discounts which are almost unachievable individually
Groffr – Groffr is derived from ‘GRoup OFFeR’ with a mission to promote the concept of group buying which helps both the buyer (availing higher discounts) and the seller (inventory moves fast)
Homebuyerscombine.com – HBC binds the power of group-buying and uses it to negotiate with developers for substantial discounts for each home buyer.