Playing On The Fear Factor Could Harm India's Real Estate

As he tried to convince a prospective buyer to make up his mind quickly, Ram Lochan, a real estate advisor, explained in great detail that this particular developer happens to be the only trusted name in the sector. The chances of the buyer losing his money might be great if he decided to go elsewhere—the market was full of fly-by-night players, Lochan said.

If one listened from a distance, one would know Lochan's prime motive was to instill in the buyer's mind the fear of getting duped first. His marketing pitch, with its negative undertone, worked and the buyer decided to meet him in a week's time to finalise the deal.

In the meantime, another property advisor contacted this prospective buyer and elaborated the benefits of investing in an upcoming project of a different developer. This agent has an even fiercer negative sales pitch. In the middle of all this, the buyer starts feeling disgruntled and decides not to go with either of the two agents. There is a great lesson to be learnt from this.

If a developer or an advisor pegs the success of his business based on instilling fear inside home buyers' mind, his leap, if any, would be anything but giant. A doubtful buyer would start seeing only negatives, as has been the case with India's real estate sector in the recent times.

In the past three years, several efforts of developers and authorities to bring fence-sitters back to the market have not yielded the desired results. This is because the negativity around the sector has done the damage and buyers still shudder to repose their faith in the property market.

Here are some points for developers and real estate advisors to consider before they go all guns blazing against their competitors:

• For starters, your competitors might be doing the same to you --- the meaner you go, the meaner you get. Even if you have come up with the best-in-class everything, there might be loopholes in your work at which other will play and might succeed in bringing you down.

• It is always better to tell a buyer about the goodness of your own offering than narrating a negative story about someone else's. In a market that plays on negative sentiments, your positive approach can work wonders.

• You are here for a long haul. Building your credibility on the positives is a better way to keep it intact for a long time. Even if you are able to sell off all the units of a project by telling buyers that the other developer who has come up with a project in the neighbourhood is offering faulty units, you might find it difficult to do the same in your new project. Short-term thinking might do great damage to your business.

• Difficult times – which, by the way, are not yet over – have shown us that a passive buyer is the last thing we want. Once they turn our backs on us, it would be quite hard to bring them back here. Even if one of the developers duped just one buyer, the overall atmosphere will turn negative.

• By harping on the negatives, you are damaging the whole ecosystem in which you operate.