Online real estate marketplaces are innovative, so why do consumers still transact offline
The internet has proved to be a boon for everyone who has access to it. Every industry in the world has benefited greatly. The real estate industry is also not far behind. While the mindset of people changed (i.e. people started depending on the internet for all their dealings), developers started leveraging it for selling their properties. This was a positive move because developers started noticing actionable and valid inquiries which actually progressed into a fully fledged sale. And the developers didn’t stop there; they developed websites, complete with animation and blogs and created social media accounts to attract people.
Online communities were started whereby people started collaborating with each other to discuss their views on buying and selling, different neighborhoods, lifestyles and so on. So you can already see how innovative online real estate marketplaces are. Even so, a good majority of people still goes the traditional way? Why do you think that is happening? We have made our observations regarding this:
Authenticity
Buying a property through online means is not all like buying groceries. You are investing huge amounts of money in a deal by sitting in a remote place. A lot of factors are involved in an online real estate transaction. Many questions will have to be answered, like, for instance, who will be paying the closing costs at the end of a deal. Nobody can afford to have a misunderstanding in a real estate deal. So people actually like to look at properties in developer websites, but they still like to come down to see the property in reality to make sure what is shown in the website is actually true.
Authenticity is a major problem. The buyer must know that the portal he is visiting is authentic so he might want to check the buyer credibility. Agencies like CRISIL provide their ratings based on builder reputation, so make sure you do background check of the website before signing on the dotted line.
Legal problems
The rules for investing in real estate vary from state to state. This prevents some people from making the investment beyond their jurisdiction unless they come down personally and clear it. Certain states have jurisdictions that enforce land ceilings, and this could make your investment risky. This is mainly for commercial real estate, so people looking to earn potential income will not do these purchases online.
Paying the brokerage fees
Perhaps the main reason why people prefer to go the online way is to avoid the realtor and the commissions. Unfortunately, that’s where the pain point starts. Brokers manage the listings in the online portals, and not the builders. So you still have to pay the brokerage fees.
Project execution and delivery
The online portals may have online listings, and even for incomplete projects, they portray 3D animations and walk through. While this may seem motivational enough to put the money in, it is entirely on the builder to complete the project on time. If the builder is reputed and has a history of completing projects on time, you can invest. If not, what will you do? People, who are worried about this, will prefer to visit a property for real, before investing.
Real estate investment is a field where honesty and integrity matters deeply. If people feel them threatened, they will back away.