The realtors find different ways to attract prospects all through the year. Thus, the aspiring home buyers also review a wide range of properties before finalizing a home buying deal. Also, the introduction of RERA Act and the imposition of tax deductions make home buying and selling a real tough task.
So, the property sellers got a new way out and that is the IPO-style selling which welcomes Expression of Interest [EOI]. This selling tactic is also known as the market disruption. Interestingly, the realtors who worked on this strategy in India till now have received huge success in selling their township alias the residential projects across the country.
This method of attracting home buyers is better known as the quasi book building that increases the confidence of both buyers and sellers in specific projects. This method also varies costs according to the demand and supply rule.
Concept of Quasi Book Building
This selling tactic abolishes the concept of paying to the middleman and makes property buying and selling a complete personal deal between the aspiring home buyer and the realtor. Also, this method helps the buyers to purchase cost-efficient residential property as he/she is required to pay only the housing price to the seller instead of paying a particular amount as commission or brokerage to the middleman.
Features of Quasi Book Building
- This is a simplified home buying-selling procedure as it saves time due to the prohibited entry of the middleman in the entire process.
- This process is transparent and thus turns out to be a fair deal for both home buyers and the sellers. This is possible as the price offered by the realtor is the real-time cost according to the property market.
- Here, the prospect is provided with the residential unit of his/her choice in the pre-booking stage that too with the price tag at which the seller invites other prospects.
- The aspiring home buyers are treated on the first-come-first-serves basis particularly during the pre-booking stage. This proves beneficial as the sellers find the best selling price on the basis of a data-driven approach.
- The realtors serve uniform base price to all prospects while selling residential projects via this methodology.
According to a real estate expert, the buyers play an important role in deciding the price of their housing unit when approached via the quasi book building method. This direct involvement of the buyers in the process of estimating the final selling price of a property makes the entire process transparent. Another positive effect of IPO-style selling is that the sellers get a clear understanding of:
- Customer Demand
- Consumer Expectations
These points help the developers understand prospect’s requirements and the current property trend as these things improves the construction quality that eventually satisfies the end-demands.
Benefits of IPO-Style Selling for Home Buyers
- The buyer can find a budget-friendly deal with the help of this home buying tactic.
- In case, the prospect places a higher amount of bid in comparison to the actual selling price, then also the buyer is required to pay the final buying price instead of the amount placed by him/her while bidding.
- If the IPO-sale turns successful then the builder/developer has to deliver the residential unit according to the stringent rules of the RERA Act.
- In case, the IPO fails then, the buyer has the flexibility to opt out with minimum loss.
Companies that Successfully Sold Residential Properties in IPO-style
- Tata Housing sold their housing project named Gateway Capital project, in Gurugram in the year 2013. This project was so much successful that it was over-subscribed by 20 times.
- In 2013 only, the Lodha Group received 1,300 applications in a 10-day long process and sold its residential project named Blue Moon in central Mumbai.
- Similarly, in 2015, the Lodha Group again came up with IPO of a housing project in Thane and received 2,500 applications from the aspiring home buyers within the course of nine-day IPO.
- The well-known Puravankar group received an over-subscription by 1.6 times for the Provident Park Square township.
While taking the above-mentioned facts into consideration, the IPO-style property selling is equally beneficial for both buyers and sellers. But, one should assess the project, location, budget and market condition before making a final decision.