When the leading real estate company DLF sold 1250 flats within 2 hours of launch in 2009, there were many eyebrows raised. After all, in a market that was weathering crisis of confidence and liquidity it was hard to believe in the first place. The fact, however, has been that the network of dealers had a huge role to play in this marketing mantra.
DLF is not alone that has been riding high on its trusted dealers. Most real estate developers across the country launch their projects through dealers appointed by them. Even before the project is formally launched by the company, most of these dealers, manage to sell the project, by hype and word-of mouth promotion. This ensures that the cost of each plot/ apartment/ house is also increased substantially, thereby creating an artificial boom in the market.
According to industry sources this practice is a well designed mechanism to ensure that by the time the real estate developer formally launches the project, prices rise substantially. The fact is that more often than not it is the dealers themselves who pick up the property in the ‘pre-launch’ phase and they end up making a neat profit. On each unit (plot/ apartment/ house) sold, the dealers also get a commission (varying between 1.5- 2 per cent) from the real estate developer. Since the dealer is doing the whole ‘pep-talk’ with the buyer, the real estate developer simply pockets the profit and washes their hands off the dealers.
Requesting anonymity a property broker told Track2Realty that such a deal is a win-win situation for all. While the realty company that raises funds for the project gets its project sold instantly, the brokers get a better commission. And if they can hold the property for a while, the premium is even better.
By creating this artificial demand, dealers also lure customers by offering assured allotment and seek complete down-payment of the unit being bought. The developer thus makes profit within days. Almost all realty companies who have successful launches in the last few years have taken this ‘dealer’ route to ensure complete success of their project.
