Group buying catches up in Bangalore

Homebuyers are realizing the power of collective bargaining. A relatively new concept called group buying is fast catching up with buyers in the city. About 10-15 like-minded families come together and approach a developer to book apartments. This approach results in a better bargaining position for the buyers.

“These are not the usual group housing communities, such as teachers’ colony or lawyers’ apartments, but upper mid- and high-end segment buyers who wish to stay in a certain locality,” says N Niranjan, an agent and sales person for several leading developers. “These prospective buyers come together to have better leverage, and higher discounts in buying property.” These collective bargaining communities today have been able to get heavy discounts in the price of the property, and waivers in other maintenance and membership costs.

Take the case of Mrinal Mukerjea, an NRI who returned from Canada a year back. He and his wife wanted to stay in the Northern outskirts of Bangalore, in a place where there was a lot of greenery. He got in touch with his NRI network online and posted his requirements inviting others who might be interested in living in the same area. He got an impressive number of 24 families, all expats. Collectively they approached several developers and negotiated a deal with one with a drop of over Rs. 10 lakh in the cost of each apartment and a waiver on membership for the clubhouse, in addition to more discounts in the other betterment charges.

“The developers give these discounts as they are able to move a large inventory at one go and the economy of scale works,’’ says Niranjan. “It also works in terms of goodwill, which in-turn translates into getting inroads into these groups for greater quicker sales.”

There are however certain unwritten rules that are followed in these sales. For instance, these special bargain rates are not given at the launch of the projects, as the rates are already discounted. Second, the numbers have to be significantly high to avail these discounts. The minimum number of confirmed buyers has to be above 10 and that too in the upper-mid or luxury segment. Typically collective bargaining is not encouraged in the Rs. 35-50 lakh segment unless the number of confirmed buyers is above 15.

Source: MagicBricks