Navigating the marketing bling
How do we 'see the unseen' while exposed to appealing marketing advertisements of real estate projects?
A Caucasian family with a child enjoying a picnic in an open lawn next to their house.
A video shot in international locations with a baritone voiceover, showing you a glimpse of how this project would ‘redefine luxury’ for you.
An email with an attractive ‘never-before-never-again’ offer that says ‘Buy now or the prices will rise tomorrow’.
We are all familiar with these typical marketing communication and advertisements from real estate developers on an everyday basis. They hit our email, SMS boxes , pop up on Google ads and Facebook and web banners all the time.
In today’s post, let us discuss what do we need to watch out for while being exposed to all kinds of appealing marketing communication from a real estate developer.
Brand ambassadors mean nothing for you as a buyer
The oldest trick up a real estate developer’s sleeve is to engage a brand ambassador – typically a movie or sports celebrity- to represent their brand or promote a specific project. Our country is not strange to creating fandoms with many of us worshipping cricketing stars and movie superstars and grant demi-god status to them collectively. See how many of us generally estranged to football as a sport embraced Messi-worship a few days ago 😊
In reality, the presence of a brand ambassador or the claim from the developer mentioning that the celebrity has bought a home/plot in this project should by no means impact your decision on the project, irrespective of the credibility of the celebrity in their professional sphere.
Why?
The celebrity has no legal accountability towards execution of the project on which you spend your hard-earned money. Much has been written in the press about Amrapali group’s stalled projects in Noida and how an Indian cricket icon was the face of the group for over 6 years, lending credibility to the developer. While the home-buyer group has filed a petition against the cricketer for mis-representing the builder, the cricketer himself seems to have filed a complaint against the builder for defaulting payment of endorsement fee of 40 Cr to 150 Cr.
When you are buying houses driven by your star promoting them, you are in fact indirectly paying for their hefty endorsement fee that is eventually loaded on your price by the developer. Celebrities have zero legal accountability towards you as the home buyer and hence you should think twice before getting swayed by any celebrity endorsements. On the contrary, a strong real estate brand with a robust delivery track record should not need celebrity endorsements if their past projects speak for themselves.
A HongKong-based developer was actively promoting their luxury project in Delhi on the premise that yet another famed Indian cricketer has bought a penthouse in the project. Media reports broke out recently on how the project has come under the RERA scanner for an alleged land dispute.
Many builders in south India engage movie celebrities – including older television artists to drive credibility to an unknown brand specifically for plotted land projects.
When any developer advertises that your favourite celebrity could be your neighbour, it is most likely that they have made a barter arrangement to offer flats/plots to the celebrity in place of an endorsement fee. Most celebrities who actually purchase a home in luxury developments with an intent to live do not desire to make the purchase public and prefer not to promote the development.
In a nutshell we need to separate the professional credibility of the celebrity from their role in promoting a real estate project in exchange of endorsement fee.
That branded sports academy or the concierge. What is your lifecycle cost?
Many branded developers increasingly undertake brand tie-ups to offer a service-led proposition beyond just a home. Their marketing pitch is to communicate that they have made adequate provisions to elevate your quality of life post occupation.
Some of them include:
a. Sports academy owned by a sports icon – cricket/badminton/swimming academy that will coach your children within the development
b. Branded international concierge services
c. Fitness Centre franchise owned by renown Indian or International athletes
d. Salons, spas or other services operated by international brands
Many developers might have genuine intent in offering these services as a convenience but there are certain questions you might have to reflect as a buyer.
a. What is the total lifecycle cost/operating expenses of these services? While these services scream about luxury and convenience on a marketing billboard, what does management and maintenance of these services entail post occupation?
b. Is it economically viable for the contracted brand to run the business catering only to the residents within the project? What happens if an year after occupation the sports academy decides to exit the development while this was one of the factors for you to purchase the property?
c. What kind of agreement has the developer entered into with these brands and what is the scope of services of these brands?
d. If the developer markets these branded services for a complimentary period, ask in writing about the renewal and ongoing costs post this freebie period.
e. Does your agreement with the developer bind the RWA/society to mandatorily use these branded services for a stipulated time period?
The last question is of course to truly reflect on which of these services are ‘sticker-label’ services and which ones offer genuine value to you as a buyer. In reality, many of these services are subsequently discontinued by the RWA due to the differences in expectations and actual value provided against the economic cost.
Do not get swayed by fancy international brand tie-ups which developers intend to deploy to offer you a ‘brag quotient’. A lot of times, these ‘celebrity’ brands are not even as reputed in their home market as much as the builder in India tries to make you believe. These are mostly run as franchisees and the ultimate quality standards depend on the owner-franchisee running operations for your project. These are all services the residents and RWA can contract with independently, provided there is adequate building provisions in the project.
Seeing and hearing ads everywhere does not mean great for you
A typical marketing strategy for most developers especially during a new project launch is to flood the city with marketing hoardings, news paper advertisements and other digital ads during a short bust of time. This is of course is a feature of new product launches in any B2C industry, but what amplifies the real estate marketing blitz is the sheer quantum of spend that developers can afford to splurge on. You would have typically noticed that in this 3 to 4 week window, you get flooded by real estate ads across all media including different brokers on why this project is the best to invest. There is a high probability a friend/colleague or two might have even invested in the project and it is the buzz in your workplace.
However, it is prudent as a buyer to take a step back from the euphoria, analyse the product offering on its own merit and evaluate if it is the right fit for your need. The ecosystem will always push you to take a decision today and convince you that you should have taken the decision yesterday. You might see public that thank buyers for the stupendous launch success highlighting how hundreds of units have been sold in a few hours of opening the sale. None of this external communication should impact your analytical and objective decision-making on the purchase. The eternal truth is no opportunity to buy homes or plots perishes in a day or a week. There is always another land parcel that is opening up or another developer that is entering the locality.
It is wise not to fall for any ‘urgency-led marketing’. For the ecosystem that is pushing you for a decision, you are merely a row in an excel sheet. For you it is heard-earned savings and possibly a leveraged purchase through a home loan. Hence your money, your pace.
Brochures are no substitute for legal documents
While there has been some legal sanctity to marketing brochures and other material post introduction of RERA, it is wise to separate any marketing material from a legal document. Developers typically take significant creative liberty in their marketing materials – from shooting in an exotic international resort to represent your project to showcasing a happy family cycling in a European style public park. Watch out for the words ‘representational image’ – this one legal word is sufficient for you to always conservatively estimate what you would get in reality versus what is painted in the brochures. Images with ‘actual shots/photographs’ lend actual credibility – beware if the developer still uses ‘representational images’ even closer to/after project completion as it indicates a possible gap between promise and delivery.
There have been cases where the state RERA authorities have allowed buyers to claim full refund with interest from the developer, if the promised amenities/facilities in the marketing materials are not being executed in the project. Nevertheless, it is prudent to insist that your sale deed captures all promised amenities, facilities and infrastructure – inside the flat or outside the home/plot and not hope that the brochure or marketing email would come to your legal rescue.
Disclaimers, disclaimers and more disclaimers
As buyers it is our responsibility to understand any fine-print that exists in the marketing materials. As humans we are often wired to tap mental short-cuts for making decisions and stunning visual imagery of any product precisely taps this instinct. This is probably why it is essential to spend time on the disclaimer section to understand in details the claims made in marketing materials. Developers use this legal tool effectively and hence as a buyer, disclaimers could be potentially your treasure trove for real information on the marketing claims made.
15 minutes to paradise
A common disclaimer shenanigan is to claim a commute time of ‘only 15 minutes’ to a business district or a shopping mall or a school. One hard look at the disclaimer and you realize these are ideal driving conditions, possibly achievable on Sunday afternoons and in some cases only when some new infrastructure project is delivered (a metro line or a flyover). It is best to spend time and effort and undertake an actual commute from the project location in weekday peak hours to get a realistic assessment of drive times.
Seeing is believing. But believing everything we see could be deceiving.
For those of you who have been to developers’ sales galleries, you would admit that the real estate industry has managed to successfully learn the ropes from the hospitality sector. Most of these experience centers glitter with modern design aesthetics, premium lighting and furnishing while the service staff pamper you with new-age hospitality. ‘Jo dikhta hai wahi bikta hai’ is the fundamental principle behind these glittering sales galleries.
While developers put their best foot forward in creating a wow factor with their experience, it is important to again separate this experience from the product you are buying. It is good not to let the experience over-shadow the due diligence and rational evaluation of the developer credibility and project suitability to your need.
A typical allegation that real estate buyers have is that they were treated like a royal by the developers’ teams, but only until they cut a cheque to close a deal. The reason behind this disappointment is one extends the ‘feel’ of the initial hospitality to the final project quality and delivery. These two could be seriously uncorrelated. Some of the good quality developers at times do not have half-decent experience centers but ultimately meet or exceed expectations with their delivered product.
Some developers go to the extent of offering luxury cars with chauffeurs to help your commute to the sales gallery. Some offer you tasty chef-curated food and wine. Sure, enjoy these luxuries while they last but more the pampering in this form, the more you need to be circumspect on the developers’ track record and his own confidence on the product being sold.
Paris in your backyard
It is not uncommon for developers to showcase images of international cities, locations or landmarks to drive up the buyer desire and hence price realization for a project. Many advertisements unabashedly claim that your family would enjoy the lifestyle of New York, Paris or London by purchasing a plot or home in the project.
It is important as a buyer to ask the developer on the validity of their claim – have they engaged overseas architects or consultants to design the project so that the building would stand out from other neighbouring projects? Are any innovative amenities offered that would really offer your family unparalleled convenience? As buyers we need to call out ‘sticker-label’ marketing from a genuine effort by developer to offer international lifestyle or premium conveniences. It would be downright foolish to pay a price premium for a project that claims international lifestyle without genuine effort that can be demonstrated by the developer.
Book now and avail a free family holiday to Europe
Promotions promising overseas trips or luxury travel experiences are commonly used by developers to lure buyers further and add fancy imagery about the project. Remember that the cost of your Europe trip is built in your apartment price already.
It is wiser to ask the developer to offer you a price discount for the value of the trip and let go of the offer, if you are convinced about the project otherwise. If you are confused between 2 projects, these kind of offers should never be the decision-making factor as it does not add any value to your final living experience.
In summary, it is important to separate the actual product from the experience and visual impulses that you are taken through while purchasing a property. While glitzy ads are intended to both communicate the benefits and lure you to purchase the project, developers at most times extend their creative liberty into promising a wonderland which ultimately cannot be materialized in actual execution. It is good to temper your expectations and continue to ask the relevant questions towards decision-making without letting visual appeal over-shadow your rational evaluation process.