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Published on 3/14/2018 3:05:39 PM
Is word-of-mouth good or bad for home buyers?
Word of endorsement by existing home-owners, whether good or bad, does hold a lot of credibility, thus making it a key decision-making factor for potential buyers. Read on…

Sarah Kapoor, a working professional, always swears by one saying - Sometimes, the most influential thing we can do is listen. "I have been working in the city for the past 20 years and the city has impacted a lot of my decisions. One of the main reasons why I pushed myself into purchasing a house was because I wanted to proudly flaunt my name-plate outside the door of my 'own' house," she mentions.

However, like many others, even Sarah's home buying journey had its share of drama. Like every buyer, she grappled with many questions: which unit size would be apt for me? Will I be able to secure a loan? Should I ask my parents to help me with the finances? The list was endless, however, she steadily found answers to most of her queries.

"The homebuying journey was a fulfilling experience and through it all, I understood the importance of never underestimating the opinion of existing homeowners of the project, as they help objectively decide,"Sarah adds.

So, do endorsements by existing homeowners wield an influence on potential buyers?

Well, our experts certainly think so.

"People put in their life savings and many a times top it up with loans, thus increasing the stake manifold, should anything go wrong with the investment.

One should ensure that their research is impeccable. One of the key sources of information are experiences of existing homeowners. However, here too, they should tread with caution as what does not work for somebody could work for you," says Ravi Ahuja, Senior Executive Director - Mumbai & developer services, Colliers International India.

Experts speak

"Referrals act as the ultimate drivers in maximising sales in an developing industry like realty. While word-of-mouth serves as key testimonial to the services provided, they can also turn the tables. Referrals by homebuyers influence potential buyers, as it accounts for 30% of sale in the industry.

β€” AS Sivaramakrishnan, Head - Residential Services, CBRE South Asia

"If you are looking to buy a resale or ready-to-move-in flat, an experience shared by existing homeowners holds great credibility forothers. Thus, an acquaintance purchased a property in Mumbai recently and he recommended it to all of us and as a result, later his elder brother and his colleagues also invested in the same project.

β€” Minnie Bhatt, Design Director, Minnie Bhatt Design

The other side of the coin

"The real estate sector is going through a lean patch. So, there is a lot of apprehension among buyers, which is why there is not much traction taking place in market. So, a positive story about a project being delivered on time or an individual making a successful transition from a tenant to a homeowner sends out a happy message, thereby influencing people to take the plunge. Positive responses attract lot of interest among customers and strengthen their belief in a particular product.

β€” Maariya Khan, psychologist

"My parents have always believed that no other asset gives the kind of returns like real estate. Hence, they recently, bought an apartment in Pune; however, the building went into redevelopment within six months (so, now my parents regret the decision). But as a result, they also learnt one of the most important lessons - the need to consult existing owners and understand the state of affairs of the building because had they done it, then they would not have pooled in their savings into that project.