Professional Documents
Culture Documents
Consumer Perception in Real Estate
Consumer Perception in Real Estate
On
Consumers Perception and Expectations
while
Buying a house
Submitted in partial fulfillment of requirement for the award of
the degree of
MASTER OF BUSINESS ADMINISTRATION
TO
GURU GOBIND SINGH INDRAPRASTHA UNIVERSITY
NEW DELHI
Designations:
Certificate
STUDENT DECLARATION
I hereby declare that the Project Report conducted at
EARTHCON CONSTRUCTION PVT LTD
Under the guidance of
Ms. Nitika Nair
Submitted in partial fulfillment for the requirement of the degree of
MASTER OF BUSINESS ADMINISTRATION
To
Guru Gobind Singh Indraprastha University, New Delhi
Is my original work & the same has not been submitted for the award of any other
degree/ diploma/ fellowship.
Place:_____
Sign__
Date:______
Student Name
ACKNOWLEDGEMENT
My sincere thanks to faculty supervisor Ms Gurneet Kaur and Ms. Nitika Nair under
whose guidance and kind cooperation I was able to complete the project work titled
_______________________
Mohd Faisal Khan
Letter of authorization
Table of Contents
Chapter No.
CHAPTER 1.
1.1
1.2
1.3
1.4
CHAPTER 2
2.1
2.2
2.3
2.4
Title
INTRODUCTION
Executive summary
General introduction
Industry profile
Company profile
RESEARCH METHODOLOGY
Objectives of the study
SCOPE OF THE STUDY
Research Design
Sampling Design
2.5
2.6
CHAPTER 3
CHAPTER 4
4.1
4.2
4.3
CHAPTER 5
BIBLIOGRAPHY
Page
No.
Chapter 1
INTRODUCTION
1.1
EXECUTIVE SUMMARY
I started my project on 1st June, 2010 in Earthcon Constructions Pvt Ltd (A Real Estate
Company) and was asked to study The consumers perception and Expectations while
they go to buy a house.
I was asked to collect the information related to real estate and the information needed to
buy or search property from the people who can really have experience of purchasing
property or want to buy house or property. For that I targeted to meet and call people who
were doing jobs at top levels in various organizations. I collected data from Delhi and
NCR region.
First of all I prepared the questionnaire according to the job given to me. The objectives
of my questionnaire are as follows
Finding the consumers perception while they go to buy a house.
Finding the expectations of a consumer when they go to buy a house.
Finding all the solution to their perceptions and expectations.
A secondary objective was to gather information about what customers want from real
estate developer and Regulatory body working in Real estate sector.
I started my survey from Centre Stage Mall and Great India Place, Noida sec-18. I
collected data of 100 people which has helped me to find out their perception and
expectations. Few of them are as follows People do not have a well defined expectation from the Developers.
People are not aware about the process of buying a house /property.
People are not aware of the legal and technical documents which they should
check while buying or searching house/property.
Whatever information builder provide to customer in there brochures are condition based
and customer does not understand it in same way. Builders not selling their project
directly to END User. People do not know much about the Real Estate sector.
1.2
General Introduction
1.3
Industry profile
Authority, till the environmental clearance has been sought. In cases where approval has
already been granted it is suggested that construction activities should be allowed. In the
intervening period the builder / developer can obtain the environmental clearance
certificate. In the case of the environmental clearance certificate being denied then
appropriate action if necessary and warranted can be taken against the developer / builder
and builder be given time to get clearance before he applies for completion certificate,
otherwise the completion certificate will not be given Furthermore, in the case of future
proposed projects the environmental clearances should be taken by the States themselves
or by the planning bodies and not b individual builders.
Land Acquisition: The Land Acquisition Act of 1894, still, to a large extent, governs the
procurement of raw land. With the changing investment scenario it has become necessary
to review the existing law, in order to ensure that private developers and colonizers
procure the land directly from farmers and land owners without putting undue financial
burden on State/ Central Governments on land acquisition for public purposes. Today, a
builder is governed by Agriculture Land Ceiling Act even after the land have been
urbanized in the zonal plans / master plans. This makes builders to create several
companies in order to circumvent the archaic laws. It is submitted that once the land has
been urbanized and incorporated in the master plan, then Agriculture Land Ceiling Act
should not apply and builders should be permitted to acquire lands as per their
requirements, for the development of townships.
Foreign Direct Investment (FDI): Suitable modifications in the FDI guidelines are
required, particularly in repatriation of funds, clarification on the basic definition of
built-up area, streamlining of Clearance procedures as well as the opening up of the
Retail Segment to FDI. This aspect has been discussed in detail in Section II of this paper.
Service Tax: Service tax in relation to construction of residential complexes having more
than 12 houses have been proposed to be introduced as a new service. However, no
rationale has been provided for exclusion of services in relation to construction of
residential bungalows, which may not form part of residential complexes.
1.4
Company profile
2)
REVIEW OF LITERATURE:
(I name it RERBI - Real Estate Regulatory Body of India), then life for everybody in
INDIA might be safer.
Fallout of real estate boom:
The boom in the real estate saw emergence of many builders, who played upon the
emotional side of human nature to own one's own dream house, commercial space etc.
Besides the ever rising prices of the houses/flats etc attracted many to invest in the real
estate with a hope that their money will give the best returns if invested in
the real estate sector. The interest of the consumer in the real estate lead to heavy
bookings of the buildings, innovation of the concept of pre-launch bookings, the
flats/commercial space were sold while at the drawing board stage. The consumer never
bothered to check the credentials of the builder, sanctions by the competent offices etc.
Instead the consumers were led by alluring advertisements issued by
the builders, promising delivery of possession of constructed building/flat within the
stipulated time. The builders promised refund of money immediately on cancellation,
some of them also promised assured returns by way of rent. After the bubble has burst,
needless to say, the promises of the builders have gone for six. The purchaser/consumers
have paid the entire sale price/major consideration and they are under debt of
bank/financial institutions, savings have evaporated and there is no sight of completed
building. The promising builder has vanished or has started avoiding calls; request for
refunds, delivery of possession is unheeded. Instead some builders have the audacity to
demand more money on account of alleged escalation cost with a remote possibility of
possession being handed over to them. What do poor and harassed consumers do in such
circumstances. I need to emphasize consumer is not helpless and should not allow the
builder to run over him. He should fight for his right, the law of land supports him in this
regard. The Consumer Protection Act, 1986, will come to the rescue of such erring
builders and will force the builders to pay compensation to the consumer, hand over the
possession of the flat booked/alternative flat in the same locality and will ask to builder to
bear the cost of escalation, if any, on account of rise in price of constructing a building.
The purchaser/buyer is a consumer within the meaning of
the above mentioned Act and failure of the builder to hold on to the promise made at the
time of booking in delivering possession etc would constitute deficiency of service.
A cheated customer can lodge a complaint with the consumer forums pointing out the
deficiency of services by the builder. A consumer court is divided into three forums
namely, district forum, state commission and National Commission. Where the value of
the property is less than twenty lakhs, the complaint will be filed in the
District Forum. Where the value of the property is more than twenty lakhs but less than
One Crore the complaint will be filed before the State Commission and where the value
of the property is in excess of Rs. One Crore the complaint will have to be filed in the
National Commission.
In the matter of DLF Universal Ltd Vs Brig (Retd)Kamal Sood, the National
Commission, reported as MANU/CF/0069/2007 was faced with a situation, wherein the
consumer was led by the advertisement of the builder of delivery within stipulated time
and consequently on the failure to deliver, the builder contended that government
permissions, such as approval of zoning plan, layout plan and schematic building plan
were not given, thus the delay in construction
should not be a ground for grant of compensation to the consumer. The consumer was
further burdened with the escalation cost due to such delay. The Honorable National
Commission observed that it is unfair trade practice on the part of the builder to collect
money from the prospective buyers without obtaining the required permissions such as
zoning plan, layout plan etc. It was further held that it is the duty of the builder to obtain
the requisite permissions or sanctions for
construction etc in the first instance, and thereafter recover the consideration money from
the purchaser of the flat/buildings. The National Commission further observed that if
there is any express promise that the premises would be delivered within the stipulated
time and if it is not done so, escalation cost is required to be
borne by the builder.
In another matter titled as Veena Khanna Vs Ansal Properties and Industries limited,
reported as III (2007) CPJ 185(NC), the National Commission set aside an order of the
State Commission, wherein the builder was directed to refund the money to the consumer
along with the interest @ 13%. In the alternative, it was directed that if the builder
chooses to hand over the possession of the flat, the order of refund with interest will not
come in operation. The builder taking advantage of the order refunded the money,
because of the rise in the prices of the immovable properties. The National Commission
observed that refund of money with interest at bank rate does not mean that the
complainant is adequately compensated for delay in construction of flat by the builder
and not delivering the possession of the flat. It was noted that because of the delay in
construction and delay in deciding the matter it is practically impossible for a consumer
to purchase a flat at the market price. It was held that it was the duty of the state
commission to direct the builder to deliver the possession of the same flat or flat of
similar size to the consumer with compensation for delay in delivering the possession. Or
in any circumstances, adequate compensation ought to have been given so that the
complaint could purchase a new flat of the same size at the prevailing market rate. Mere
payment of interest is not an adequate compensation.
for sale by a real estate broker who is referred to as the seller's agent. The seller's agent
represents the seller.
The agent who helps you find the home is called the buyer's agent. Usually you will not
have to pay your agent a fee for the time and energy he or she spends in finding the home
and assisting you in closing the sale. The buyer's agent's fee will be paid by the seller
when you complete the purchase of the home. Your real estate agent will also assist you
in negotiating the price, learning about the community, obtaining a loan, inspecting the
home, and in closing the escrow. In some instances, a real estate agent can represent both
the buyer and the seller. This is referred to as a dual agency. This must be disclosed to
you before you make an offer. It is advised that you proceed carefully in this situation,
since your agent will be working for both the seller and you at the same time. If you are
not sure that you understand all of your rights and responsibilities, it is advisable to see
an attorney who is experienced in the purchase of residential real estate. An attorney can
help you with legal and tax questions that come up during the purchase of the home, and
can assist you in reviewing all of the documents and reports that will be provided to you
in the process of purchasing the home. For more information on how to locate a qualified
attorney, order a free copy of the State Bar pamphlet
3. What information must the seller provide us?
In most cases, when you are preparing to buy a home, the seller must provide you with a
Real Estate Transfer Disclosure Statement. This is a pre-printed form that lists many
features or conditions about the home, the land, and the area where the home is located.
The seller must list on this form any possible problems he or she is aware of that might
affect your willingness to purchase the home. This includes, for example, easements,
rights of others to control how you use the property, environmental problems, nonfunctioning equipment, zoning and building violations, and special assessments. The
seller's agent must visually inspect the home and report all facts that he or she feels might
affect your decision to buy this property. If you want information that is not covered in
the Real Estate Disclosure Statement or additional information that is disclosed, put your
questions in writing and ask the seller to respond in writing. You should review the
Disclosure Statement immediately and carefully. In most instances, you will have a
limited period of time to decide whether you wish to proceed with the purchase despite
the stated disclosures. Depending upon your purchase agreement, some sellers will
require a written acceptance of the conditions contained in the statement. Other sellers
will consider your silence as acceptance of all of the conditions contained in the
Disclosure Statement. If you buy a condominium, the seller must give you copies of the
home owners association's rules and bylaws, and financial statements, and must inform
you if there are any unpaid assessments. You should also ask
to see the past minutes of the association board meetings. You might find that there are
pending or future lawsuits or defects in the construction of the complex being discussed
in these meetings. All of which would affect the value of what you are buying.
include a complete description of the property and of any personal property that will be
sold with the house, such as window coverings, kitchen appliances, washers and dryers. It
should state the exact purchase price, including the amount of your initial deposit, any
increases in that deposit, the amount you will pay in cash, check or wire transfer, and the
amount you will need to finance to complete the purchase price. This agreement should
also list any conditions that may allow you to back out of the contract. You will want a
condition that allows you to cancel the contract if you cannot obtain a loan on favourable
terms or if the inspections reveal substantial defects or problems with the home. You may
also need a condition that allows you to cancel the sale if you cannot sell your current
home. Please understand, however, the more conditions you have, the less likely the
seller is to accept your offer. This agreement should also set forth what will happen to
your deposit if you cancel the sale, what will happen if you and the seller have a
disagreement over the terms of the sale, and how the brokers will be paid.
The agreement should also indicate whether you are purchasing the property in "as is
condition" or the seller is warranting the condition of the property. Take the time to go
over each and every term of the agreement with your agent before you sign the
agreement.
7. How can I get a loan?
Most home loans are made by financial institutions such as banks, savings and loan
associations, and credit unions. Other sources of loans are insurance companies,
mortgage bankers, finance lenders, mortgage loan brokers, pension funds and investment
trusts. Lenders charge different fees and offer different interest rates so it pays to shop
around. Your agent will be able to recommend lenders in your area. When you apply for a
home loan, the lender will check your credit rating and review your past employment,
income history, and credit and debt obligations. It will also obtain information about the
property that will be security for the loan. This will include an appraisal or estimate of
the fair market value of the home, a review of the preliminary report prepared by the
title insurance company to determine what liens, easements and other conditions will be
superior to its loan, and a review of any taxes, assessments and zoning regulations that
affect the property. Some lenders will charge you a loan application fee, document
preparation fee, appraisal fee and other fees to consider or close the sale. You should
discuss these fees with your lender before you submit your application.
property, or with your spouse or a third party, as joint tenants or tenants in common. You
can also hold title to the property in a family trust. For more information on the different
forms of ownership, see the State Bar pamphlet
10. Congratulations!
Whether you are purchasing a home for the first time or for the fourth time, the day of
closing should be a cause for celebration. And since a portion of your purchase price is
paying for the agents and the escrow holder's expertise, utilize their services throughout
the process leading up to the day of closing. Ask questions; ask for an explanation of any
item you do not understand. Request copies of any documents you do not understand;
keep copies of all documents relating to the purchase of your home. And, if necessary,
seek advice from a qualified real estate attorney or tax advisor. Asking questions during
the purchase of your home will help insure that you and your family will enjoy your new
home for many years to come.
Chapter
RESEARCH METHODOLOGY
What is research?
Research can be defined as a scientific and systematic search for pertaining information
on a specific topic. We define research as the systematic design, collection, analysis and
reporting of data and findings relevant to a specific situation facing the company. The
main aim of research is to find out the truth which has not been discovering yet.
2.3 RESEARCH DESIGN:A survey research method was the basic research design. I interact with personally to
people through questionnaire filling method. Questionnaire is having questions regarding
the respondents basic information such as contact details, designation, what type of
information they want from real estate project developer and Government, what type of
documents they check while buying or searching property.
TYPE OF RESEARCH: - Exploratory and Descriptive.
Exploratory research is a type of research conducted because a problem has not been
clearly defined. Exploratory research helps in determine the best research design, data
collection method and selection of subjects. Given its fundamental nature, exploratory
research often concludes that a perceived problem does not actually exist. Its seeks to
find out how people get along in the setting under question, what meaning they give to
their actions, and what issues concern them. The goal is to learn what is going on here?
On the other hand Descriptive research is aimed to find the complete description about
an existing problem or phenomenon.
2.4 SAMPLING DESIGN:Study of the geographical area comprising of Delhi , Noida and Greater Noida .
It has tried to cover corporate offices of different industries in these regions.
Generally I met with the employees related to the top management of the companies.
The sample size consisting of 100 employees of these regions.
2.5 SOURCE OF DATA COLLECTTION:1. Primary data are collected through questionnaire and tele-call method which is design
to keep in view the objective of the study.
2. Secondary data is collected through internet sources, research papers, published reports
by various institutions and also from companies existing customers.
DATA PROCESSING:Daily data was entered into MS-Excel sheets. After the exhaustion of the specified
geographical area this data was analyzed using SPSS () graphical and tabulation
techniques. The data sheets mentioned here are attached in the annexure of the report.
2.6 LIMITATIONS OF THE STUDY:Un-availability of the desired personnel was the biggest constraint to this study.
Although appointments were made and followed up where possible but still there were
instances where the desired people were either unavailable or unwilling to meet.
No prior information regarding the addresses or other details of the offices to be visited
was provided, thus a few target persons were left uncovered.
This project is completed in six weeks, so due to time constraints it was not possible to
cover all the area of Delhi and NCR region and mainly Noida area was covered followed
by Delhi.
Some dealers were hesitating to give supportive data. Some of them ignored the
questions which were supposed to be filled by them. Thus affecting the scientific
accuracy.
Since the data is not evenly collected from the NCR region hence there is a chance of
biasness.
CHAPTER 3
DATA ANANLYSIS AND INTERPRETATION
Frequency
Percentage
Cumulative percentage
Private service
74
74
74
Govt. service
14
14
88
Business
12
12
100
TOTAL
100
100
100
During the survey I visited many Offices, Malls and Houses to meet with People who can
give me proper response of my questionnaire. I met with total 100 People out of which
14% people are/were doing Government services , 74% people are doing Private services
and 12% people are doing business. My target was to meet service class people because
they are educated and they are having capability of buying house or any experience of
buying house or any property.
met with people having different age. But generally I choose to met people having age
more than 35 years .Because they have bought house or they are in process of buying any
house. The people I have met most people belong to age group of 35 to 45 years and
having 61% and people belonging to age group 28 to 35 years having (least) 13%.People
are in age group 45-55 years or more years are having 26%.
Q: How much are you satisfied from real estate marketing information provided by
real estate companies?
Satisfaction
Frequency
Percentage
Cumulative percentage
Highly Satisfied
01
01
01
Satisfied
47
47
48
Neutral
38
38
86
Dis-satisfied
12
12
98
Highly dissatisfied
02
02
100
With the help of above pie chat and table it is clear that majority (47%) of people are
satisfied and very less proportion (1%) of people are highly-satisfied with the marketing
information provided by the real estate companies. Many people who are satisfied with
the marketing information provided by developer ,they were saying that Real estate
companies does not want to share each marketing detail but also some real estate
companies does not want to hide any marketing detail if customers asking about them.
38% people are neutral, 12 % people are dissatisfied and 2% people are strongly
dissatisfied from the marketing details provided by the real estate companies. The reason
of this strange result in simple languages is as followsBuilders do not give complete marketing information in their broacher.
Marketing information provided by real estate developers is condition based.
In the marketing information broacher, developers do not share the negative side of
project.
The paper work is a bit different from that of the actual work.
We can make most of the customers satisfied by
1. Creating awareness about all the marketing details.
2. By asking the developers to provide each (negative and positive) marketing detail
without any terms and conditions in their broacher.
3. By making the people aware of all the legal and technical documents which are needed
while going to buy a house.
FREQUENCY
41
33
16
PERCENTAGE
41
33
16
CUMULATIVE %
41
74
90
Tv and radio
Others
8
2
8
2
98
100
The above Table and chart shows that most of the people prefer Print media (41%) and
personal reference (33 %) for searching house or property. And other sources like Broker
and internet, TV & Radio, Outdoor advertisement are having 16%, 8% and 2 %
respectively.
Many people say that search of property through internet is very comfortable. Because in
a single click they can reach to a number of builders and their projects. They were saying
that mostly internet property web portal shows only marketing detail of projects but if
they will show legal and technical document of project so searching property through
internet become more beneficial. Some people say that print media is better way of
searching property because it is easily available at every where any time and also gives
information about current status of project with marketing details. Many people were
saying that buying or searching house or property through broker is not safe because of
their dual nature .Generally they are making hype of the developers project and hide
negative side of the project.
Q. Choose your preferable location and types of house you want to purchase?
Location
Noida
Greater noida
Delhi
Gurgaon
Frequency
41
37
18
4
Percentage
41
37
18
4
Cumulative %
41
78
96
100
Majority of the people preferred Noida as the location (41%), then comes the no. of
Greater Noida with 37%, Delhi with 18% and Gurgaon stands fourth with 4% . The
choice of area depends on the monitory condition and the facilities available to people at
a particular area.
Most of the people want 2 BHK in Noida area with price ranging from 20 to 25 lakhs.
the demand for 3 BHK is bit less and varies from 30-35 lakhs.
the demand for 1BHK is not much.
People want 4 BHK in the range of 40 to 50 lakhs.
there is not great demand of Penthouses and villas in Delhi and NCR region.
Most of the people who are doing job or having business who want to purchase 3 BHK
or 4 BHK prefer luxury house.
Q: Is there any need for any regulating body in the real estate?
In this question, majority of the people have a view that there is a need for some
regulatory body which can have a continuous eye on the real estate sector. Very less
people say the answer as No, and least no of people have No reply.
Frequency
76
20
04
Percentage
76%
20%
04%
Cumulative %
76%
96%
100%
Q: Do you think govt. takes necessary steps to provide house to the common man?
Response
yes
No
Cant say
Frequency
26
68
06
Percentage
26%
68%
06%
Cumulative %
26%
94%
100%
Majority said No when asked this question and comprised of 49.3% of the total
answers, 32% said yes and 18% didnt knew where to go .
CHAPTER 4
FINDINGS AND RECOMENDATIONS
MAJOR FINDINGS
Most of the people are dissatisfied from the real estate marketing information
provided by the real estate companies, but very few people are very strongly
satisfied.
82% people are checking legal status of construction while buying/ searching a
house.
Some of the people check delayed delivery penalty clause while buying a
property.
63% people want to check details of booking before buying or searching house.
Most of the people have chosen PRINT MEDIA & BROKERS as a source of
information while buying or searching for a property.
People who have chosen internet, print media, brokers, and personal reference as
a source of information for searching house or property are more satisfied
compare to the other sources of information.
There is great demand of 2, 3 BHK house in near future in DELHI and NCR
region.
Most of the people chose information related to the property documents as their
first preference compared to the marketing details of the project, past record of
builder and new policies of govt. related to real estate sector.
Most of the people wanted the government to make policies in terms of legal,
technical and financial aspects which could create transparency in real estate
sector.
Most of the people know only the names of few property documents and they
check only these documents while searching a property.
4. 2 RECOMMENDATIONS
On the basis of my findings, I want to make certain recommendations as follows
Recommendations to Earthcon Constructions Pvt. Ltd.
First and foremost, the database generated through the project should be put to
effective use through continuous follow-ups to the potential customers. A followup should be made on the industry potential as a whole as well.
Company should provide information according to peoples need and necessity.
And for that they can open daily polling on their web portal.
Company should not always try to attract the new customers only, but should also
take feedbacks from existing once, and try to remove their problems and learn
from their experience.
Company should make more contact with contractors and Architects to tap more
builders.
Recommendations to customer
Customers should check all the legal and technical documents and not only the
marketing details of the builders/project, before buying or searching house.
Customers should go through all the terms and conditions of the project
developed.
Customer should be aware of the governments policy related to Real Estate.
Recommendations to Project Developer (Builder)
Builders should show their legal and technical documents to the customers, to
make them satisfied because most of the customers want to check it and this also
helps in creating a unique identity of the developers.
4.3 CONCLUSION:Now a days people who go for buying a house have become more aware about what they
should look for and the information they should seek, and are more concerned about the
selection of the right type of house for them. But majority of the people are still unaware
of the documents which they should look for before going to buying a house. Here I have
collected the perception and analyzed the expectations of the general public as a whole.
The conclusion thus is that people need to be more aware of all the documents, the total
legalities, and collect as much as information from the builders, and then only they can
do their investment with a free mind. Thus because of the above reasons there is a need to
create awareness among the customers as well as project developers to give the
customers the complete information and the role of TRUSTED PROPERTY to educate
people is appreciated in this regard.
CHAPTER 5
BIBLIOGRAPHY
Referred Books:
Referred Websites:
www.4shared.com
www.earthcon.com
www.google.com
www.indianrealestateforum.com
www.indiatimes.com
www.studytemple.com
www.trustedproperty.org
(NOTE-All the information taken from you is only used for research purpose)
TOPIC-Understanding the Consumers Perception & Expectations while buying a
House.
Name
.
4) Do you think real estate developers give possession timely?
a) Yes b) No c) Cant Say
5) How much are you satisfied from real estate marketing information provided by real
estate companies?
a) Highly Satisfied b) Satisfied c) Neutral
d) Dissatisfied e) Highly dissatisfied
6) Do you think the govt. takes necessary steps to provide house to the common man?
L o cTaytpieon
a) Yes b) No c) Cant say
7) What source of information do you prefer while buying /searching for a property?
a) Print media b) T.V. and Radio c) Internet
d) Outdoor Add. e)Personal Reference f) Broker
8) Do you think real estate web portal bridges the information gap between real estate
developer and customer?
a) Yes b) No c) Cant Say
9) What all documents you should look for before buying a house?
11) What problems have you faced while dealing with the real Estate dealers?