From Chandigarh Tribune dated 26 March 2011
Most real estate developers in the region are now launching 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.
Sources say that that this practice ensures that by the time the real estate developer formally launches the project, prices rise 20-30 per cent. Since most often, it is the dealers themselves who have picked up the property in the ‘pre-launch’ phase, 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 wash their hands off the dealers.
By creating this 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 companies who have launched their projects in Mohali, Ludhiana, Amritsar and Panchkula have taken this ‘dealer’ route to ensure complete success of their project.
A similar scheme has come up on the fringes of the northern sectors in Chandigarh. Though this project, by the leading real estate developer in the country, is yet to be launched, it has already helped generate hundreds of crores - all accounted for-from investors wanting to get a plot here. Investors are being lured by dealers on promises of assured allotment, in case they make a down payment ( Rs 94 lakh to Rs 1.25 crore for 350 sq yard and 500 sq yard plots) within 45 days. This, when nobody knows the criteria for allotment.
“There is urgent need to have some kind of regulation on the way these builders are creating an artificial boom. Property rates are hiked by these dealers and the customer fails to get a decent accommodation as the rates are beyond their reach,” said a Chandigarh-based real estate agent.
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