Bulk Rates Get Better Deals In Real Estate

Nitin Degaonkar has launced a combined buying approach to avail of bulk rebates on property

Published: Sep 7, 2012 06:17:16 AM IST
Updated: Sep 3, 2012 11:21:14 AM IST
Bulk Rates Get Better Deals In Real Estate
Image: Abhijit Patil for Forbes India
THE DEAL Nitin Degaonkarís initiative will go a long way towards making homes aff ordable in big cities

If buyers can come together to get bulk discounts on expensive cars or trips abroad, why don’t they use the same principle while buying their own house?

This is a question Nitin Degaonkar asks anybody who wants to buy a flat in big cities where real estate has become unaffordable. Individual buyers, he feels, neither have the time nor the information to grab the best deals within their budget. This makes them sitting ducks for developers who operate in a cartel. It is to bypass this nexus that Degaonkar set up the Home Buyers Combine.

Over the past few years, the turmoil in the global economy has brought bad tidings for realtors. Yet, they are scared to lower prices as they feel that it will reduce the profit of their businesses as well as of the early-stage investors who financed them. Degaonkar feels a combined buying approach will help both the buyers as well as developers as early-stage investing and marketing costs will be taken care of. “With combined buying, buyers get a discount of around 15 percent and developers can reduce dependence on PE firms and high networth individuals who invest in the projects and need a fixed rate of return,” he says.

The idea of the Home Buyers Combine came as an epiphany to Degaonkar. In 2010, he was working as a project manager at Infosys Technologies in Pune where he was handling a team of around 800. He noticed that almost half of the salary of his young teammates was going towards paying EMIs. He realised that most of the buyers did not have a say on the price at which they bought their flats. That’s when he started to convince the locals in Hinjewadi to be part of his plan. Soon, he  gathered 160 people and placed an advertisement in a national daily. The ad drew the attention of five developers. Degaonkar zeroed in on Vilas Javdekar Ecohomes, a well-known developer from Pune, and started the Yashwin project in which the buyers paid an advance of Rs 10 crore against the total project cost of Rs 60 crore. When they ended up with a 15 percent discount on the market price, Degaonkar knew his idea held tremendous potential. He floated his firm in January 2011 and, in about a year and a half, it has about 12,000 members.

In his first project, he went through the process of searching for an appropriate plot and built the property from scratch. In the others, he approached developers with ready apartments and got bulk discounts of around 15 percent. Degaonkar, who charges a fee of 3 percent of the total price after going professional, feels his idea is being used by many brokers and portals. “But, unlike them, Home Buyers Combine doesn’t tie up with any developer or broker. We only cater to the interest of the buyer,” he says. Till date, Degaonkar has worked on five projects in Pune. Now, he plans to move to Bangalore, Mumbai, Chennai, NCR, Ahmedabad and Hyderabad—in that order. Today, around 2.5 lakh houses are sold in top cities every year. Degaonkar expects this number to touch 4 lakh in five years. By then, he hopes, his revenue would touch Rs 350 crore.

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(This story appears in the 14 September, 2012 issue of Forbes India. To visit our Archives, click here.)

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  • Hbc

    The real feedback from those who reaped benefits will tell real story. http://www.homebuyerscombine.com/home-buyers-say.php

    on Oct 27, 2014
  • B. Samaraju

    Nitin ... sorry, Anand - I stand corrected. Group booking was done 2 years 4 months back and when I have mentioned the 10 crores paid to the builder, it is clear which project is being referred to. Refute, if you can, that this project has seen the light of the day, as also the Bavdhan project. Basically, except for the Palash project at a price of Rs. 3050 as against market price of Rs. 3400 (NOT 3750) was the only success, and that too because the Vilas Javdekar, the builder was sincere enough to offer this to the investors. Other than that, there is no concrete success to show on the ground and it is best to stay away from this if you are in need to immediate accommodation. My recommendation would still be to stick it out individually with reputed builders.

    on Sep 13, 2012
    • Pravin

      Dear Somaraju, This is Pravin here. I am the author of this story. Since you have some interesting observations about Home Buyers Combine I would like to talk to you. Please send me your contact details. My email id is pravin.palande@network18online.com

      on Sep 13, 2012
  • Anonymous

    brillant piece of information, I had come to know about your web-page from my friend hardkik, chennai,i have read atleast 9 posts of yours by now, and let me tell you, your webpage gives the best and the most interesting information. This is just the kind of information that i had been looking for, i'm already your rss reader now and i would regularly watch out for the new posts, once again hats off to you! Thanx a million once again.

    on Sep 13, 2012
  • Dd

    Anand, are you really Anand or its Nitin writing here? It may be a case that Samaraju is not real name and he is trying to hide the real name to save himself from this fraud called Nitin. All other things written by Samaraju are facts. And it is the case with almost every such project where buyers have signed an MOU with builder through Nitin. I am part of one such project in Bavdhan, Pune where more than 60 buyers had put their money between 6 and 7 Lakh each 1.5 years back and the project is yet to kick off. Location has changed once in this duration and flat layouts have been changed thrice. General advice to everyone being lured by Nitin through this article would be to stay away from such gimmicks and check the credential of this man by independently talking to the people and know their experience who have invested money in past and are still waiting for the projects to start.

    on Sep 9, 2012
  • B. Samaraju

    To give a perspective, I have been a member of Home Buyers Combine and the first project of Nitin with Vilas Javdekar Ecohomes has still not taken off almost 3 years after all the members paid 10 crores to the builder. I guess this side of the story should also be carried through the comments. This fact is verifiable by calling Vilas Javdekar office through the numbers listed on their website.

    on Sep 8, 2012
    • Anand

      Name Samaraju sounds unfamiliar name in the list of buyers of the first project. Looks like someone spreading myth as there was no group booking done 3 years back... I have been part of the project and I was given the option to take a unit in Palash 2e (photo of building is seen in this article). The price of Rs.3050 as against 3750 in market was a fantastic opportunity and many more like me are beneficiaries of the offer.

      on Sep 8, 2012
      • B Samaraju

        Nitin ... sorry, Anand a you are right, there was no Group Booking done "3 years back" it was done 2 years 4 months back (May 2010 to be precise). But clearly, as you understand, this difference of 8 months in the timelines is not the point of contention. When I have referred to the 10 crores (paid by the group) to the builder€BAD+9D2C it is clear which project was being referred to in my original comment and therefore your response of '€œLooks like someone spreading myth as there was no group booking done 3 years back...'€ is a case of having convenient memory. Now, I will state a fact "neither has this project (which was your first project) nor has the Bavdhan project has seen the light of the day. Would you disagree with this fact? You would not dare to, because this is verifiable by calling the office of the builder,€“ Vilas Javdekar Ecohomes. And yet, there is a constant mention of these projects as HBC's successes. Yes, I agree that Palash project was offered at a price of Rs. 3050 as against market price of Rs. 3450 (at that time, market price was not Rs. 3750 as stated in your comment above). This should be counted as a success, and I would equally attribute this to the builder Vilas Javdekar, who was sincere enough to offer this to the investors (my opinion anyway). Other than that, there is no concrete '€˜delivered' success for HBC to show on the ground. In that sense and to that extent, this and other articles around HBC have been misleading and the coverage is a poor substitute for paid advertisement. My advice to first time home buyers is that it is best to stay away from HBC. A better approach would be to look at projects with reputed builders and book a house with them directly.

        on Sep 14, 2012