Commission offered to home buyers, while it is alright to have some incentive for the loyal home buyer who recommends friends and family, exchange of a cash component, is not ethical as the referred home buyer will think that the amount should have actually been discounted with his home purchase
Word-of-mouth publicity and its by-product – referral marketing, may sound like the ideal methodology for the Indian real estate market. However, it could also be a double-edged sword. In cities, it’s quite preferable to live in a like-minded neighbourhood but it also brings into focus, the privacy concerns of home buyers. For developers, though it has the potential to be a great sales channel and brand driver.
Commission offered to home buyers, for referring other buyers because of the concept of friends and family living together or nearby, is firmly rooted in Indian traditions and history. It is not just a small town phenomenon but even expat Indians coming to metro cities like Hyderabad are rebuilding communities by populating buildings and neighbourhoods with extended families. Settling in the same building and creating a social bond, seems to be a win-win situation for all. However, this artificial creation of a neighbourhood is today, more than a social need for the home buyers.
Hence, the developers are leaving no stone unturned to make sure they create a social profile of their project, to attract buyers.
A friend’s endorsement goes a long way. They are going to believe their friends before they believe the broker. If their friend tells them it is a great project to live in and the social ambience is good, they are going to believe it. However, like with any other relationship, this ‘artificial neighbourhood’ needs to be nurtured carefully. Failing this, if one gets tempted by the developer’s offer to invite others for a price, it leads to bad blood with neighbours in the future.
