Two years ago, Ivy League graduate Priya Maheshwari re-located from the Bay Area, California, to Bangalore. One of the first things she had on her mind was to buy a house. However, there were only listing sites such as MagicBricks and 99Acres or marketing sites such as IndiaProperty and PropTiger to aid her. But listing sites are mere classifieds with no transaction assistance or buyer assurance and act as a playground for unscrupulous brokers, while marketing sites are extension of the builder’s sales and marketing department keen on hard-selling any property to earn commission.
Luckily for Priya, she met a few IIM alumni – Guruprasad Bangle, Umesh Rangasamy and Naveen Galithoti – and together they launched Properji, to inject trust, transparency and professionalism into property transactions in India.
All of them agreed that lack of transparency and professionalism in the property market was a big problem. “Our unique model involves religiously safeguarding the interest of the buyer, providing fact-based research and handholding from identifying the property to final closing and beyond,” says Priya.
The startup was launched in August 2013 and has become a hit with Bangalore’s first-time home buyers. “One of the differentiating aspects of our site is that we openly disclose a unique Properji score for properties and builders based on objective analysis of factors such as location, appreciation potential, quality, legal clearance and builder’s execution capability so that buyers can make apples-to-apples comparison,” says Umesh.
Properji’s team of advisors inform and educate customers as opposed to usual selling. Its customer base primarily consists of professionals in the 30 to 40 age group. “Close to 15% of our customers are women,” says Naveen.
For a small fixed fee, they provide fraud risk coverage up to Rs. 1 crore per transaction and legal and tax advice to make sound home-buying decision, along with a buyback guarantee to enable buyers to liquidate their investment whenever they want.
So far the startup has amassed 500 sign-ups and sold properties worth Rs. 19 crore in volume.
Convincing builders was a big challenge
The journey has not been without challenges. “At first we dabbled in several projects but learnt the hard way to bring a focused approach which involved selecting projects with high potential and targeting specific set of customers,” adds Naveen.
“Initially, Properji was highly unpopular with the builder community and they blacklisted us. But over time, builders have not only accepted us but are also pro-actively sharing information to enable us to rate them better,” says Umesh.
A quick look at Indian real estate market
Real estate contributes 5% to India’s gross domestic product (GDP) and is the second largest employer after agriculture, with total revenues of over US$ 66 billion. Yet, it is a highly fragmented industry with severe lack of trust and accountability. With rising consumerism and younger demographics this industry is set to grow. As awareness is high in new buyers, they are forcing this predominantly unorganized sector to change into a more structured industry and demanding fact-based research and transparent dealing.
According to McKinsey’s report on India’s urbanization, more than 10 million people are moving into cities each year, while Cushman and Wakefield report than more than 200,000 housing units were launched last year in the top eight Indian cities.