Tough times trigger new initiatives, banks emerge as one-stop shops. Welcome to the new improved home loan company that has just moved up the value chain and has included real estate consultancy in its portfolio.
Which real estate consultant offers you a choice of 6,000 homes in over 400 projects from more than 700 developers—and even offers to finance your real estate acquisition? Welcome to the new improved home loan company that has just moved up the value chain and has included real estate consultancy in its portfolio.
After testing the market for house-hunting services in an informal way over the past few years, market leader HDFC has now launched a full-fledged service—HDFC Real Estate Destination (RED)— to emerge as a one-stop shop for residential realty buyers. With the new service, the housing finance company takes over the responsibility of all your needs, right from offering a wide choice of properties to choose from and identifying the one that’s suitable for you, to completing the documentation for the deal and funding the acquisition. “The objective of HDFC RED is to help home buyers explore and identify the properties that are for sale,” says Renu Sud Karnad, managing director, HDFC.
Similarly, housing finance major ICICI Bank has also launched its Home Search division, to enhance its bouquet of services for the home buyer. Operating under ICICI’s residential property services division, the Home Search team goes a step further and offers its services for even rental deals. “Right from pre-sales services like identifying the home and the paperwork, to post-sales services like insurance and home-improvement loans, the housing finance companies are now offering everything under one roof. All that the home buyer needs is the cheque book and the ability to pay the EMI,” says an industry observer, adding that the easy to navigate and structured, transparent dissemination of information is a welcome change for home buyers who have to deal with the opaque and misleading ways of local real-estate agents.
Needless to say, a project recommended by the consultancy division of the housing finance company virtually comes with a pre-approved housing loan—not to mention the assurance of dealing with an above-board developer who has been vetted by the housing finance company before his project is recommended to the customers. “Right from price and location, to amenities and connectivity, every factor associated with home buying is dealt with, so that the customer can choose a home with full confidence,” says Karnad, adding that all HDFC RED customers are potential HDFC home loan customers and all customers who have not yet finalised a property are potential HDFC RED customers.
The housing finance companies are offering the scouting services absolutely free to the home buyer, with the expectation that the customer will take a home loan from them. Of course, they charge a fee to the developers for showcasing their property. “We are also working on special offerings for customers who avail of both the services,” says Karnad.
The new offerings by the home loan companies pose a threat not only for the friendly neighbourhood real estate agents, but also for other real estate portals. “When I am looking for a home, I trust the home finance company that is putting its money where its mouth is. If the choice of homes given by the finance companies is good enough—and that too without any brokerage—there’s no reason why I should go for a local broker,” says Adesh Mishra, who’s planning to invest in a 1BHK flat in one of Navi Mumbai’s upcoming nodes.
Taking a cue from the two leading private HFCs, some of the nationalised banks are also planning to launch value-addition initiatives. “We are working on a similar online offering and should make a formal announcement in a month,” says a senior official of a leading bank, who requested not to be identified.
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