Disputes between byers and developers are an inevitable occurrence sometimes, but there are ways to reduce it happening.
The AFR published an article by property journalist Michael Bleby at the weekend talking about the significant rise in disputes between buyers and developers. The article says that with an approximate 44,784 apartments due for completion on settlement this year this increase in disputes is likely to keep growing, particularly so because apartment values appear to be going backwards.
We at Bergent believe that a significant part of the problem, when there are no fundamental differences between what developers sell and what they deliver, is that developers and their marketeers stop pushing the benefits of the property after the buyer has signed on the dotted line. The sale, and therefore the selling, is not complete until the full amount is in the bank.
The key to reducing disputes and buyers reneging is to continue seducing them with ongoing communication about what a great decision they made. This is especially so for communication that reinforces the main drivers of value for the buyer.
The HumanTruth™ of property is that the largest part of value lies not in what the buyer pays but in their:
- perception of the quality of the environment and built form, not the real quality but their perception of the quality
- assessment of the ego boost or bragging rights they will get from their family and friends
Ongoing communication to people who have paid a deposit should reinforce:
- how well the build is going
- how pre-sales have rocketed ahead
- house sales in comparable buildings have been spectacular and resulted in price rises
- a sense of growing community in the area
- value of infrastructure improvement in the surrounding area
- how much care and effort the developer is putting into delivering the final product
- developer staff accomplishments, degrees and awards
- (for non-tower developments) how happy new and existing owners are in the development
The aim is to give all buyers effective tools with which to reduce their cognitive dissonance or post- purchase wobbles. Evidence clearly shows that even when there are no concrete examples to provide buyers, general feel-good pieces about smiling contractors, concrete pours, happy new buyers, all work to reinforce the idea of a smart decision.
This builds buyers' enthusiasm and so commitment as they get closer to settlement. Reducing buyer remorse is the key to ensuring final sale and reduce ongoing problems. Keep up the communication.