Group Buying: The new gamechanger in real estate
By Louisa Afriyie Afrane Okese
With Ghana on its way to economic resurgence, exploring different options to reach your life’s goals are highly critical to the finances of individuals looking to be home-owners. It is even more crucial, with increasing inflation on various goods, for individuals with a dream to own a home to explore the option of group buying.
Group buying is an exciting new trend gathering attention from stakeholders in the real estate market across the globe. Uncommon to the Ghanaian society, this may well be the ticket owning your dream home. The idea is to have a group of like-minded friends or family, with a mutual goal of owning a home, to pool their resources together. These days, group buying has become worthwhile for home buyers looking forward to getting significant discounts. It is about time Ghanaians explored that option.
Group buying offers the opportunity to approach real estate developers either directly or through an agent to negotiate prices, land sizes, home spaces, discounts, among others, which would otherwise be impossible for individual home buyers to achieve. This new trend has worked well since it ignited, and it is spreading like wildfire. It is seen as a win-win proposition.
The two biggest parts of the entire process is the desire of the home buyers and the negotiation. Once potential home buyers are set, they may connect through a third-party agent or a brokerage company and form a group. The company then goes to the developer with orders and negotiates for possible discounts. The developer, sensing a ready market to sell some properties, would agree to the discount or propose one. Normally, there is negotiation on discount which is higher than what is offered on individual purchase basis.
For buyers, instead of waiting for offers, would look to grow the buyers group size to build cumulative bargaining power. This presents a rich market size to negotiate better discount rates or price drops.
For developers, a ready market to sell many properties without spending anything on customer acquisition, advertising and marketing in general, is a dream and a gamechanger as they get to reduce the cost of selling. These savings on brand marketing can be transferred onto the home buyers as extra discount. It makes absolute sense to negotiate with groups of buyers and strike a deal that brings in substantial amounts of much-needed liquidity immediately than approaching single potential buyers at huge, committed marketing expenses. It affords developers the chance to sell faster and invest into other real estate immediately.
For majority of Ghanaians, real estate is the most expensive purchase they will ever make and payment options such as homes loans and mortgages are still misunderstood. Hence, the individual’s reluctance to find suitable options to buy a home. Even so when the economy is quite volatile under the circumstances. Before jump straight into a group purchase, make sure you understand the terms and intricacies of the negotiations and discounts.
Louisa Afriyie Afrane Okese, Business, real Estate and Lifestyle Expert