What does the term group buying in real estate mean? 

What does the term group buying in real estate mean? 

Real-Estate Industry | Dec 2, 2022 | 10 min read

Most of us have the misconception that purchasing a house is a challenging endeavour and requires making a significant financial commitment all at once. The thought of acquiring a home loan and, more importantly, being responsible for its repayment may seem quite daunting. However, group buying has emerged as a practical alternative for buyers wishing to purchase homes and get alluring price reductions in the real estate market. 

Our goal with this article is to educate you about the concept of group buying in the real estate market, including the advantages for both buyers and developers. 

What is group buying? 

Group buying in the real estate market involves forming a group of prospective home buyers interested in purchasing a house inside the same development. This group then contacts the developer with an offer to acquire the home. A certain threshold of potential buyers must exist before a group buying may be considered.  

The idea of group buying in the Indian real estate market is novel. Buyers may save up to 25% by purchasing in groups, making this tactic a smart choice when investing in real estate. A plethora of online portals and websites now allow clients in India to participate in group buying. 

How does group buying work? 

Group buying often involves a third party that acts as a middleman between the purchasers and the developer. Initially, a platform is provided where interested homebuyers may meet one other. A group buying firm will often offer a forum or meeting place to bring together the various purchasers. The purchasers will then band together to establish a group.  

The business goes to the constructor with a limited number of orders in hand and negotiates for potential price reductions on behalf of the purchasers. There is an opening for the builder to sell many homes. As a result, a predetermined discount is settled upon, which is often larger than case-by-case discounts. 

Discounts for group buying vary according to the project’s location and development phase. Due to the uncertainty of future sales, developers often offer steep discounts early in the development process of a real estate project when they are eager to move as many units as possible. 

Similarly, suppose the project’s completion date is drawing close, and the developer is eager to sell any remaining apartments. In that case, the price of those units will drop significantly to attract purchasers. The property purchasers would have to pay a fee to the registration firm. The fee might be anything from 1% down to 0.5%. 

Advantages of group buying  

This strategy has the potential to be beneficial not just for developers who need more funds but also for purchasers who are on the fence about making a purchase.  

  • For the home buyers  

When purchasing a home, prospective buyers cannot utilise their power to negotiate a big price reduction with the real estate developers. Individuals need strong negotiating power to get a contract with a rebate, but if they create a group, they may boost their bargaining power and increase their chances of success. 

A home loan, legal fees, and other costs associated with closing the deal are all things that members of a buying group might split among themselves. Since banks are eager to do business with large groups of people, obtaining a loan from one is simple and often advantageous. In most cases, purchasers are eligible for reductions or waivers of certain fees, such as the processing cost, the interest rate, the search fee, and the valuation fee. 

  • For developers  

When purchasing as a group, the down payment is often larger, giving the builder access to much-needed funds at the project’s outset. In the current Indian real estate market, when lending rates are rising, a large down payment might be a breath of fresh air for developers. 

The reduction in selling costs that results from collective purchasing is something that developers very much appreciate. Because the developers do not have to spend as much money on marketing and new client acquisition, the selling cost is decreased. The home buyer may be eligible for discounts based on savings. 

Group buying allows developers to move more units in a shorter time. As a result, it allows them to focus more on upcoming initiatives. 


It doesn’t matter what kind of house you want to live in; the goal is to discover an ideal bargain. In a market where real estate developers have a dominant position; the negotiating power of an individual home buyer is often limited. Therefore, individual buyers have an improved chance of finding a decent bargain and an ideal house if they get together and participate in group buying. 

HomeCapital could help you out if you’ve already decided to become a home owner but are in the midst of accumulating the initial down payment amount, stamp duty, possession payments or any other payments to developers. HomeCapital’s innovative business concept leverages the strengths of its financial, technological, and real estate industry partners to provide its consumers with access to an interest-free down payment assistance program.  

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