How Human Dynamics Influence Real Estate Transactions

Purchasing real estate is a significant milestone in Indian culture, and as much as laws, regulations, numbers and logistics dominate real estate transactions, the reality is far more complex. We tend to value the personal touch in the end-to-end process of such a significant transaction. The highly valued sense of community and building relationships bleeds into this aspect of our lives, influencing decisions and potentially impacting outcomes.

Real Estate transactions in general are highly relationship based. In India especially, the well-ingrained culture of building community and relationships bleeds into high value transactions. These characteristics are especially important in commercial real estate transactions because of the livelihood of several individuals on a large and complex hierarchy.?

Emotional Factors

That being said, commercial property often holds strong emotional ties for buyers and owners. Their business is not only their property, but also like a child that they have nurtured. Understanding these attachments and navigating sensitive issues related to displacement or redevelopment requires empathy and cultural awareness. In a society where trust is paramount, forging genuine connections with developers, brokers, and legal teams becomes an art form. Years of cultivating rapport, honouring personal connections, and building a reputation for integrity become the key that opens doors and seals deals.?

Beyond the purely financial considerations, the Indian commercial real estate market is deeply intertwined with the fabric of family and community. Businesses often hold deep emotional significance and are passed down through generations as a tangible thread of legacy. Understanding these familial ties and navigating sensitive issues related to displacement or redevelopment demand empathy and cultural awareness. Respecting ancestral connections and finding creative solutions that honour tradition can pave the way for mutually beneficial outcomes.?

Negotiation and Haggling.

Indians are well known for their negotiation skills. It is often a delicate dance between the trio of patience, persistence, and charm. Limited availability of real estate further creates an urgency to make a sale and make a purchase at the same time and the most effective negotiator prevails. A good deal between a broker and a buyer could foster a relationship between them for life, based on referrals, trust and loyalty based on service stability.?

Risk Aversion

Indian investors can be risk-averse, particularly when dealing with large sums of money. Demonstrating stability, strong track records, and transparent communication can help mitigate concerns and win trust. Because of this risk-averse nature, the largely religious culture plays a very important role in high value transactions. Dates, numbers on addresses, and even the design of a building can be chosen based on their perceived auspiciousness, adding another layer of complexity to negotiations.?

FOMO

But, beneath the surface of logic and tradition, even the fear of missing out on a golden opportunity can influence decisions in unexpected ways. A prime location overlooking the city skyline, even if marginally less profitable, might hold greater appeal due to its symbolic value of prestige and luxury. Owning a coveted address in a bustling business district, overlooking the city skyline, or nestled within a renowned business park carries more weight than mere square footage.?

Final Thoughts

The Human Factor in real estate transactions is much more than cold, hard numbers, cap rates, lease terms, and square footage. In real estate transactions, a handshake carries the weight of generations-old family ties, a cup of chai fosters unspoken understandings, and the auspiciousness of a date can swing a multi-crore-rupee deal. This is where the numbers cease to be mere figures on a page and transform into potent symbols of status, security, and even family pride.?