Mumbai homebuyers can exchange old apartments for bigger units this festive season

In return, homebuyers will have to upgrade and purchase a new apartment from developers participating in the exhibition.

How does the model work? 

According to Zapkey, it has launched a home upgrade programme wherein it guarantees the sale of the existing apartment at a fair market price and helps the seller to upgrade to a new home of his or her choice.

"We have tied up with CREDAI-MCHI for the exhibition as their exclusive home upgrade partner, considering it is the biggest exhibition which takes place once annually. We guarantee sellers that we will undertake the sale of their old home in 90 days and pay an upfront token at a fair market price. If we are unable to sell in 90 days, then we may buy the property or our token stands forfeited," Zapkey co-founder Sandeep Reddy said.

"We will pay Rs 1 lakh as token amount to sellers for properties having a valuation of more than Rs 1 crore and Rs 50,000 as a token amount for properties having valuation lesser than Rs 1 crore. Also, we set a valuation and provide a guarantee of selling it after physically visiting the property. We prefer not to take up property older than 20 years, but in some cases if the building is in good condition and there is demand, we may take it up."

Zapkey will also charge a 2 percent brokerage on the sale of old property and the same amount on the sale of a new property.

What if the 90-day deadline is not met? 

In case Zapkey fails to meet the deadline to sell the old apartment within 90 days, the token amount given by it to the home seller will stand forfeited. Zapkey may even consider purchasing the apartment, depending on the deal.

Zapkey says that if the homebuyer decides to not go ahead with the purchase, the developer may forfeit the token given by the buyer.

The money involved here in the form of token amount will be of Zapkey, and the home buyer or seller will not lose any money, according to the prop tech firm.

In terms of documentation, each party, including homebuyer, developer and Zapkey, wlil sign a separate agreement with one another.

What are the other offers? 

According to the CREDAI-MCHI, over 100 leading developers from the Mumbai Metropolitan Region (MMR) will participate in the exhibition. Homebuyers and investors will have the opportunity to purchase properties from more than 50,000 units displayed from over 500 projects.

The exhibition will also feature pre-COVID festive offers like a complete stamp duty waiver, zero Goods and Services Tax and bookings at as low a price as Rs 21,000.

"The four-day exhibition will provide an opportunity for developers, homebuyers and financial institutions to come under one roof and ease the homebuying process,” Boman Irani, president of CREDAI-MCHI, said.

Developers will have several festive season offers like ₹ 10 lakh off on-spot booking, sports utility vehicles, stamp duty waiver, free luxury interiors and GST waiver.

Also read: Real estate developers dole out cash discounts, freebies, bikes this festive season

“This year, we are also giving a unique offer of home exchange where those who want to upgrade their homes will get a guarantee that their home will be sold by our exclusive partner Zapkey," Irani added.

In return, they would have to purchase a new home from the participating developers at the exhibition, he said.

"This is open to all developers, but around 10-12 participating developers are exclusively inviting their potential buyers to the property show to ease the home buyer's burden of selling their old homes," Irani said.

As an organiser, CREDAI-MCHI wanted to provide a unique experience of home exchange by offering a smooth and transparent ecosystem for homebuyers looking for a lifestyle upgrade by selling their existing homes without any hassles and complications, he said.

Also read: Over 8,600 property sale registrations in Mumbai; State government’s revenue collection up by 39% YoY

Keval Valambhia, Chief Operating Officer (COO) of CREDAI-MCHI, said, "The COVID-19 pandemic forced a two-year break on the much-anticipated property festival of CREDAI-MCHI, which is now in its 30th edition. So this time, we turned this exhibition into a mega confluence of all stakeholders of MMR. We have strategically selected the dates for the exhibition considering it is festival time and there are going to be festive offers by developers at the exhibition."

Also read: Hike in repo rate by RBI may impact real estate demand this festive season

Home exchange or home upgrade 

In 2020, a few months after the Covid-19 pandemic hit India, close to half-a-dozen developers in Delhi-National Capital Region (NCR) region launched a property swap.

The scheme was open to individuals who had bought a property worth Rs 50 lakh and paid the developer Rs 15 lakh at the time of the purchase but had been waiting for more than 10 years to receive possession.

The Rs 15 lakh paid to the old developer got adjusted against the new ready-to-move-in property the customer bought from a new developer, who is part of the swap scheme. The new developer got to book a sale, which meant fresh cash flow. The previous developer gets to buy back its unit, which can be completed and sold at a higher price later.

Zapkey has been marketing itself as India’s first home sale guarantee platform. In an emailed reply to queries from Moneycontrol, Zapkey said it launched the home upgrade programme recently and had been promoting it for over six months now.