In today’s video we have tried to cover the topic on Token System. What is Token System? And on what ground should it be avoided.
What is Token System?
The builder comes up with a conceptual project and tries to evaluate the pulse of the market by announcing the soft launch whereby an Expression of Interest (EOI) is taken from the buyers.
When should it be avoided and under what circumstance?
Buyers need to understand that if the builder is of good repute with a strong legacy and has a fair market share and presence after doing all your research then it is okay to go ahead with the Token System but on the other hand there are certain builder who discreetly uses the trust of the buyers by making them pawns to understand what the market wants and on that basis will make necessary changes on the project once RERA is announced. In this circumstances the builder creates a sense of urgency by giving lucrative spot offers which is very hard to resist as buyers will try to evaluate the project on the basis of existing projects which are tangible.
What happens next?
At the allotment day the builder will call all the prospective buyers to create a herd selling mentality whereby under pressure some buyers land up compromising with their choice of unit and floor rise as this is a marketing strategy of the builders to sell in bulk
So what is the remedy?
Once the EOI is given the buyers need to thoroughly understand his requirements first and on that basis explore the pros and cons of the location, the legacy of the builder and finally the project. If majority of his requirements are being met then he can proceed with the allotment if not then he must withdraw his token amount because once he proceeds with the allotment then the chances of exiting becomes nil and his amount gets forfeited.