Stick to RERA-registered brokers, preferably the tech-savvy kind, and look for deep knowledge of the micro-market you are interested in
Buying or selling real estate is among the biggest transactions you are likely to conduct in your lifetime. Hiring a skilled and ethical professional who can guide you through the sometimes long-drawn process can make your experience more pleasant.
Pay for professional advice
A survey conducted by BASIC Home Loan some time ago had found that half the people still trust their friends and family for primary advice while purchasing a house, instead of relying on information provided by brokers. However, family and friends can’t be a substitute for a skilled, full-time professional. Says Atul Monga, co-founder and chief executive officer (CEO), BASIC Home Loan: “As a society, we are reluctant to pay for professional advice. However, a local real estate expert will always provide wider choices, possess sharper know-how on the minor details of a property, and negotiate the price more skilfully.”
Taking a property agent’s assistance can reduce the time and effort required to find the right property. A good broker should assess the client’s needs and preferences and produce a list of options that fall within the budget. The broker should arrange visits to the site or property, and organise meetings between prospective owners and buyers or tenants.
The broker should also negotiate on the client’s behalf to ensure the latter gets a good deal. Other services include drafting the agreement, getting the property registered in the buyer’s name, or getting the rent agreement registered.
Look for knowledge of the micro-market
Most people select a real estate broker based on references from family or friends. While this approach is not wrong, it can be fine-tuned further. Says Vasant Singh, director, Property Gallery, a South Delhi-based real estate consultant: “Explore the realty portals and find out which brokers have the highest number of unique listings in the locality of your choice.”
Once you have prepared a list of such brokers, meet them personally. “Get a sense of the broker’s understanding about the locality, real estate in general, and legal procedures. Go with one who is confident and precise.”
Stick to RERA (Real Estate Regulatory Authority)-registered brokers. Says Pradeep Mishra, founder, Homents Pvt Ltd, “Gauge the broker’s knowledge about projects and developers in that micro-market.
Only if he is well connected and experienced will he be able to show you enough options, guide you, and get you the best price.”
The broker must also possess a few additional attributes. Says Sajid, vice president-residential properties, Silverline Realty, a Bengaluru-based real estate consultancy: “He should be available when your schedule permits. He should be technologically savvy and up-to-date on market trends. Most importantly, you should connect well with him.”
How much should you pay
Brokers’ fees vary from one city to another. They also depend on skill and reputation. Usually, they range between 1 and 2 per cent, plus applicable taxes. For property rental, the norm is one month’s rental, plus GST (goods and services tax).
Watch out for fraudulent practices
Be on guard against misrepresentations about key aspects of the property. Homents’ Mishra warns against falling for advertisements for plots selling for, say, Rs 2 lakh. “If you go for such dirt cheap and unrealistic prices, you may find that the plot is agricultural land, unauthorised for commercial use,” he says.
Another fraud is where the broker lists a price way below the market price. For instance, if a property is up for sale for Rs 1 crore across all property platforms, one broker may list it for Rs 90 lakh. Some clients get lured in by the low price and go for a site visit with the broker. Later, on discovering the actual price, they may dump this broker and go with another. Even if final deal is done through another broker, the first broker still gets a share of the commission from the second one for having brought in the client initially. Always be sceptical of brokers who quote unrealistically low prices.
Five questions to ask when hiring a broker
- Ask the broker about his experience – his knowledge of the area and the type of property you are interested in
- Quiz him on his database of projects, and the developers he works with
- Ask for a list of recent clients and call them up
- Check whether the broker is registered with pan-India associations of brokers; such brokers are less likely to be fly-by-night operators
- Getting a property with a clear title is crucial, so quiz the broker to find if he has enough knowledge to avoid those pitfalls