Real Estate Brokerage Industry in India

Published: August 28, 2008
  • Indian real estate brokerage sector is unorganized

Visit any developing city like Gurgaon, you’ll see boards of “Property Consultants” hung on every nook and corner of the city. Majority of these brokers don’t have any notion of work ethics or quality of service. They don’t have any reliable brand, neither do they value long term reputation in the market. Of course, there are exceptions, and some people do provide a worthwhile brokerage service to the consumers. But on the whole, Indian real estate brokerage sector is mostly made up of thousands of such mom-n-pop brokers, who setup a shop when times are good, and vanish in the thin air when economic downturn sets in, just like today. There are bills getting introduced to bring in structure and transparency in the sector, but they’re not yet nationwide.

  • No apex controlling body

India doesn’t have any apex governing body parallel to MLS or NAR. Because of this, very few sellers are habitual to creating an exclusive listing agreement with a broker. This results in a dogfight among the brokers to sell the same property, making it hard to maintain high business ethics. Because there is no exclusivity, brokers aren’t generally ready to give particular details of a property (such as exact address) to other brokers, or even buyers, unless they are ready to personally visit the place. This makes it hard for the buyers to research about their intended home purchase very tough.

  • Transactions in cash

A lot of sellers in India, want some chunk of the property transaction receivables in cash, for the simple reason of income tax, popularly known as ‘Black money’ and ‘White money’ here. This makes the job a little difficult for the buyer, obviously because he can’t apply for home loan for the full amount, but only the amount that is declared in white. This makes the resale transactions still more complicated.

  • Complications in property registration

Property registration in India is not so smooth process. There are many properties that are not at all registered, and they get sold on the basis of ‘Power of Attorney’. The registration cost is approximately 10% of the property cost, which is pretty high (Compare India and US for example). We have seen some cases, where everything else was finalized in a deal, but the deal couldn’t go through because of registration cost.

The bottom-line is…it’s tough to carry out a resale property transaction in India!

Now what we intend to do, as a professional real estate brokers to solve these problems –

1. Be committed to long term gains – No two ways about it. One needs to sacrifice on short term monetary gains to establish a trusted brand in the long term. We are prepared to do that.

2. Work only with reliable business partners – We’ll need to be very careful about whom we work with, and make sure that they can be trusted in the long term.

3. Keep your word – The broker community in India is especially notorious about not keeping their word, and taking poor consumer for a ride. We don’t want to do that. We know that word of mouth from a close friend is more powerful than any other state of the art marketing technique!

Hoping that we’ll be able to provide the best in class services to our customers, and change their perception about real estate brokerage business!

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About Zamanzar

Zamanzar Advisory Pvt. Ltd. is a real estate advisory firm located in New Delhi, India. We offer online property search tools and offline services to help complete the transaction. Our services cater to real estate buyers, renters, and sellers. Visit Zamanzar to find out more!

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