From employing MBAs and other specialists to operating from swanky offices to actually diversifying from their core area to turning realty developers, brokerage firms are a far cry from what they were in the past
With property business booming across major cities in India, a number of property brokers — buoyed by the increase of their business manifold both in terms of the deal value and the number of transactions — are turning builders.
Many of them like PropTiger, ATN, Investors Clinic and others, backed by huge savings from their booming business have the huge advantage of a ground-level understanding of what home buyers want as well as of the issues faced by developers.
In Delhi-NCR only, there are more than 20 major brokerage houses — both small and medium in size — that have turned into full-time developers.
The usual modus operandi is that they float a separate company for the real estate venture and continuing at the same time with the brokerage business, and typically, many of them opting for smaller projects in relatively cheaper locations to get into the capital-intensive business while others are entering into joint development pacts with landlords or developers as well.
But that is just one of the changes marking the brokerage business.
Brokering experts believe that gone are the days when the realty sector was at a cusp when it was redefining the standards by ushering in the best of global practices across all asset classes. The change was not restricted to the transition from the brick and mortar buildings that had dotted the Indian landscape since independence to the steel and glass towers, equipped with high speed elevators and modern gadgets of safety and comfort.
Now, real estate brokerage firms are a far cry from their unorganised selves to the professional, dynamic and organised sector with swanky offices that they are now, hiring staff — even MBAs to run the operations, to running hi-tech call centres, etc.
The last decade has been witness to much transformation in the country’s economic scenario, triggered by the economic liberalisation and wherein the real estate sector had undoubtedly emerged as a new sunshine sector, catering to the increasing needs of the international entrants mainly in the IT/ITeS, banking, financial services and insurance industries.
Investors Clinic (IC) among others has played a significant role in bringing about this change. IC took the lead in practically transforming the face of the real estate brokerage industry in India by bringing in professionalism in this sector.
WHAT BROKERING FIRMS SAY
“We chose to play the role of strategic adviser to both, real estate developers and buyers. We emerged as one of north India’s leading real estate advisory and portfolio management firms. Indeed, that paved the path for more real estate brokerage firms to align themselves to the model, which is just as well for the industry at large,” says Honey Katiyal, CEO, Investors Clinic.
“With so much improvement in the age-old sector, the sales process, or commonly referred to as the brokerage is compelled to shed off the old school thoughts and practices, as is evident today,” says Ashim Bhanja Chowdhury, head (Research & Analytics), BOP, adding that real estate is a wide spectrum and ranges to accommodate almost every segment of the society and this is indeed a lucrative business model but it has to be managed and dealt with the professionalism and integrity values of similar industries.
Today brokerage or consultancy is a serious business that has gained the faith of the clients across the spectrum. “It has brought in transparency and ensured better services for its clients. The arena is well represented by international and national players who compete for a fair share of the business. The first bold step in this direction was the induction of qualified talent and resources from business schools and colleges of eminence and excellence,” Chowdhury adds.
Concurring, Vipul Gupta, director, Neobrix, says: “Developers come out with different schemes to brokerage houses like us and to attract the customers. And as the sale increases so does our income. But a lot of brain storming, research, marketing etc is required.”
But PropTiger’s co-founder and managing director Kartik Verma differs slightly in his views. He says while brokerage business in the primary market (builder property) has seen some vast changes in the past few years, many professional organisations such as his have helped thousands of end-user buyers in buying their dream homes.
“It’snot actually about swanky offices but more about instilling the right customer-oriented values in the sales executives, standardising processes, putting compliance functions, providing post sales services and bringing increased transparency in the complete transaction,”says Verma.
Real estate brokerage has always been a tough task since it is totally different from selling a normal product. The sector needs investment in big way, be it for plots, apartments, commercial units or any big deal etc.
“From an organised structure with a corporate office, companies recruited educated and experienced staffs and turned it from a broker to a consultancy module that offers a 360-degree solution to real estate buyers that incorporates consultation, budget, location, future scenario, development, master-plan and future infrastructure developments, connectivity, post sales services and other services as and when required,” says Pawan Jasuja, managing director, Finlace.
However Alok Tyagi, managing director, ATN Group, says: “The brokers are very aware of the facets of the real estate industry and engage learned MBA professionals as their team leaders with spacious office premises laden with all technological gadgets for the smooth and effective usage for the sales staff. Consequently, they play a significant role in becoming a connecting tool between the buyer or investor and the developer.”
On the other hand, developers feel that with brokerage firms becoming more professional and customer centric, consumers are realising the value that they can bring to a property transaction.
“Today more and more customers are open to using brokerage services leading to further increase in the revenues of real estate brokerage companies,” says P Sahel, vice-chairman, Lotus Greens.
“With the advent of the social media and its utilities, for developers the brokers have seemingly posed a challenge in the real estate industry; however their role in the industry cannot be ignored too. As far as real estate brokerage business is concerned, it has definitely been hit hard in present time with the advent of property portals,” says Govind Sharda, chief financial officer, Unnati Fortune Group.
WHAT DEVELOPERS SAY
Benefits to buyers
With professional brokerage firms coming into the sector, it makes business sense to rely on their expertise. Developers focus on developing projects while brokerage firms bring in their expertise to sell these projects. With experience of such successful alliances bearing good results in the past, developers are now increasingly depending on brokers. For buyers, they get multiple options to choose from under one roof.
“The licensing structure for brokers has helped consumers not getting carried away by tricksters. Licensing would take away fly-by-night operators. Buyers have been cautious enough in choosing the right brokers and developers; it is preferred to do the due-diligence even when buyers take help from brokers, they should do their own research and enquire about prices directly. This can ensure that the broker is taking care of buyer’s interests and not trying to earn a bigger commission by quoting a higher price. Moreover, brokers provide conventional full services to buyers including analysis of different properties, price differentiation and complete documentation (contractual conditions) of the property,” says RK Arora, chairman and managing director, Supertech.
“Various brokerage houses have employed teams of professionals who not only showcase the available property options but also provide full assistance in housing loans, legal documentation amongst other things. Some have also set up their research wing for studying various markets and their future potential. Customers not only get to see the positive side of the projects the broker is offering but also the negative aspects of other projects,” says Gaurav Gupta, director, SG Estates.
Subodh Goel, Group MD, Civitech adds: “Entry of professionals in the sector has revolutionised the concept of brokering. With more and more individuals with professional degrees joining this industry, concepts like market trends and technical know-how are fast becoming the expected norms rather than just mere phrases. All this results not only in better understanding of the project and the overall sector but it also means better returns for the investors and consumers alike.”
Last but not the least, the concept of realty brokerage business becomes a very lucrative one provided a broker draws a line in choosing the honest and fair developers to work for. It has to be realised that for a smooth kickstart to this business, one needs to have a handsome amount in pocket to bear the cost such as office space, salary of the staff, infrastructure and other related expenditure till the return starts picking up after a full circle.
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