Thursday, December 01, 2011: 06:02:20 PM

TJCD Guest Column

Real estate brokerage comes of age – Pravin Bavadiya of City Estate Management

Today, realty giants such as DLF and Parsvnath are recruiting agents to look after their sales and marketing

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Indian real estate industry has grown leaps and bounds over the years, witnessing great evolution in technology, construction practices, architectural designs and safety and security systems. A major metamorphosis has also been experienced in the real estate brokerage market, which has become much more organised from being traditionally unorganised and fragmented. Moreover, the contribution of property agents to the real estate growth story can hardly be denied.

 
Concept
 
A real estate agent is a person or a corporation, which sells and markets property on behalf of a builder. The real estate agent serves as a mediator between the builder and the buyer.The business in which these agents/brokers are engaged to buy/sell/rent/lease/manage/finance property or property rights is termed as brokerage.
 
Individual and corporate builders hire them. The tendency to recruit trained property agents for marketing real estate projects has increased, with big corporates entering the real estate business. Today, realty giants such as DLF and Parsvnath are recruiting agents to look after their sales and marketing. Brokers get commission if they sell properties on behalf of the company, they earn profit if they buy wholesale from the company and sell it to retail buyers and even earn interest if they finance the company.
 
Moreover, brokers also play a significant part in any kind of property investment made by NRIs. The agents stand by as a property caretaker for the NRI community. With the guidance of a good broker, an NRI can choose a property and even close the deal via Internet.
 
The agents guide investors both in direct investment of physical real estate and indirect investment through managed funds. Investing directly in real estate involves purchasing a residential or commercial property to use as an income-producing property or for resale at a future time. Indirect ways to invest in the real estate market include investing in real estate investment trusts (REITs), real estate exchange traded funds (ETFs) and infrastructure funds. Average investors prefer to indirectly invest in real estate due to availability of higher liquidity in the market, lower transaction costs and lower capital requirements.
 
Qualities
 
Robust knowledge on all segments of property, good negotiating power and diligence are the most sought-after traits of a professional broker. Their vast knowledge of appropriate options of properties, legal know-how, good rapport with developers, and knowledge about future projects of various developers and their terms and conditions help these agents to achieve the best result for both buyers and developers.
To provide effective services, brokers across India have adopted various innovative techniques over the years. These include provision of information through Internet rather than face to face interaction, rationalising fee structure and providing exclusive presentation to buyers, among others.
 
Key areas to look for
 
Real estate agents take into consideration various factors to excel in their customer services. Brokers conduct a thorough study of demographics, which describe composition of a population such as age, race, gender, income, migration patterns and population growth, to understand the types of properties that are in demand and the price movements of real estate.
 
In addition, agents also pay attention to interest rates, as they have a major impact on the real estate markets. Changes in interest rates can greatly influence a buyer’s ability in case of property purchase.
 
Another major factor that affects the value of real estate is the overall health of the economy. The agents, therefore, keep a track of the economic growth, which can be measured by indicators such as GDP, employment data, manufacturing activity and prices of commodities, among others.
 
Legislation is also another factor that can have a sizable impact on property demand and prices. Subsidies, deductions, tax credits and such other sops can temporarily boost property demand.
 
Going ahead, new highs in the real estate industry will open more avenues for property agents to exploit.
 
 
Pravin Bavadiya is the CMD of City Estate Management, a real estate services firm in Ahmedabad, and also the president of Ahmedabad Realtors Association. 

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