In Mumbai, the biggest issue Real Estate Agents face in the real estate broking business is about securing their fees. This issue is faced across the board in all ranges may be starting from a 20 Lakhs Sale to a 20 Cr Sale where the fees remain either 1% or 2% which is agreed between both the parties mutually.
Inspite of the fact, that the Buyer knows he has to pay Services, a few shrewd once, come back saying that we did not agree before the transaction and the common factor here is that the Real Estate Agents expects a payment by default.
Common issues for Brokerage Highlighted:
- Buyer goes to multiple real estate agents in the same micro market. Some times in the high street market, he will go to every shop and list his property and requirement as he is desperate to either sell or buy.
- Renters go see multiple flats through multiple brokers/agents in the market and they dont stop till they dont find the “DEAL” or property in their budgets and they like to filter the entire market before they take a decision and by then they have dealt with multiple agents and there fore understand the market pretty well and some times more informed of the supply than an actual broker. This is a tough client, who knows the market and what happens is that he will give offer for the same flat through multiple brokers as in course of his viewings he has seen the same flats and real estate agents are great socially and they create that bond with either the buyer and seller or the owner and renter and that relationship augments the transaction and while some one else may have shown the property, the transaction is done due to a relationship by some one else. Here, the ethics of the clients need to be cleared in the first meeting, that what ever properties you show, in case of a transaction we will be charging you the fees.
- Clients negotiate post the handover of the property. This is again a big issue, as the buyers or sellers are well aware that they have got the money or possession, now the real estate agent is at their mercy and they will try and pick up faults of the real estate agents and they are thr rogue clients, who will go to any length to cut your fees or agree on a lumpsum fees.
The above are some basic issues and there are many more and a book can be written on the same.
As as real estate agent, advisor, broker you must do your home work properly to have these issues not come up.
- Send a written listing with terms and conditions clearly spelt.
- Educate the client about the market practise of payment of fees and services which you will provide.
- An experienced Agency/Broking Company will provide end to end services and a Single Owner Company may not be able to provide and hence clarify what you do on day one before the transaction to save issues later.
- Be clear and transaparent and double check information about the property, the owners or the buyers price expectations.
- Keep all records in writing
- Register yourself under RERA in case you are dealing in Primary Market.