Personal Finance

Home Truths: How to pick your property broker

Meera Siva | Updated on January 08, 2018   -  BernardaSv

Check a few key aspects before signing with an agent

Buying or selling a property often involves taking the service of a real estate broker. These intermediaries can help you get a good deal, have a pleasant experience and ensure there are no issues in the future.

But often, not enough time is spent in selecting a good agent and you hear anecdotes of stressful situations created due to deals gone awry, mis-selling or bad attitude. You can improve your property transaction experience by avoiding a few common mistakes.

Clear commitment

The first mistake is often selecting a broker who may not be committed to the profession. For example, many agents work on part-time basis or as an add-on to their regular income. It is better to go with brokers who will spend time on transactions.

You must talk with the current and past clients of the broker. To have an idea about his efficiency, you can find out the price set by the client, the agent’s inputs, the final closing price and time it took.

With the implementation of RERA, many States have agents who are RERA registered. The regulations require that these brokers meet certain quality standards. Along with agents who come with references from known sources, you can consider this list as well.

Local expertise

The second mistake is not checking if the agent can handle your property — location, price and type. For instance, a broker may be great for selling mid-priced flats, but may fall short when it comes to a high-end home. Likewise, buying land requires different expertise and it is important to ask directed questions to ascertain this.

Local knowledge is critical for success and you must probe this. For example, an agent must know the current rates, number of properties in the market, the time it takes to sell in the current market condition, preferences of buyers and sellers for features and other factors. These will help you price the property, if you are seller; if you are a buyer, local issues — such as water stagnation or shortage — are important aspects to consider. Ask how many listings the agent has and how many transactions they have done in your area. You would expect the agents to list the properties in the neighbourhood from memory, if they are active in the area. You must also cross-check these facts through other sources such as online listings.

Good network

The third mistake is not checking if they have a good network of connections to offer other services. For example, a buyer may require the services of a lawyer to go through legal documents or a structural engineer to identify issues.

A seller may want help in getting their property ready for sale by painting or doing repair work or settling document related issues. A house may also need to be photographed and a good ad placed online and offline. An agent’s network becomes more important if you are handling the transaction remotely.

Style fit

The fourth mistake is not understanding the agent’s style of working and your comfort with it. For example, the agent may be too pushy while you may want to take your time about decisions. Or the agent may be slow, and may only give a list after pruning it themselves, while you would prefer that they share more options. As transactions may take a few months, differing personality styles often leads to friction.

You must ask how often there will be communication and in what format. You may also have preference for the type of buyer the agent brings in and how they would reach out to them.

Bringing value

Rates charged by brokers vary with region and type of property, says Yatin Sharma, COO of RE/MAX India. In North India, the brokerage fee is 1 per cent from buyers and sellers. In Bengaluru, the rate is 2 per cent for sellers and 1 per cent for buyers. However, in areas such as Noida, due to competition, brokers may work on 0.5 per cent commissions. When buying primary projects, brokers may also pass on a portion of the payment (2 to 12 per cent commission) from developers to buyers.

However, more than offering competitive rates, what is critical is the real value the agent brings to the transaction — negotiation and closing a deal. A good agent has good people skills to identify concerns regarding the other party, complications in deals and will advise you on the best reaction to the situation.

The writer is co-founder, RaNa Investment Advisors

Published on January 07, 2018

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