ahmedabad

Real estate broking business, which is considered to be most lucrative because of high income and low investment, is undergoing tremendous change. Now it is not only about getting a buyer and a seller and settling the deal and claiming the commission. With changing times, customers’ needs are also changing, requiring the broker to be more updated about the regulations, legal proceedings, maintaining relations and providing after sales service as well. Pravin Bavadiya, president of Ahmedabad Realtors Association, said that with the changing model of real estate consultancy business, image of realtors is changing but responsibility is increasing. “The real estate developers also prefer to have professional brokers as mediators while sealing a land deal, to avoid any kind of title clearance problems and ownership related issues,” said Bavadiya. Now, credibility and reputation of the broker have become important for successfully running the business. Still, there is more black money involved in property deals. Trustworthiness of a real estate broker becomes far more important, as the customer gives around 30% to 40% amount of the deal in his hands, without any kind of documents or written proofs, said one of the real estate consultants. With the increasing popularity of real estate broking or consultancy business everyone seems to be entering the business. Although, it is not possible to get the exact number of brokers in the city because of the unorganised nature of the business, if the survey conducted by a foreign real estate company about one and a half years ago is to be believed, then there were around four lakh real estate brokers in the city including real estate consultant companies, small time brokers and silent brokers. Tejas Shah, director of SAVE Management, said that there are around 400 real estate firms in the city who handle the business in a professional way. However, the number of small and medium size brokers who take the business seriously are around 3,000 to 4,000. The main reason for such a rush for this business is higher income and lower risk compared to other businesses. One does not really need a big office or employees to begin with. However, medium size brokers could also earn in the range of Rs 5 – Rs10 lakh per annum, while earnings of a bigger land broker runs in crores. The big companies and big clients prefer professional brokers even though they have to pay higher brokerage compared to unprofessional or part-time brokers present near a paan shop or tea stall at the roadside. The ratio of land deals sealed in the city is 90:10 in favour of professional real estate brokers or consultants. As per an estimate, a broker strikes on an average, three deals every month that includes all types of businesses such as rent and sales of residential and commercial properties, said Hiren Kheni of Disha Estate Management. Although Real Estate broking business is considered to be more lucrative, all is not rosy about the profession. Small brokers have to struggle in the initial years. Most brokers have to pass months without cracking even a single deal, resulting into financial crunch and frustration. Some of the brokers term it as a learning period as they get better understanding of their business during these slack years in terms of understanding the requirement of customers, nature of portfolio required for the business, and the like. Various business models have been used in the real estate broking business starting from pure consultancy to mandated broking. ‘Jhajha Haath Raliyamana’, is a Gujarati proverb, which means ‘the more the better’. This proverb seems to be most appropriate in the real estate brokerage business. Although it squeezes profit margins but generates more business. Better networking fetches more business as one has the property to lease or let but may not have the buyers or tenants, which could be provided by other brokers in the circle. In such cases the brokerage is shared, so the profit margin comes down. “In case two or three brokers are involved in the deal of a single property, then the brokerage is shared on an equal basis,” said Paresh Ramawat, a real estate broker in Bopal. Moreover, bigger real estate companies have started mandatory space marketing by tying up with real estate developers. “In such type of business models, the realtor obtains sell mandate from the developer at the conceptualisation of the project and then a sub-contract is given to other consultants in the city or any other city,” said Bavadiya. He said that the newly formed association AAR, which allows membership of national level association, helps us to do business in other cities by sitting in Ahmedabad and also get investors from other cities in the same manner in this type of a model. Some brokers also try out investing their own money in residential or commercial schemes or land. They pay the land owner or the developer a token amount and sell the land within a time period fixed for full payment. In this way they can get better income compare to brokerage. However, one must have sufficient fund in this model. Source: http://www.dnaindia.com/money/report_brokering-it-big-in-ahmedabad_1436772 Filed under: Ahmedabad , Builders/ Developers , New projects Tagged: Ahnedabad , Real Estate in Ahmedabad