Aah, that giddying head-rush when you first decide to buy a new apartment or house! With great hopes, you talk to one agent whose number you probably got from a friend or relative. Then you quote your budget at 20% lower than you’re willing to stretch to, and wait for the right match to come along.
Pretty soon, you’re going from house to house in every waking hour you have available, and each visit is possibly made with a secondary broker who’s a friend/relative/reference of your original one. Your phone book now has 3 entries per locality of broker numbers. You’re sure you’ve seen a couple of houses at least twice with different brokers each time, and the specs of the house you initially asked to see get blurred more and more.
If all this sounds like a clear cut case for breaking up with your real estate agent, step back. Relax. Let’s examine the pros and cons to the subspecies of Homo sapiens that is the Great Indian Real Estate Broker.
1)Your broker (if he/she has been in the game for some years in the same locality) has a fine web of contacts that stretch from the Registrar’s office, to agreement writers, legal folks who can help with due diligence checks, to a contractor network for all your other house needs – i.e. painters, plumbers, gas connection, and you name it.
2)Your broker is part of a formal or informal association of brokers that conform to some loose code of conduct in their transactions. Sure there are horror stories out there, but references from friends and family help, and asking the right questions to your primary broker. We will list them a little later for your convenience.
3)A good agent, by virtue of his intimate knowledge of a neighborhood, is applying filters on your behalf. Now this may be unfortunate if he/she is letting a good house go by because of some very specific instruction you gave – but hey, what you don’t know can’t hurt you! By and large, though, having a broker saves you the time you would waste in seeing utterly unsuitable properties because of your lack of fore-knowledge.
1)Your agent will try and start to bump you up the price ladder pretty early on in the search process. Nothing you can do about it – comes with the turf. Commission is king, so you need to be firm about your absolute outer limit, and let him/her know only 80% - 85% of that as your preliminary budget.
2)Be wary of the false sense of urgency brokers create to get you to pay up a token for a house you find slightly promising. Ask how long the property has lain vacant before you came along to see it, if it’s been a few weeks, a couple of days more shouldn’t ideally make a difference.
3)Brokers can smell fear. So if you’re nervous about the whole enterprise, try and rope in a firm, super-confident friend or relative who loves you enough to go through the process with you.
4)Imperfect knowledge can backfire, so ensure that the seller’s broker is along for the visit as he/she has direct access to the seller and should be able to answer your questions competently.
We promised you some dos and dont's to consider, here they are.
1)Clarify from the start that your broker is only representing you (some brokers who represent sellers will nudge/bully you into considering their seller’s flats)
2)Lay out the scope of services you expect from your broker from the start – can they provide references of legal help for due diligence? Does their fee cover documentation help?
3)Try and get references from as many previous customers as you can – in today’s age of Facebook groups, this shouldn’t be too difficult.
4)In the case of a rental lease, clarify if and how much brokerage will be involved at the time of renewing that lease.
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Updated Date: May 27, 2016 14:18 PM