By Alok Gupta, President, prestigious The Estate Agents Association of India, Central Zone One
A real estate broker is neither a business partner to share the profit or loss in a deal nor is he the lawyer to conduct due diligence. He is neither a paid employee to whom one can dictate terms nor is he a rent factoring agency. A broker is also not a financier to provide the liquidity out of his brokerage. Any of these services, if provided, is eligible to be billed separately.
On a conservative estimate, real estate broking is a Rs. 18,000 crores industry in India and there are over 5,00,000 real estate agents across the country. But, sadly not even a quarter of the agents across India is professionally qualified. Leave aside being professionally qualified, quite a lot of them are not even graduates.Professionals such as the Management Graduates, Management Masters, Chartered Accountants have so far avoided entering this field majorly for two reasons. One, they find that the profession is not remunerative. Two, they find that the profession is not a respectable profession. Both these are strong misnomers and need to be removed from their minds. This gives a lot of space and scope to the new entrants, especially those who are professionally qualified.
A real estate broker is a professional middleman without whom, it is more or less impossible to conclude a deal.
The real estate industry in India is the second-largest job provider after agriculture and is expected to grow more than 30% in the next ten years. But, the growth of the industry wouldn’t be achievable without the help of the broking fraternity of the industry. In such a situation, there is a great demand for professionals in this field.On one hand, the industry needs brokers or agents while on the other hand, the broking industry needs to mould itself to be more professional. A professional agent can be of great help in the growth of the industry at large.
Gone are the days when even an undergraduate could earn his brokerage or commission just by showing a property to any prospective taker. His job was only to introduce a buyer to the seller ( or the owner ) and an owner to the buyer ( or the tenant ). But, nowadays, a lot is expected from the middleman in the transaction. A Real Estate Broker is required to possess four major qualities – knowledge of the construction industry, knowledge of law of the land, knowledge of basic accounts, finance and taxation and the knowledge of sales and marketing.
A professional broker can be of great help in the growth of the real estate industry at large.
Nowadays, so much is expected of a Real Estate Broker in a deal that at times, he plays the role of a sales manager, at other times that of a procurement manager, at yet another time that of a registering agent while sometimes that of a lawyer and arbitrator too. At times, when representing the seller, a broker is also expected to play the role of a Chartered Architect who is required to explain the technical aspects of the project to the prospective buyers. Similarly, when representing the buyer, he is expected to play the role of a Chartered Accountant who is required to answer all tax implications of the transaction to his clients.But, it is to be understood very clearly that a broker is neither a business partner to share the profit or loss in a deal nor is he the lawyer to conduct due diligence on behalf of his or her clients. Also, he is neither a paid employee to whom one can dictate terms nor is he a rent factoring agency or a rent collector to collect or ensure the payment of rents every month. A broker is also not a financier to provide the liquidity out of his brokerage. Any of these services, if provided, is eligible to be billed separately.
From the Owner’s side, a Real Estate Broker is asked to bring in customers, do a lot of leg work, explain the property features to prospective buyers while from, the buyer’s side, an agent is supposed to get the lowest price, do a lot of running around, is even supposed to do the due diligence too. All these can not be done unless the middleman i.e. the broker himself or herself is aware of the details and intricacies of the transaction. Both the parties pay to the broker only when the deal is concluded smoothly. If, by any chance, the deal gets concluded after some bumpy rides, the agent not only loses his due professional fees but also is cursed to hell. Hence, there is an emergent need for some professionals to join this continuously growing industry in India.
RERA covers the role of a real estate broker but, only of those who represent the builders Often, the terms agent, dealer, broker and consultant are used commonly and interchangeably for all those who are a part of any real estate deal other than the seller or the buyer. Least do the parties concerned realise, how widely different these terms are. There have to be different kinds of professionals for different kinds of real estate deals. A professional who is dealing in lands needs to have different skills than the one dealing in residential premises. Even in land deals, there are many different kinds of micro specialities. The deal of agricultural land is quite different from industrial land or residential land. An urban land deal is different from a rural land deal and so on. These ambiguities would fade away with the advent of professionals in the trade.
Sections 9 and 10 of the recently introduced RERA do cover the role of a real estate agent but, only of those agents who represent the builders. It is definitely better to have some legal recognition of agents than none but, the scope of the act needs to be widened to resale transactions and also to lease and rent transactions.
In the times to come, real estate broking in India would shift from being a dynastic business to a professional one.
As I see it, one of the most significant changes of the real estate broking business in India would see in the times to come is the shift from being a dynastic business to a professional one. This profession which hitherto was being carried out largely by non-professionals and the less qualified ones would see the entry of highly qualified professionals too.
Corporate Comm India (CCI Newswire)
