[ecis2016.org] We list several ways in which brokers can positively influence housing demand and boost their own business, amid the Coronavirus pandemic-induced slowdown
The stakeholders in India’s real estate sector are trying various measures, to encourage buyers to invest in properties, at a time when housing sales have continued to dip. ecis2016.org data show that only 69,235 units were sold across India’s nine leading residential markets between January and March, 2020. In this situation, it becomes imperative for real estate agents and brokerage firms, to do their bit in improving buyers’ sentiments and sales.
You are reading: How brokers can help push up housing demand
On its part, the government has increased the tax deduction limit for first-time home buyers, under Section 80EEA. The RBI has also lowered the repo rate at which it lends money to scheduled banks to 4%, in effect reducing the interest rate on home loans to a record-low level. Developers are also offering discounts on prices, to attract buyers.
Even though agents work only as facilitators in the transactions and may not have a say on various aspects of a deal, they are capable of enforcing positive changes. We look at some of the ways in which brokers can positively influence and help the overall business to grow, amid the Coronavirus pandemic’s impact on the economy.
Obtain a RERA ID for your business
Before the Coronavirus crisis brought activity to a standstill, lack of trust in the sector forced many home seekers to adopt a wait-and-watch approach. In a bid to bring transparency into the sector, the government introduced the real estate law in 2016. Under this law, builders and brokers have to register themselves under the state real estate regulatory authorities (RERA) in order to operate and run their business.
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“While brokerage firms operating on a large scale have registered themselves with the RERA, individual brokers often fail to do so and continue their neighbourhood businesses without any permit. Consequently, a large section of brokers remains unwatched. Despite the presence of large players, a large section of consumers find it easier to deal with the neighbourhood brokers, because of their familiarity with the local market and sometimes because of their fear of working through online channels. These individual brokers have the potential to grow their businesses manifold, if they make themselves more trustworthy by registering themselves under the RERA,” says Dheeraj Jain, a Delhi-based advocate.
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Consider offering discounts on commissions
There is tremendous pressure on Indian developers to cut their margins, even though property prices have only witnessed negligible growth in the past five years. Commerce minister Piyush Goyal recently told the community to reduce prices, in order to survive the fallout of the COVID-19 crisis.
“You can choose to be stuck with your inventory, then default with the banks, or you can choose to sell it even if you have bought it at high prices and move forward,” Goyal said, while addressing a video-conference meeting organised by the National Real Estate Development Council (NAREDCO) in June 2020.
Considering this, real estate agents can also offer some discount on their commission, to prompt buyers and sellers. Typically, brokers charge 1% of the deal value from both, the buyer and seller. In these tough times, one may consider taking a cut.
“If buyers are not willing to buy right now, sellers are also not quite encouraged to sell, because they are afraid of not being able to get the right price for their properties. Since they would end up paying a significant portion of the profits on capital gains tax and other charges, including the brokerage, they feel discouraged to let go of their assets in this slow-moving market. Property brokers must view this as an opportunity and prompt this segment by offering some waiver on brokerage,” says 49-year-old Lathika Srinivas, who has deferred her plan to sell her west-Delhi-based DDA flat for now.
Increase your reach
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Brokerage firms running large-scale operations work as a one-stop shop for the consumer. They help the buyer vis-à-vis housing finance and legal help, apart from offering site visit assistance, virtual payment services, etc. The same, however, is not the case with individual property brokers or brokerages that run comparatively smaller businesses.
As real estate transactions are quite muted right now, this is the perfect time to increase your contacts and tie up with other stakeholders, to make the purchase process easier for your clients. This way, neither the buyer nor the seller, has to run from pillar to post to conclude the property deal.
“At a time when social distancing norms are in force, neighbourhood brokers have a higher chance of materialising sales, since they help sellers in the nearby areas to get in touch with buyers in the same areas. If they were to expand their operations, by tying up with banks and legal experts, the chances of materialising sales would increase manifold. Needless to say, the expanded network would continue to help them throughout their career,” adds Jain.
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Help buyers to understand the market
First-time buyers and sellers face many challenges while carrying out the transaction, because of the complex legalities and tax laws. As brokers are likely to have considerable knowledge about these subjects, you can help buyers and sellers to develop a better understanding of the market, the legal and financial aspects of the transaction and the complex jargons involved in the process. This support work should be viewed as a brand-building exercise that would help you grow your business in the long term, apart from winning the client’s trust.
How much commission brokers in India charge?
Generally, brokers in India charge 2% of the deal value as commission.
What is a virtual tour?
A virtual tour is a 360-degree view of the property, through a sequence of photos or videos. A virtual tour would give the viewer control over what he wants to see and at which speed.
How can real estate agents increase their reach?
Real estate agents can increase their reach by tying up with legal experts and housing finance companies and also by using online platforms including social media, to reach out to clients.
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