Following the significant change in dynamics in the real estate market, after the implementation of the Real Estate (Regulation and Development) Act (RERA) and the Goods and Services Tax (GST), channel partners are increasingly acting as advisors and sales professionals, rather than mere brokers.
“Channel partners have started adding more value in marketing and sales. They are taking more responsibility and are accountable and with their registration with RERA their professional practice is improving fast,” property consultant JLL’s research head, Ashutosh Limaye said. Due to their changing roles, developers too, are happy to reward these channel partners more, for the value addition they bring in.
Channel partners are agencies, which take complete responsibility of selling realty projects. The selling services are designed but are not limited to a pre-agreed duration, for which these channel partners receive a set fees or commission for the services rendered. Omkar Realtors’ chief marketing officer Rajat Khandelwal, opines that incentivising channel partners is primarily a strategy based on market and project dynamics. “For us, they are not only channel partners but also our direct business associates, making them a very vital link to achieve the targeted sales. Developers, understanding their importance, offer them healthy incentives from time to time,” he says.
Property broker Sai Estate Consultants’ Amit Wadhwani says developers are talking about providing amenities but nobody actually talks about the people who sell the inventory, once it is ready. “So, it is only going to be more and more important, to give a larger share of the pie to channel partners. Also, a lot of B-school graduates are joining realty broking firms today, or setting up startups that are servicing developers in major cities. Whether it is commercial broking or residential broking, this is going to be the space for the next five to eight years, where a lot of youngsters, new talent and technology will play an important role,” says Wadhwani.
Emphasising on the role of channel partners, Nahar Group vice-chairperson Manju Yagnik, says engaging a channel partner largely means increasing access to a wider audience. “This marketing technique only means the industry is getting more organised, transparent and also more reachable, without hassles. Having a channel partner eases the processes of looking for a property a lot and also increases options for customers. We engage with channel partners after extensive diligence and let them play an advisory role to customers by guiding them appropriately,” she says.
Himanshu Kanakia, managing director of Kanakia Group says looking at the competition, it is important to incentivise channel partners, as they are the first pillar of sales. He said the Group incentives the channel partners with more brokerage, easy payment plans and international holidays, among others to motivate them to market well. Ashok Mohanani, chairman of Ekta World, says channel partners are organised in such a way that they reach out to the right target and their personalised approach, helps them create that rapport and conclude the deals. “There are occasions when developers give channel partners accelerated incentive programmes, along with preferential pricing for a limited period. Such programmes drive them to perform and achieve targets within stipulated time-lines. Channel partners are an important extended arm for sales to the developer,” he adds.
Echoing similar views, Dotom Realty’s Manoj Vishwakarma says, “Where the standard brokerage is two per cent, we are paying three per cent for some of our projects to attract channel partners. When the brokerage rises, usually, the down payment slab is also increased to clear the brokerage. However, to lure the channel partners, we have kept the brokerage release on 20 per cent of the down payment and have not increased the barrier. Based on performance and volumes, we have a healthy incentivisation plan for them,” he says.
Role of channel partners in real estate transactions
In 2020, following the Coronavirus pandemic, real estate transactions dipped at first but digital transactions received a boost towards the later half of the year. The role of channel partners has grown. Some, like Housing.com that already had a digital presence, could then leverage on this opportunity. Here is a quick look at what channel partners do for real estate developers.
With numerous features to assist home buyers, online portals that offer 360-degree home tours, construction updates, news and updates, reviews on projects, etc., have been received well in the market. In short, if a developer lists a property on say, Housing.com, the project gets more visibility, instantaneously. More visibility converts into more inquiries and better prospects for sales. With digital platforms gaining an edge despite the Coronavirus pandemic, the demand for homes and inquiries did not suffer, as prospective home buyers were easily able to skip physical site visits and make up for lost time with digital property tours at any time of the day.
Guaranteed sale of property
Among real estate agents and brokers, a channel partner stands tall. Developers usually bank on channel partners, because of the assurance of property sales. In the case of brokers, it is just a limited relationship and brokers are not liable to sell or even promote the property.
Promotion of property and marketing
Channel partners are reliable, given that they take considerable ownership of the project/property at hand. This includes listing the property, generating leads for the developer, digital marketing and a host of other content products. Once this is done, a developer firm can focus on the progress of construction, its quality, etc.
Resolving cash crunches
It is important to note that channel partners underwrite the property. Underwriting is the process of reviewing a loan application, to study the risk involved. In this case, an underwriter looks at the developer’s finances and the value of property to understand a deal’s potential. Developers use this amount to fund other business requirements.
Channel partners and RERA
Can home buyers trust channel partners? The Real Estate Act (RERA), makes it mandatory for channel partners to register with the regulatory authority, as well. Hence, home buyers should not fear dealing with a channel partner. In fact, channel partners take up the role of advisors in sales when it comes to a buyer and are on a better footing than local brokers.
You can ask the channel partner for additional services, as well, which include free site visits, after-sales services, home loan assistance and documentation. You can also ask for the best deals and discounts on properties and help with shortlisting a project within your budget. In short, you can rely on a channel partner for end-to-end assistance and services.
(With inputs from Sneha Sharon Mammen)