It was once believed by many that the Real Estate (Regulation and Development) Act, 2016 (RERA) would destroy the broker community in India. Some experts even predicted that over 70% of brokers in India would shut shop, once the provisions of the real estate law came into effect. However, this has not been the case.
Impact of RERA on real estate agents
The RERA rules make it mandatory for all property brokers and advisors – individuals and joint entities – to register themselves with the state real estate regulatory authority, in order to be able to operate in the market. This registration number should be an integral part of all their marketing exercises (advertisements in the media, etc.) too, says the law. Also, under the provisions of the RERA, brokers in India need to maintain documentary records of all their associations with developers.
In an unregulated and opaque industry, this home buyer-centric law was supposed to make revolutionary changes. The law managed to weed out operators who did not handle their business seriously and those for whom the brokerage was a secondary business.
Following this large scale consolidation, only genuine players, registered under the RERA, will remain in the market. This is one reason why the need for property brokers is much greater today for the consumer than it ever was.
See also: Everything real estate agents need to know about the RERA
Will online real estate portals replace property brokers?
There is no denying the inroads that online realty portals have made, in India’s real estate brokerage businesses. This has come alongside a tremendous increase in the number of smartphone users in India. Consequently, buyers and sellers now do a large part of the preparations for the transaction, on their phones. However, the nature of the transaction is such that the buyer has to ultimately physically visit places and meet people to translate this knowledge into reality. In spite of technological evolution, a majority of buyers in India prefer meeting people in person, before they are ready to hand over a cheque. Hence, the assumption that realty portals would bring about the end of the traditional brokerage businesses in India, is ill-founded. They are both likely to thrive side-by-side, with distinct, as well as overlapping roles.
“Online portals do help, in the sense that they give you a broader perspective of a locality. It is, however, beyond their scope to, say, give you a clear picture about the condition of roads in this locality during the monsoon season. There are so many small aspects that impact a resident’s life in a big way. Someone who has personally worked in this particular locality, would definitely have a much wider knowledge base to share with the buyer,” says Nitin Diwan, a Dwarka-based real estate agent who has been active in the Delhi market for nearly 17 years.
Variety of services offered by real estate brokers
The need for property brokers may also rise, because of the increased levels of due diligence that buyers and sellers have to undertake following the RERA and the GST laws. Considering the large sums of money involved in property transactions, any miscalculation could result in serious repercussions. An inexperienced buyer, for example, may have no idea how stamp duty payments and property registrations work. Although many cities have launched online services in this regard, buyers have to ultimately make a physical visit to the sub-registrar’s office, to get the homes registered in their names. This is where property brokers have to pitch in.
Property purchases are just not completed with the signing of the deal. Buyers and sellers may need further assistance, in carrying out several tasks. A seller, who is interested in finding a new property to save on capital gains tax, would need the help of a broker. So would a home buyer who may need to get the power, water, landline and cooking gas connections fixed in his new home. “Those who need to get their new homes renovated or repaired, can also rely on the services of their brokers,” adds Diwan.
See also: Information that brokers should keep handy, while dealing with clients
FAQs
How will the RERA affect property brokers?
The RERA is likely to weed out fly-by-night operators and make the real estate brokerage business in India more organised.
What is the difference between a broker and a brokerage firm?
A property broker generally runs the business as an individual or with a small team and the business is restricted to specific localities. A brokerage firm involves a large operation, spread across multiple locations.
How do brokers earn income?
Brokers typically charge a percentage of the property transaction value as commission. They may also charge a commission or a flat rate for other services offered.
