Pinnacle

Hi All...
Came across this article in the Financial Express today and was wondering has the Era of the New Generation Broker come in India ? Read on and feel free to comment.
__________________________________________________ ___________________________

Next-door property agents might need to look for alternative employment anytime soon unless they deliver on promises. That’s because India’s $12-billion real estate market is likely to see the entry of global, branded property consultants who are ready to redefine the way homes are bought and sold in the country.

Globally known as branded home brokers—they operate as franchisees—these property agents strive to give customers value for money.

Realty sources say US-based Century 21 and ColdWell Banker, and Canada-based Remax, are among the branded agents who are set to enter India this year in a big way. The trend has been triggered by the recent launch in India of Australia-based $30-billion LJ Hooker. Industry experts now believe that the market for re-selling flats is expected to grow tremendously here.

Branded international brokers are already doing brisk business in Australia, Belgium, Brazil, Canada, China, the Czech Republic, France, Finland, Germany, Hong Kong, Hungary, Indonesia, Ireland, Israel, Italy, Japan, Kazakhstan, South Korea, Luxembourg, Macau, Mexico, West Asia, Latin America, North Africa, the Netherlands, New Zealand, the Philippines, Poland, Portugal, Romania, Russia, Singapore, Spain, Sweden, Taiwan, Thailand, Turkey, Ukraine, the UK and the US.

Now, the question is: How will these international brokers change the realty scenario in India while bringing accountability into property deals compared with the services of the country’s traditional brokers? According to Anuj Puri, chairman and country head, Jones Lang LaSalle Meghraj (JLLM), the relationship of trust that reputed real estate consultancies have with serious property buyers is based on their track record and the fact that they follow a best-practices rulebook. In a highly volatile business environment such as real estate, they represent a core of steadiness and reliability. In other words, astute buyers will accept the judgement of a branded real estate consultancy, since such a buyer knows that the judgment is backed by integrity and real market knowledge.

The concept is catching on, fast. Ramneek Bakhshi, principal, LJ Hooker, says, “We are planning to set up franchisee-operated 15 branded offices in India in 2008 at Hyderabad, Ahmedabad, Jaipur, Chandigarh, Delhi and Mumbai, and recruit fresh young talent for buying and selling flats from the national and international Markets. The team will also include the young generation from the traditional brokers community. We are not planning to rope in traditional age-old home brokers as our work force.”

In Australia, LJ Hooker has around 500 offices providing realty services and about 1.5 million home buyers visit the company’s website every month, Bakhshi adds.

In India, there are five lakh brokers and sub-brokers who charge about 2% brokerage from both buyers as well as sellers for a property deal. Of course, it is not always 2% in some cases, and the odd home buyer does feel short-changed. In the process, these traditional brokers represent only themselves. But LJ Hooker, apart from others entering India as franchisees, will charge 95% of the usual brokerage to the seller and spare home buyers.

According to industry experts, once these international home brokers enter India, the traditional existing 6 lakh brokers will either have to re-invent themselves branded brokers—other entrants may want to use their experience—or try to enter some other business. This means, each international broker will try and involve a bunch of next-generation brokers from the traditional brokers and sub-brokers communities in their branded services. They will strive to bring local expertise in sync with international acumen in order to form big groups of 600-700 international brokers. These traditional brokers will then have to work under the banner of international branded brokers and possibly use signboards, proclaiming their association with the branded agents, outside their offices, Bakhshi explains

__________________
Ram

vajra

Hi Ram,

I agree with you. It seems to me that in a market where stability and integrity are highly prized by buyers, branded realtors may begin to enjoy the benefits of a brand that is associated with those traits.

Martin