panther

So, I've been prospective buyer for a few years, helplessly watching the prices go up and slip out of my reach. I've been looking in North India region (NCR etc)

So, for the last many years, I believed that the Brokers existed as middlemen to help with the whole process, and were the true, benevolent representatives of the buyers. I also naively believed that the only money that the Brokers made was the brokerage that the buyer/seller had to pay at the end of the deal (1 to 2.5%). Therefore it came as quite a shock to me when someone told me that most of these Brokers, in addition to taking brokerage, also made money by adding on their own margin to the selling price. For example, the original seller (S) quotes a price of 100. The b@stard broker (BR) actually quotes and finalizes a deal with the buyer (B) for 120. A few days before the deal is to take place, BR, using a friend or associates, buys the property from S for 100, and presents this intermediate buyer as the original seller to B, finally selling it to B for 120.

Hence, while the real equation should look like this:

B ---- 100 ----> S

Gets converted to:

B ---- 120 ---> BR ---- 100 ---> S

Can someone knowledgeable and experienced comment on this, please? Is this really true? Nats?

abk

always negotiate your final price with the registered owner in whose name the document or the power of attorney stands.
this is a well known modus operandi, i always talk to the owners or POA's
this will eliminate the middlemen.brokers will always say they have paid an advance,token etc. check the document and talk with the owner or POA. simple

newboy

Great abk,
thanks you have really told a simple but foolproof remedy to negotiate.
your posts are really informative keep it up.
you seem to have long expierience keep guiding us.

snehra1

If its the broker who has introduced us about the property so then how can we make direct contacts with the owner.

thanks

ks2071746

Dear friend,

You are right. There is no broker not greedy. I know of some agents/brokers who have become subsequently, promoters of RE projects.They always work for the sellers and for themselves. Genuine buyers are left in lurch most times.

ks2071746

abk

ask the broker to arrange for the sitting and across the table ask politely if he is the owner or POA and if not tell him you will like to negotiate only with the owner.if not look for another property.and if he says yes ask him for the copy of the document and verify the same.
never buy the property without a personal meeting with the POA or owner.
i make it a point to meet them in their own home or office and never in a restaurant or other places.this gives a chance to verify their bonafides.

ks2071746

Dear friend,

You are right. The buyer should meet the seller and negotiate with him. Never buy RE based on what the agents/brokers say.

ks2071746

panther

Thanks for your input guys. I agree with you and have a good understanding of the unscrupulous nature of Broker in general.

BUT, my question was more with regards to the SPECIFIC SITUATION i have mentioned above, where broker buy the property temporarily and make extra margin. I need some information regarding that situation specifically. Exactly how do they do it?

abk

they claim to have given an advance or entered into an agreement or show a 3rd party as the virtual owner.many times they actually promise the seller to buy their plot and handover a token of 10000/- and bind him to the price.they scout for a buyer with a margin and do the business.its happens in all trades,basically a good businessman would not worry how much the other fellow is making,he would worry how much he will make?

Kimmig

Folks .. pls watch "Khosla ka Ghosla" movie (watch it again if u've already seen it) and take tips from how they tutor Sethi (Naveen Nischol) to deal with the RE Chors in the movie ..
There is one scene where Sethi asks Khurana (The real estate shark)
”Aap broker hain ya party” ..
Khurana,”Party”.
Vijendra (broker) tries to intervene in between and Sethi rebukes him,”Apse to mein baat hee nahin kar raha” .. hilarious

In fact I have done it to a few brokers myself .. just for the heck of it .. hehhe its fun to see the look on their faces .. it esp works when brokers advertise in Times property for flats on behalf of investors / speculators .. there was this one broker who very arrogantly quoted me some 2Cr for a flat which would have been bought for abt 65 Lakhs .. not only that he said parking will be Rs 10 Lakhs .. for which, and I know for a fact, the builder himself had been charging Rs 1 Lakh then .. 10X ROI and the damned thing didn't even need a coat of whitewash... beat that .. I pulled this broker / party one on him .. all his arrogance vanished
after flying so high for so long .. its good to give these brokers something back and rub their dirty faces in the mud