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IREF® - Indian Real Estate Forum > Real Estate Open House > Indian Property Laws > Broker eligible for commission?
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Old August 23 2012, 12:59 PM   #11
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Ethically you should pay,
somewhat similar happened with me few years back ,
I advertised my property on a property portal, one called broker introduced a tenant to me , later tenant requested me to reduce the rent and take the broker out from the deal , initially I agreed . On knowing this broker called me and informed this is not fair , I also realised that this is not correct and informed the tenant of my decision and both paid the brokerage.


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Originally Posted by Leela13 View Post
Hi all,

I hope someone could help us out:


When is a broker eligible for the commission?

The following is the case: A broker took us to a house, showed us the apartment.
He said we will get a token and then we will have to pay the commission (and it will be cut down from the deposit later – our landlord has no idea how, because the commission had to go to him directly).
The landlord before told the broker guys they will not get any money from him, but if they still want to go ahead – no issues.

We saw the apartment, the broker called the landlord and the landlord asked us for our number. We met him and he said we will do the deal on our own, he doesn’t want the brokers to be involved.
We made the deal with the landlord himself and shifted in. Now that broker is threatening us that he wants the money.

Does he have the right?
When is he eligible for the commission?

Thank you in advance,

Leela

 
Old August 25 2012, 10:33 PM   #12
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What happens if the broker has initiated a deal and got his commission, however subsequently the developer creates a problem in BBA and you withdraw?

In my case the broker said that his task is only to introduce, after engaging with developer he has no role to play. The developer has not refunded my money.

If the broker does not return his commission the developer will not return your money without getting his money back.

I think ethics don't work if things go wrong. Sufferer is the investor. Decision should be of the investor.
 
Old April 20 2013, 04:32 PM   #13
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Dear friends,

I posted advertisement for sale of my apartment in the Magic Brick and 99 Acre, and got most responses from brokers. One of the brokers brought two parties also to show the apartment, and trying to make the deal. My question is that since I did not ask for his services, is any brokerage / service fee payable to him? So far, I did not ask, and he has not raised this issue, but I want to get it clarified from him. Though primarily he is engaged by the buyer, and will be making documents like ATS, sale deed etc. (my apartment is 3 year old and registered, hence builder not involved), he provides services for the transaction. Buyer of course will pay to him, I think 1%, which seems more than enough (deal is for about 90 lakh) for these limited services.

I suppose, there will charges like society transfer charges (who should pay?), registration (buyer pays). Any other charges?

Thanks in advance for suggestions.
 
Old April 20 2013, 05:02 PM   #14
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Uttarakhandi,

If you do not wish to pay for the services of the broker, DON'T use those services.
Tell the broker that you will not pay him his brokerage.

There is no Free Lunch. Don't cheat the guy.

Go out there in the market and try searching for a buyer and you'll understand how difficult it is to sell.

Have a heart and behave with some ethics.

Why should only the buyer pay? The broker is helping him find a seller.
Similarly the broker is also helping you find a buyer. You must honestly pay your dues.

Quote:
Originally Posted by Uttrakhandi View Post
Dear friends,

I posted advertisement for sale of my apartment in the Magic Brick and 99 Acre, and got most responses from brokers. One of the brokers brought two parties also to show the apartment, and trying to make the deal. My question is that since I did not ask for his services, is any brokerage / service fee payable to him? So far, I did not ask, and he has not raised this issue, but I want to get it clarified from him. Though primarily he is engaged by the buyer, and will be making documents like ATS, sale deed etc. (my apartment is 3 year old and registered, hence builder not involved), he provides services for the transaction. Buyer of course will pay to him, I think 1%, which seems more than enough (deal is for about 90 lakh) for these limited services.

I suppose, there will charges like society transfer charges (who should pay?), registration (buyer pays). Any other charges?

Thanks in advance for suggestions.
 
Old April 20 2013, 05:10 PM   #15
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Friend bought a commercial shop from the project's underwriter itself via a broker, his broker being a residential property dealer, took him to the underwriter of the project, he discussed the discount and deal was done.

Next day he called him(my friend) for commission telling him that entire discount is given to you and underwriter didn't pay him commissions.

broker hadn't make it clear that, friend will have to pay him commission.

Since when buying from direct builder's underwriter........... A buyer have to pay commission to his broker?

What do my friend do?
 
Old April 20 2013, 05:26 PM   #16
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Where is the question of cheating- I think I clearly mentioned, I have not asked him for his services. He is welcome to bring his clients, like any other. So I can certaily tell him I do not need his services. But I can not prevent his client (buyer) from using his services.

If it is about his services to me, he should tell me that I am going to provide this and this services and charge you so much for that. I will then see if I want or not. I got calls from several brokers and some have brought their clients, so who is providng me services? All of them? Many put my ad on their website of their own, and then informed me. Everyone is providing service?

So I want to say- dear broke ji, before you provide any service, let me know what it is and how much you are going to charge. I did get two direct calls, of which one visited and offered a price. As of now, the price offered by broker's client and direct offer is same. If I find I can not find a buyer without engaging services of a broker, I will go for that.

But as I said the mail is to find out practice on this issue. And comment should come from uninterested parties also. Also, if I tell him I do not need his services, and he still brings a buyer (as would several others), what would should I do? Close the door?
 
Old April 21 2013, 06:38 PM   #17
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Uttrakhandi,

Sickening.

You know he is a broker. You know you have no intention of paying him.
If you do not want his services, tell him so. Don't make him sweat.
You did not ask for his services? Who has put the advertisement online?
The guy has honestly told you that he is a broker, he is not doing any charity here.

You know what, read your post again. It is very clear that you would happily take the services, but you don't want to pay for them. It's a shame.


Quote:
Originally Posted by Uttrakhandi View Post
Where is the question of cheating- I think I clearly mentioned, I have not asked him for his services. He is welcome to bring his clients, like any other. So I can certaily tell him I do not need his services. But I can not prevent his client (buyer) from using his services.

If it is about his services to me, he should tell me that I am going to provide this and this services and charge you so much for that. I will then see if I want or not. I got calls from several brokers and some have brought their clients, so who is providng me services? All of them? Many put my ad on their website of their own, and then informed me. Everyone is providing service?

So I want to say- dear broke ji, before you provide any service, let me know what it is and how much you are going to charge. I did get two direct calls, of which one visited and offered a price. As of now, the price offered by broker's client and direct offer is same. If I find I can not find a buyer without engaging services of a broker, I will go for that.

But as I said the mail is to find out practice on this issue. And comment should come from uninterested parties also. Also, if I tell him I do not need his services, and he still brings a buyer (as would several others), what would should I do? Close the door?
 
Old April 25 2013, 02:38 PM   #18
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[Captain Yadav,

First of all, I would ask you to refrain from using unparliamentary words like cheating, shame etc for fellow members and casting aspersion on their motives. Otherwise, this will the last mail that I am responding to you- after this you can write anything and I will not respond. Your mail did give some indication of your profession- unfortunately uninterested parties have so far not responded to my query. First, being new in this sector in India, my query was to find practice, and put my views. He is a broker, and he has clients. I have advertised for sale and he wants to bring his clients to buy my property- I am not asking him to bring any client. After my last mail on this issue, I made this clear to one of the brokers, who wanted to bring a party. Since he is getting brokerage from his client, he still wanted to bring them (and brought). I have no problem with that. If you have problem, please live with that instead of using bad words. I would have much more appreciated your suggestion if it was without expletives.

I have put advertisement because I want to sell my property- in my ad I have no where asked for services of a broker. Anyone interested in buying, can respond to that. Some may come direct, some may come through their brokers. So, if a broker is responding on behalf of his client (buyer), that is fine with me.

What if I am going through a broker X, and the party comes through a broker Y? Do both seller and buyer pay to both X and Y? No, each will pay to their broker. So if I do not engage a broker, but party comes with a broker, I do not understand, why I should pay to the broker, when the party is already paying him? I might engage him or a lawyer for specific service on payment basis, if needed. This is the model followed in developed countries in Europe, where I lived. The difference is that most of the people engage real estate brokers to sell the property, who work very professionally, and charge for their services, which all are visible. Services such as taking professional photos of the property, putting photos and full property information on websites, advising clients to carry out necessary repair work before sale, organising professional inspection of property by experts (which is mandatory before sale) and bring out report that lists shortcomings in the property clearly, preparing property brouchers, organising open houses (of 30 minutes or so duration once or twice a month), in which interested buyers come and see the property. The buyers are given property report also to see its shortcomings, unlike here in India, where I found broker misleading the buyer on a seepage (telling the buyer, oh it needs just a coat of paint). I had to intervene and clarify the exact type of problem to the buyer. So you get value for your money, that you pay to them. Buyer in this model does not have to pay anything- unless he decides to engage services of some one. If he wants to, he then approaches the entity (broker or lawyer, whoever he wants to engage), specifies the the services needed, and settles on price. Most of the time it is not needed as contracts are standard. Sellers engage brokers mainly because of all these kind of services, they do not have to, if they can get these things done themselves. And not just because (as you mentioned) I am a broker responding to your ad to sell, so I should be paid a brokerage, if I bring a party! In India, brokers may be in the habit of taking free lunch by taking brokerage from both parties, but this practice should be discouraged. And this is the reason they are referred dis-respectfully, including on this forum. Value for service should be the prime consideration for payment.

I have direct offers also, but all, including that from broker's client are below expectation. If I find I can not sell at the price I want, I will ask some broker of my choice to sell the property and pay for his services. He may then have incentive to sell my property more aggressively, for which I do not have time. And the price I get will be what I want, even after payng for his services.

QUOTE=CaptainYadav;815046]Uttrakhandi,

Sickening.

You know he is a broker. You know you have no intention of paying him.
If you do not want his services, tell him so. Don't make him sweat.
You did not ask for his services? Who has put the advertisement online?
The guy has honestly told you that he is a broker, he is not doing any charity here.

You know what, read your post again. It is very clear that you would happily take the services, but you don't want to pay for them. It's a shame.[/QUOTE]
 
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