Buyer power: Global brokers bring in best practices

Jun 14 2014, 06:07 IST
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According to industry estimates, there are close to 30 lakh brokers across the country but only few have had any training or certification According to industry estimates, there are close to 30 lakh brokers across the country but only few have had any training or certification
SummaryAccording to industry estimates, there are close to 30 lakh brokers across the country but only few have had any training or certification

industry and global franchise owners working with a huge network hold out that promise. While that may be important, the fact that a broker is operating within a franchise model may give the desired comfort to the customer that he is not dealing with a local broker but with an organisation that has global footprint.

Since these real estate companies have a global presence and have network of local brokers in those geographies, they have the ability to serve the needs of an individual looking to purchase a property abroad or in a different city.

While there is hardly any protection for the consumer in the real estate sector barring the consumer forums or the courts, industry experts say that franchise owners can bring in international best practices and through their large network and customer base, can force the developer to honour their commitments. Another area where they bring their expertise is due diligence, which is not within the capacity of the individual home buyer.

“We have already boycotted some developers and even forced them to refund the buyers for misrepresentation. We approve our broker network to sell a particular project only after doing the complete due diligence and if the builder commits a wrong, we do not approve their project in future,” said Chopra adding that he asks developers to show all the papers of the project as a part of the due diligence.

SUPPLEMENTING REGULATION

Industry experts feel the entry of such franchise companies does bring about an impact in the market while engendering best practices though it cannot be a substitute to good legislation.

What experts say is that the real estate regulatory bill should address certification and licensing of brokers, in the manner that financial sector brokers follow rules and guidelines brought out by various regulators such as capital markets regulator Sebi and the insurance regulator Irda.

“It is important that there is an examination for individuals who can be certified as realty brokers and there is a provision that they may lose their license or may face penalty if there are serious complaints against them,” said Katiyar.

Some feel that the government also needs to keep an eye on the reason for sharp rise in the real estate prices. “Underwriting of real estate is leading to hoarding of flats by large players who are creating an artificial scarcity of properties and jacking up the residential real estate prices. The government will

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