The metamorphosis of Real Estate Brokerage

With the booming real estate industry, Real Estate Brokerage is also evolving as a profession; in the post-recession economy. Real estate brokerage is transforming into a more organised and structured industry and presents huge opportunity for educated professionals with entrepreneurial aspirations. Explore further

By Aman Raj | May 18, 2010

We all have at some point of our lives come across with a property dealer, whether to buy a property, rent it, or sell it off for ourselves. Most of us perceive the broker to be an unprofessional part-timer opportunist who would either inflate property prices / rentals expected by the seller and make money from the buyer by selling it at a premium or hide vital details about the property which the buyer would come to know only after moving in. National Award winning film – Khosla ka


Ghosla also discussed some of the extremely serious issues about the unaccountable nature of the property dealer in a not-so-serious fashion.

But at the same time, real estate brokerage could be a highly lucrative business. If you consider Delhi, then any decent three bhk flat starts from about 50lakh, on a two per cent commission the brokerage comes out to be a lakh of rupees on a single transaction. To tap this opportunity many professional companies and individuals are coming to the fore. Even old and established players are now repositioning themselves and are emerging as trusted and reliable partners and some have also been very successful in taking their business to the next league. This draws our attention to some of the other significant developments in this highly compelling sector:

  • Reassuring trust in the hearts and minds of the customers – Customers want to be sure about the credentials of his/her broker; they appreciate walking in a professional office, they want to deal with presentable people with a service attitude and not pan-chewing foul mouthed bucket shop owners. Branding / advertising / public relation helps because these not only create recall but also provide a consumer, the assurance that he is dealing with an organisation of repute and not a fly-by-night operator.
  • Emergence of one-stop shops – A one-stop property shop primarily implies a brokerage house where the customer can not only buy/sell/rent/lease property but also find financial assistance / legal assistance, mortgage and other services under the same roof, but more than anything else what matters the most to the present day consumer is that he/she should be able to find access to maximum number of properties under the same roof so that he/she does not have to go from broker to broker to find the property of their choice. This also means higher conversion rate for the broker, which makes it a win-win proposition for both parties.     
  • Importance of database – Many leading developers and brokers either have realised or are soon realising the need of having a strong in-house database of prospective customers. Not surprisingly though, in the days of recession all of us, received text messages and emails from many brokers and developers who were trying to market their affordable projects. This type of media has in fact proved to be a highly cost effective lead generation tool in the last few days and will continue to do so.
  • Internet presence – The success of property portals is testimony enough of the significance of internet presence for brokers. However, life does not end here, on the internet, there are number of avenues from where brokers could generate business, and it is such a dynamic medium that new avenues emerge everyday and the older ones get obsolete. But some of the must have marketing platforms which many brokers are taking advantage of in the post 2010 realty market are:

                   An interactive and updated website

                   Presence on various property and trade portals like Justdial, Indiamart etc

                   Search engine optimisation

                   Google Adwords

                   Social media like Facebook, Orkut, Linkedin etc.

                   Blogs

  • A strong telemarketing unit – Its not only the developers who have opened their in-house call centres, telemarketing has also become an important lead generation source for big brokerage houses like Agni Property, Investors Clinic and Buniyaad. These brokerage houses have their own call centres which apart from making outbound marketing calls, attend to calls made by customers who after reading a print / internet advertisement call up on toll free numbers or send SMS requests to be contacted.
  • Local, regional, national, and international clientele – New mediums have also prompted many brokers to go beyond the conventional working style of remaining confined to their territory. Many brokers these days have a strong clientele from not only across their city but also their state, the adjoining states and also throughout the world. Many NRIs from all over the world wish to buy home/real estate in their own country and they are also coming to know about the India Growth Story from the Media of their resident country. Nevertheless, the various incidents of NRIs being duped or cheated by brokers and developers have obviously made them cautious about their choice of a consultant back home. 
  • Better quality human resource – With the level of operations of these brokerage houses taking a big leap, the quality of service and the quality of human resource in these organisations have also improved; in many organizations the agent is a well educated and qualified professional who takes home a decent pay package with attractive incentives every month.
  • Exclusive listings and mandates – In order to safeguard the broker's time and interest in the property, many brokers these days are working on exclusive listings and mandates. These help the broker to give extra attention to the listings, advertise it in his network, and find a buyer for the property in the best turnaround time. But only selected brokers would be considered by the seller / developer to be eligible for asking an exclusive mandate.

All of these developments have brought about a polarisation between two categories of the realty brokerage businesses:-

First being the organised brokerage sector, which leverages the strength of a team of professional agents and enjoys the advantage of the bigger scale of business, it is also able to generate referrals from all over the world. Because of this, organised players are also able to be in a better position to negotiate with developers and are in turn able to provide better value to their customers.  These guys have a better future because they are able to provide all that the rapidly evolving customer of today wants and they are also able to find them wherever they are present, which to me is the bigger differentiator.

Second, being the army of scattered part timers and individual operators who work on their individual network and on a fixed clientele. As the consumers become more aware and savvy, this category of brokers is doomed to become irrelevant and their individual network would become an extremely limiting factor.

But to build a business of the first category is no doubt a difficult ask. It calls for heavy investment, bang on recruitment and a network spread which will take years to build. Here is where franchising comes to the fore. In various mature markets across the world like US, Canada, Europe, South Africa, Middle East, Australia etc, real estate franchising networks like RE/MAX offer similar opportunities and provides franchisees and agents with a local, regional, national and global network, world-class training, advanced technology platform, power of collective marketing and a host of support services. In these countries a real estate franchisee is available for prices equivalent to other financial or food franchisees, reason being a real estate franchisee in other markets works on a maximum commission model for the agents working with these franchisees and the agents in return pay a desk fee which covers the operational expenses of the franchisee, making it a low overhead and volumes driven business.

With a network of 1,00,000 brokers/ agents / property dealers operating from almost 7000 offices in about 80 countries of the world, RE/MAX is the world leader in Real Estate franchising. RE/MAX stands for Real Estate Maximums. It operates on a unique business model that blends administrative skills of the franchisees with that of the salesmanship skills of its broker associates to solve the fundamental problems of realty brokers. RE/MAX in India is available at the price of a low cost franchising option –where one can either join RE/MAX as a real estate agent at virtually zero investment or start a RE/MAX franchisee on an investment of 5 to 15 lakh. 

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