Think of buying a house and it’s not just the price of the property you need to consider. There are other big-ticket expenses such as paying the stamp duty and the brokerage. Striking a property deal without a broker is difficult. But the broker’s responsibility doesn’t just stop at introducing the owner and the buyer. Though the unorganized real estate sector leaves the responsibilities of the broker unclear, a broker’s job doesn’t end until you have moved into an undisputed, clean house.
Getting the keys on time is not just what a broker is meant to do, but a host of other services. So before signing off the cheque in your broker’s favour, know what services he must discharge in your favour.
Finding a house
This, of course, is his primary job. But the more a broker understands your needs, the more fruitful would be your house hunt along with him. If your broker knows your budget and preference for finer details, such as a ground floor flat or proximity to a park, your choices may get limited, but the chances that you would like something would increase.
After all, going to see a top floor when you actually want a ground floor doesn’t make much sense even if the broker is insistent. For all you know, he may be looking for huge commission on a house that doesn’t fit your preference set. So, choose a broker who seem to listen to you and not push you into deals that you don’t really want.
Insist on visiting the property. Don’t settle for something which has the same dimensions and directions that the one on sale has. After all the look-feel of every house is distinct.
Says Harinder Singh, managing director, Realistic Realtors, a Gurgaon-based real estate consultant firm dealing in commercial space: “A real estate dealer should take you to the actual site of the property. However, apart from finding the property, he should also do the requirement analysis before he takes you to the property.”
A broker is supposed to tell you everything about the house, You can hold him accountable if, at a later stage, you find water pipes leaking or that there is a dispute on the property.
Finding a lawyer
Once you select a property, the next step is formation of a sale deed. This usually needs a lawyer. Hiring a separate lawyer could be an extra burden on your pocket, apart from being an added hassle. Here comes your broker who may arrange for a lawyer.
Real estate consultants usually have a network of lawyers and legal consultants. Adds Amit Gupta, a Ghaziabad-based real estate consultant, “The dealer may or may not charge you separately for services that the lawyer will offer.”
In developed markets such as the US and Australia, these come as separate services and buyers need to pay for these.
Brokers can also help sell a disputed property. They usually bring the parties in the dispute together and try and broker an out-of-court settlement. Says a real estate broker based in central Delhi, who did not want to be named: “We strike a deal between two parties and help them sell the property at a higher valuation in the open market. We also liaison with various government departments for clearances over matters of long pending house tax or any kind of no-objection certificate.” The commission in such deals is slightly higher than a normal deal.
Doing the paperwork
Apart from the formation of the sale deed, a broker should also help you do other paperwork, such as registration of the house, getting old electricity and water bills in order and even getting a loan.
If an under-construction project, you may need help in submission of payments to the builder and the lender, if your house is on loan. Brokers even keep buyers updated about the status of a particular project.
Says Pradeep Mishra, a New Delhi-based real estate consultant: “We often collect the instalment cheques that has to reach the developer’s office. Post sale of a unit, we follow-up with their payments. Sometimes the buyer wants to know about the status of the project. We inform about the stage of construction and the project.”
This is also because the brokers get a commission from the builder. “Post sales, it is important for us that the buyer sticks to the project and continues with his payments. This ensures commission from the builder. Second, this generates confidence in the buyer,” adds Mishra.
Maintaining the property
One of the other benefits you can bargain for before you pay commissions to your broker is the repair of the property before buying. This can include fixing broken walls, electrical insulation, plumbing and tiles. Brokers usually charge the seller of the property for these services. Also, they are supposed to maintain the premises of the property.
For non-residents: If you do not live in the city where you own a property, you can appoint a dealer to keep vigil and maintain the property.
If you want it to give on rent, your consultant may simply charge you for the service and help you find a tenant and keeping an eye on the house in general. If a known dealer becomes the caretaker of the house, you would know your property is not being misused.
If you want to find out the prevalent rates in a particular location, brokers are one of the best sources.
If you continue to remain in touch with your consultant after the transaction, he can give you an update about the premium your property commands in the market. So after six months of your deal, the dealer should be in a position to tell you its market value. “A good broker not only helps you in transaction management, but also gives research-based studies on your property,” adds Singh. Similarly, your broker may apprise you whether it is the right time to buy/sell a property in keeping with the market trend.
Finding a broker
The market is full of fly-by-night operators. So before you heed the recommendations of a broker, run a check on his reliability. If you are finding one through a property portal, look for one with more number of listings. Prefer brokers with a registered office and those who have a licence to operate from the state government.
Word of mouth from family and friends works. Established broking names would not want to tarnish their image by cheating you; so dealing with them, even if expensive, may be a safer option. Some banks are actively involved in real estate transactions and act like brokers in getting you a deal in a project they may be funding.
To minimize the risk of fraud, ensure that all agreements between your agent and you are in writing. Also, never pay money upfront to your dealer.