You have decided you want to sell your house. On conducting preliminary research on how to go about it, you realize the difficulty of the process. People employ accountants to keep track of their finances and maintain records of these finances. Lawyers are employed to represent people in legal matters and undo the legal entanglements that people weave around themselves. These are two examples of professionals employed to fulfill tasks that the layman has difficulty undertaking due to lack of know-how. Thus, to sell a house, a house owner may employ the services of an estate agent/ broker who is a professional in the matters of purchase and sale of houses and land.
A broker can attract, interact, negotiate and convince prospective homebuyers to buy a house. Or they can be employed by homebuyers who can then get the house inspected and negotiate with sellers to sell the property at a price favorable to home buyers. A broker’s remuneration is in the form of commission which may be round 5% to 7% of the property sale or purchase amount. This article seeks to highlight the importance of a broker in a real estate transaction and address some questions related to their role.
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How do I get my first listing in real estate?
A broker is a professional who helps his clients buy and/or sell real estate properties and land. For this, they charge a commission which is usually a fixed percentage of the sale or purchase value of the residential property. Also, as of 2016, real estate agents, brokers need to be registered under the Real Estate (Regulation & Development) Act, 2016 to undertake any buying and selling of properties. This registration is prescribed by Section 9 of the Act read with Rule 11 of the RERA Rules.
- If you are a new broker who is in search of his/her fist listing for a client, it is best recommended you start with your circles and area.
- Spread the word about your profession and interact with everyone in your neighborhood for cultivating potential clients.
- You can create a website where you can display the relevant information to the real estate services you provide and some articles that disseminate information for home buyers and sellers.
- You could provide your services at discounted prices like evaluating the value of properties and comparative market analysis (CMA) to some of the people you know and then following up with them on how they found the quality of your service. You can then ask them to refer you to other people if they found your services praiseworthy.
- Having a presence on social media platforms also helps your image where you can post small snippets of useful real estate news and information for people to read.
- Contact local property developers for developing contacts and cultivating potential clients among them.
- Research on areas where residential properties are on the market.
- Establish a partnership with a more experienced broker to learn the tricks of the trade.
Is it worth having a broker?
If you are a first time home seller, you may find the sale process cumbersome due to inexperience and lack of knowledge on how to go about the process. It is here that a real estate agent/broker comes in handy. A broker is paid a commission for his or her service which is about 5% to 7% of the property sale value.
- A broker knows his/her way around the real estate market, finding interested buyers for your property.
- A broker can negotiate on your behalf to get a favorable price for you. A broker can evaluate the condition, features, history of the house, etc. and fix an appropriate price for it.
- A broker can help you with the documentation which can be one of the most tedious steps in the transaction if the property papers and documents are not kept in order. S/he can also guide you through the steps to help you conduct the transaction smoothly.
- A broker can help you advertise the property that you want to sell to attract prospective buyers.
- Also, if you choose to avail a broker’s services, ensure s/he is registered under the provisions of RERA.
- If you are confident about undertaking the transaction without a broker’s services, you can do so. But you need to conduct adequate research on the prevailing real estate prices, compare your house with other similar and similarly placed houses, the legal processes that are going to be a party to, estimating the price you expect for the property, maintaining proper documentation, etc.
You need to weigh the advantages of availing a broker’s services against the price that has to be paid for availing these services to determine the worth of a broker’s role.
Is a sale conducted by the owner worth it?
The worth of a sale conducted by a homeowner is not merely determined by the proceeds s/he realizes from the property sale.
- A person selling his or her house or the first time may lack the required experience to go about the processes of the sale.
- However, a person who has undergone his experience before is better suited to undertake the sale and take measures to ensure its success.
- Though the home owner’s reach may not be as solid as a broker’s, a homeowner’s financial interest in the property is enough to persuade the homeowner to take the efforts to maintain documentation, contact prospective buyers, settle dues on the property to free it from encumbrances, get the property appraised to ascertain the property value fixing any minor defects to increase the saleability of the house, so on and so forth.
- A homeowner who successfully conducts the sale of a property saves around 5% to 7% of the property value which would otherwise be paid to an estate agent. That is a significant amount of money saved.
- If a homeowner manages to sell a house to another who is in his or her circle, a middleman like an estate agent is not required.
- This is also partially true for the interactions between buyers and sellers through property websites. Facilitation of direct interaction between buyers and sellers cuts out middlemen and that too for a significantly lower cost.
Thus, the worth of an owner conducting the sale transaction depends on the skill and experience of the owner and the efforts taken by such owner to ensure the successful sale of the property for fair consideration.
The role of a broker is a very important one in a financial transaction as complex as a property sale. Brokers do not only facilitate interaction between homebuyers and home sellers but also between property developers or builders and homebuyers. A broker’s business is regulated by several legal provisions, chiefly being the provisions of RERA. This legislation was promulgated to protect the interests of homebuyers and investors. So, homebuyers can be empowered in their interaction with estate agents, builders and property developers. Employing a broker a matter of choice best left to the homebuyers and home sellers. They have to weigh the benefits provided by a broker as opposed to the cost of availing these benefits.
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