Changing face of Real-estate broking
In an exclusive interview with Realty Plus, Tarun Bhatia, Chairman – National Association of Realtors-India (NAR-INDIA) & Vice-President of North Zone President – Association of Property Professionals, Delhi NCR spoke about his views on role and importance of NAR in the realty sector.
NAR and its initiatives in the recent times
NAR-INDIA was established eight years ago as the apex national level organization of real estate brokers, representing professionals across the length and breadth of the country. Today, spread across 28 member associations in India with an overall reach of over 20,000 brokers, NAR-INDIA continues to maintain international affiliations with IRPF, NAR Global, ICREA, FIABCI, MIPIM, FNAIM, IEA, MIAMI, AMPI, AEGI and AREAA.
At the national level NAR-INDIA has signed bilateral agreements with CREDAI National, NAREDCO, NICMAR, MACCIA and IIRE and has association with the National Housing Bank (NHB) – the country’s housing finance regulator under the Reserve Bank of India, Government of India.
- Provide access to skills and educational opportunities for real estate professionals
- Create networking opportunities for its members through meetings, networking evenings, events, conferences, seminars and conventions
- Establish bilateral and mutual relationships
- Undertake market research and disseminate information
- Lobby with government at national, state and local levels
- Ensure that every member subscribes to and follows the Code of Ethics
NAR-INDIA aims to elevate the standards of practice of the real estate brokerage business to a global level. Providing meaningful real estate education to all its members is one of its focal points. Keeping this in mind, an ‘Education Committee’ has been created with members from various state associations, to design the methodology of imparting various education programs, develop real estate education standards, conduct various real estate programs and certify real estate professionals based on standardized education programs.
NAR-India commissions independent research to provide information, stimulate debate and promote leading-edge thinking among their members, policymakers and key influencers in business.
Brokers as the integral channel partners for developers
Developers start engaging with brokers as soon as they start planning a realty development/project. They take their inputs at the planning and designing stage of the project. Once they are ready to market the project, the developers engage with brokers to take their viewpoint on the pricing and the different payment plans to be offered to prospective buyers.
They also take inputs on the marketing strategies including the various advertisement mediums to be employed to market a project. The developers depend heavily on the brokers for the initial sales impetus which they require when they launch the sales of a project. From launch till possession, majority sales in a project are contributed by brokers.
Impact of RERA on the broking segment
Real estate brokers play a very important role in real estate transactions in India, but they have never been within the ambit of a formal regulatory framework. The RERA Bill stipulates that all real estate brokers must be registered with state-level Real Estate Regulatory Authorities (RERAs). This would go a long way in bringing about transparency and professionalism in the real estate broking industry and creating a positive perception of brokers in the minds of home buyers.
Brokers, too are likely to benefit from this as they market products over which they do not have much control. Brokers cannot ensure that real estate developers stick to their timelines or promises made at the time of selling apartments. But when both the broker and the real estate developer are registered with an authority, brokers can be reasonably sure that the commitments the developer makes are reliable and thus can make the same commitments to the home with more confidence.
State-level RERAs are likely to assure brokers and home buyers that the developer will honour their commitments, which in turn should lead to an increase in consumer confidence and a revival of the market. Let us hope that the government and regulatory authorities see some of the shortcomings in the norms and fix them over time.
The brokers face a real threat from online real estate portals and other websites which questions the traditional brokerage model and work on no fees or less fees. Falling home sales and rising competition from real estate portals has pushed many traditional property brokers out of business while forcing others to work on wafer-thin margins.
The awareness among buyer’s and the online property buying trend
Consumers are going online at a rapid pace to look for information to support their buying decisions. Nine in 10 home buyers today rely on the internet as one of their primary research sources and 52 percent turn to the web as their first step.In today’s complex, rapidly changing, and digitally driven media environment, capturing a home shopper’s attention in order to build a real estate business is tougher than ever.
Almost 90% of home buyers searched online during their home buying process.The role of age and gender is also changing in driving real estate decisions. The builders and individual sellers prefer direct sales or the services of real estate portals that are ready to facilitate deals for free. Therefore, brokers using offline marketing and sales channels should incorporate digital to complement those efforts.
The Challenges and potential of the broking sector
The shrinking market is driving down the number of applications for real estate broking licenses. Technology can help those brokers who want to differentiate themselves from the crowd and provide enhanced customer service. So, the old-school broker may get wiped out but the tech savvy ones will adapt.
Apart from technology, what local brokers lack is training to provide professional services. Various agencies are making an effort to fill this void. For instance, Tata Housing Development Co. Ltd recently launched a platform called “Bandhan” that will provide training and certification to brokers.
The impact of GST on the real estate industry
Service Tax and VAT will be replaced by Central GST and State GST whereas stamp duty stays unchanged as it is out of purview of GST.There are two open items because of which at present it is difficult to predict accurately the impact of GST on real estate transactions. One is the GST rate and second is the abatement for land value in total agreement value of under construction residential unit.