Sunday, February 27, 2011

Broker is old school, Mediator is the new word!



By the end of our land search, we had a network of 150 brokers spread across the state. I found most of them online or through paper advertisements. Given the fact that real estate brokers in India do not enjoy public confidence and are viewed with suspicion, the people I worked with preferred to be addressed as ‘mediators’.  However, my experience is that they seldom ‘mediate’ between the seller and the buyer and become more of a hindrance when it comes to closing the deal. The problem is that brokers feel that they would be circumvented if the two parties established contact. The problem is even worse when there is a chain of brokers involved. The crab mentality eventually prevails and nobody gains. Most of the properties that are marketed do not have exclusive representation like in the western countries. As a result a property may be marketed by mere hear-say and sometimes without even with the knowledge of the owner. The frustrating part for the buyer is when his/her broker is not  in direct contact with the seller but is just a link in a chain of brokers. Each broker in the chain wants the biggest piece of the commission pie and as a result the deal never materializes. In our initial stages of search, we would come across brokers who did not know the owner but were marketing great lands. They would keep us in the loop with excuses like the owner is not in town etc but would not let us get in touch with the owner. Little did we know that he did not know the owner and his dealings with the broker upstream never materialized.  On putting pressure about the status of the land, the broker would revert back with a standard answer - the land has been sold. As our land search techniques evolved and matured, the first question was if the broker had direct contact with the owner. If so, then a meeting directly with the owner is organized.


When it came to the  second round of talks, another interesting observation was that the owner often did not show up, but instead their “well wisher” did - the owner was apparently engaged somewhere else.
This year long land search was a rich experience during which we were exposed to broker psyche, common excuses and a few pit falls of real estate purchases in general. Having gone through the drill, now I can smell a broker from a mile, often dressed in traditional white half shirt and white dhoti. Typically, they move in groups of 3-5 either on bikes or in White Boleros. If you see a group of people fitting this description by the road side talking on their mobiles, you can bet money on them being brokers. As my father says, 1/3 of Tamil Nadu is wannabe mediators, 1/3 are wannabe politically affiliated and the rest are jobless who are thriving on free rice, TVs and labor wages, thanks to welfare schemes of the state government.

1 comment:

  1. hi,
    interesting & very informative blog that you have here.
    am very much interested in going into farming & has been looking for some low cost land (cant afford expensive ones) somewhere in valparai or kumbam, theni for the past few months. am planning to go in for banana farming. from your experience would you advise to go in for leasing the land rather than purchasing it if one is short on funds? would appreciate your reply. also, would you refer your broker to somebody? if so, can you send me his contacts please?
    happy farming.
    thanks & rgds - vinod

    ReplyDelete