Commission for Real Estate Agents

[bdasites]

Hi,

I was searching for resale independent houses. But, I am forced to go through agents all the ads I see are posted by them. I am not sure of the commission amount to be paid to them. Some agents are demanding 2% of the sale value, while some are asking for 1%. I feel that is still a big amount and want to negotiate this. What is the usual and fair commission value to be paid to agents. I am looking for houses below 70 Lakh.

Thanks,
Sunil

[RAVIKANTH]

Most brokers dont waste their time on somebody who bargains, negotiates on the brokerage front. They just move on and go to the next prospective buyer or seller who will not crib about brokerage. 2% is the industry standard. If u bargain too much and are not ready to pay 2%, u will be the loser and miss out on a good property u have liked and "want" to buy. It is like missing the forest for the wood, as the saying goes. I myself am a broker, so I know how our minds work and how our profession handles such people.

However, I have put up a House for Sale advertisement in this website itself for 63 lakhs, brand new, east facing duplex villa, 1850 sq.ft. BUA. See that ad if it interests u. No brokerage at all on this villa for 63 lakhs since I am the owner and it is brand new, ready to move in.

[santosh_vp]

Ravikanth

As a RE broker can you breif the community what kind of services we can expect from an agent asking 2% commision. If he is just a mediator bringing a buyer and seller then 2% commision is huge money for big transation.

[bdasites]

Sounds to me like Ravikanth is an agent himself. because only one or two agents i came across asking for 2%. others ask 1%

[kalidas]

bdasites,

If you want to avoid the brokerage why not directly check the ads posted on this website along with others like sulekha, olx, quikr, magic bricks, 99acres etc, references from friends, corporate websites etc. Also you can check yellow pages paper. I am sure that there are a lot of owner who sell directly. Alternatively, I see many phone numbers posted on the compound walls of empty sites (might be the owners number). That could help too if you want to avoid middle men. But again, you might not get all the info in a single day. It takes a lot of patience and time.

Rgds,
Kalidas

[plotbuyer]

Asking 2% for giving us the contact details of the owner is extraordinarily greedy. We need to shun these kind of brokers. The brokers are doing a dis-service to the owners by not taking up all the offers to the owners. Of course, I am just telling you how my mind works.

[Jack]

Two Percent flat is a huge money ..RE Agent will go for kill with 4% ( 2% from the owner and 2% from the buyer ) .On average Rs 50 Lac property , the commission is 2 lac . Letting Agents are inevitable in present society ,but they should be reasonable .I agree with Mr Kalidas , in the web-world, we can get lot of information's . In addition to website referred by Kalidas , www.commonfloor.com and www.makaan.com are good websites . To identify the property price in a location refer www.zamanzar.com
Before buying , the buyer should do , a proper home work and short list place /area . Visit the short listed place . Try to identify the local broker in that area ( you can enquire Laundry man , small vegetable shops for local brokers ). Some times , small petty shop owners do real estate business as a part time . They will charge less than 1% or some flat amount . They can identify you the owner . The negative points are
1. The buyer has to go behind the seller for the documents
2. The buyer has to prepare the necessary documents by them self
3. The buyer has to co-ordinate with buyer until sale deed is completed

2% RE agents ( Hi-Fi Agents ) might NOT be the first level of brokers . The bounty has to be shared with other brokers

[PlotGuy]

Jack - I completely agree. The attitude of some of these brokers is hard to believe. You also raise some good points. The negative points will go away if you consult a good and trustworthy real estate lawyer.

[bdasites]

Most brokers dont waste their time on somebody who bargains, negotiates on the brokerage front. They just move on and go to the next prospective buyer or seller who will not crib about brokerage. 2% is the industry standard. If u bargain too much and are not ready to pay 2%, u will be the loser and miss out on a good property u have liked and "want" to buy. It is like missing the forest for the wood, as the saying goes. I myself am a broker, so I know how our minds work and how our profession handles such people.

Ravikanth,
1. Can you tell me the services provided by brokers? I ask this because the ones I came across get contacts from other brokers, who get it in turn from other brokers etc. In this case, all the broker is giving me is information that a particular house is available for sale at a particular location. They mostly don't even understand my requirements, and 2/3rds of the time show houses which don't match my requirements (even though I clearly tell my requirements)
2. Who fixed this 2% commission thing? If 2% is the standard, why do most brokers still work at 1% and clearly say its negotiable? Saying its a market standard is like saying breaking rules is commonly-spread and so we should also break them. Doesn't make sense to me.
3. At some point, it becomes a matter of your principles than just money. Even if I like a house very much, I'd still hold back from throwing away my money to greedy people. I'd much rather donate it to a charity or give it to the beggars. (FYI, I do donate ~22K per year for charity.)
4. A personal suggestion to you is to treat it as a service. If you think you are doing a favour to people, I'm sure you will soon go out of business (unless you cheat or force people to do business with you). Do your hard-work, understand people's requirements, scout for places, be frank, suggest the right price for the place and take a fixed amount as consultation fees. That way, as a buyer, I'd be happy that someone else is sharing my burden and 'helping' me find a house. Now, I do all the hardwork, I try to avoid cheating by the brokers and house-owners and still pay a lot of money.

However, I have put up a House for Sale advertisement in this website itself for 63 lakhs, brand new, east facing duplex villa, 1850 sq.ft. BUA. See that ad if it interests u. No brokerage at all on this villa for 63 lakhs since I am the owner and it is brand new, ready to move in.

Where is this house? Can you give the link?

[bdasites]

If you want to avoid the brokerage why not directly check the ads posted on this website along with others like sulekha, olx, quikr, magic bricks, 99acres etc, references from friends, corporate websites etc. Also you can check yellow pages paper.

So far, I've been religiously checking ads in Sulekha, OLX, Quickr, MagicBricks, 99acres. I was also getting FreeAds, AdMag every now and then to check for houses. <5% of the ads in there have direct owners listed there. Almost every ad there is by agents. Among them, the ones that match my requirement are very, very few.

I am sure that there are a lot of owner who sell directly.

Yes, I also think there are lot of owners who want to sell directly. I checked with some owners why they go through brokers. It seems like once they post an ad in the above forums themselves, the brokers start torturing them with calls like anything. If you give the address by mistake, they will directly come and bring clients to the house directly. I guess they put the owners such a state that the owners finally give up.

Alternatively, I see many phone numbers posted on the compound walls of empty sites (might be the owners number). That could help too if you want to avoid middle men.

I am specifically looking for resale individual houses. So, this may not be applicable for my case.

But again, you might not get all the info in a single day. It takes a lot of patience and time.

It's been about 6 months since I started looking for houses. The number of houses I've seen without a broker's interference is like <20% (Initially, i was not considering ads posted by agents at all). I still have patience, but no hope with these agents.