Stop blaming Real Estate Brokers

Dear Real Estate Investor:

Buying or selling a home is the “single most expensive” personal transaction that you may do you in your lifetime. Buying your first home is a major landmark in personal progress. Owning a house gives a sense of stability.  

In process of doing so, you are most likely going to encounter “real estate agents/advisors/brokers”. Not just India, but all over the world, these people are looked at with suspicion! Let me give you some example from internet:

1. USA : Here’s a story from USA—
In my case, my older brother is a real estate agent here in the USA. He has to be one of the worst in the country. He doesn’t care about his clients (buyers and sellers), although he claims he does. All he cares about is his cut. Seriously. I had a property that I foolishly asked him to sell for me, as I was busy with my career at the time. He sold it for like 65% of what it was worth. I was like “WHAT?” He just wanted his commission. Nothing else matters to him – not even family apparently. He sells to the first and lowest bidder. I haven’t spoken to him in 5 years and probably never will again. He’s a scammer and a shyster. .

2. Australia : Tricks used by broker to get customers
Note appeared that it was written by a genuine buyer but the piece of paper was just a real estate agents’ trick to obtain potential sellers’ details and then implement the rest of their cheating methods. Read full story at following link http://annystudio.com/misc/real-estate-agents-cheat/

Here’s another link http://hubpages.com/hub/Realtors-Cheat-Sellers that talks about trick used by agents.

3. UK
Residential real estate agents in the UK who have been given warnings or been banned from working are revealed in a new online version of a blacklist. Read full story at following link
http://www.propertywire.com/news/europe/uk-estate-agents-200906173226.html

India is also not an exception!!! There are similar and more stories about brokers. I have met several exceptionally ethical broker but the fact is such cases of cheating, fraud, misguiding happen very often.

But I don’t blame the real estate broker at all for this. Broker is essentially a “salesman” who is selling a product that is manufactured by someone else!! A reasonably successful broker told me – how can we “guarantee” good service to customers if “promise made by developer is not kept”!!

The real fact however, is economic in nature. Only way a broker get “incentives” is by selling a property and since there is good commission involved, like any sales person, he/she will do all that can be done to sell you the property. So what’s the incentive for broker to tell you information that will stop you from buying a property? The project a broker deals in is always the best as that what he/she is selling?

Knowing this fact, why do we blame brokers? It’s extremely unfair. I am very vocal on my TV shows on this subject. The problem lies with you, the investor or end user. You need to do your home work – before investing. But do you really do that before you make the biggest transaction of your life? Chances are that many of you will not do. And once you buy something, you put the blame on the broker who got you the deal.

But are all brokers bad. Not at all!! Please note that there is significant number of brokers that you can fully rely on. They are ethical and provide right information to you and get you the best deal. But still, I strongly urge you the end user and investors, to do a better homework before investing in any property! Happy investing!!

Manoj Misra