SHOULD YOU HIRE A BROKER?

Every major property transaction begins with 'should we hire a broker or not'!

When Ravi and Nita Patel, an Ahmedabad based couple, were contemplating on investing in a property a year ago, they decided to carry out the search and transaction on their own rather than consult a broker.

And thus they began scouting for a perfect house. 

Finally, they purchased a flat for Rs 45 lakh. 

They were happy with their decision…and also with the 2% brokerage fee which they saved!

One thinks, if buying a flat is so beneficial without a broker, why must we hire one? Here' why…

Firstly, a broker has a deeper knowledge of the locality and its issues and can offer you more choices in your budget.

Apart from this, the brokers also escort you to homes, even when they are locked and unoccupied by procuring the key from the owner beforehand.

It is common for the broker to know the seller and thus he can help break the ice.

Directly approaching a seller can also be slightly uncomfortable for both parties.

A broker would also be aware if the property is a distress sale or if the owner is temperamental… An agent gets commission only if the deal is done; higher the deal amount, higher the commission. One must watch out if one is being taken for a ride…!

Another important aspect is the legal process…which the broker is well aware of. An honest broker can provide the correct guidance and assistance in the entire process, document, and agreements and so on.

Certain agents also know bank representatives and experts who can ensure that your work is processed faster.

However, we need to look at both sides of the coin. Hiring a broker comes with a cost…almost 2-3% of the transaction. This might make the broker keep the sale price high or put unnecessary pressure on the parties.

If you're not interested in hiring a broker, you can always check houses online at your leisure and choose what suits you best.

Certain banks also provide free home search services to potential buyers and also provide advice for home loans and property insurance.

In a nutshell, if you are still unsure whether or not to hire a broker, here is a quick look at the pros and cons to help make up your mind!

Pros:

– Saves your time. The broker finds you options instead of you having to search yourself.

– The broker helps you with the legal processes.

Cons:

– High brokerage fees

– The broker might inflate the value of the transaction to earn a higher commission.

What you can do:

– Check realty portals to approach the sellers directly.

– Approach banks that provide free home search services.