Residential retail broker model
The residential brokers (individual or brokerage firms) act as intermediaries between tenants and owners in the residential real estate market. These brokers facilitate the entire home renting process, starting from property search and evaluation to negotiations, documentation, and closure of the deal. They provide personalized assistance, guidance, and expertise to buyers, helping them make informed decisions based on their preferences, budget, and market trends.
Nobroker doesn't work
Nobroker came up with a novel concept of connecting the tenants and owners with the use of technology. Unfortunately, it is failing in delivering the said value. The primary reason is that it operates on a very thin value proposition of no-brokerage.
Consider a rental scenario in Gurgaon as below:
Apartment: 2 BHK Rent per month: Rs 50,000 Brokerage per party: Rs 25,000
The challenge is the number of visits involved and mutual agreement. Following observations hold true:
- The owners are usually affluent, occupied in work and less interested in showing the apartment to the tenants. Owners prefer outsourcing.
- Owners talk to each other on Whatsapp Groups and mutually decide the minimal rental and resale value of the apartment. This sets a floor on apartment rental and resale value and is inefficient.
- The tenants also optimize for travel time, cost, lifestyle and shift date of tenancy. Tenants look at annualized cost.
- Brokers bring in convenience and primarily convince the tenant to accept the rental offer. They usually have no bargaining power with the owners.
Efficiencies in rental market
As a tenant, it is at times a nightmare to find an apartment. The following tips might help:
- Optimize for your needs and do not forget your needs in the process of reviewing flats.
- Make your broker work: find a good broker who understands your need and works out a set of options for you.
- Save time by clubbing the viewings in a day or half day. Act fast if something fits your needs.
- Keep a price band of rent in mind instead of only a budget. Work on both sides, for eg if your society does not have a good club, go for a Cult Fit membership instead.
- If you like a society, find a way to get access to the MyGate/Apna Complex app feed of the society. Many a times owners and brokers post them in the group.
Despite challenges posed by digital platforms, traditional brokers have adapted and remain relevant by leveraging technology and focusing on fleet on street. As the real estate market evolves, residential retail brokers continue to be a crucial link between buyers and sellers, empowering individuals and families in their quest for a dream home.