Beware of Real estate brokers

[Akalale]

There are so many brokers who make 30 to 40% in brokerages. Both buyers and sellers should be aware of them.
I am writing this after I observed few sellers who were taken for a ride by the brokers.

If you are a seller,
1. Dont take small token advance like rs.5000/ or rs.10,000/ for a property which is worth several lakhs from unknown people. Dont take even one rupee.
2. Dont take advance of few lakhs (5-10% of the value) without any sale agreement. Lot of brokers will fix the sale price and give say 5-6 lakhs for a property worth 60-70 lakhs. Dont take any advance without any proper sale agreement. Brokers give this advance without agreement because they still dont have a buyer and start searching for a buyer after giving few lakhs to the seller. They start advertising all over the place to find the buyer. Seller cannot go back on his oral promise since he/she has already taken some advance without any written document. Brokers will threaten the seller if the sellers wants to return the money taken. Since there is no written agreement, seller will be forced to register the property to whoever the broker finds and whenever the broker finds.
IF broker has agreed for a price of say rs.2800/ per sq ft, he will then start looking for a buyer for a price may be rs.4000/, rs.4500 etc.
Also, since there is no formal agreement, even if the broker takes 1 year to find the buyer, seller does not have a choice. He is stuck with a broker committing to some price and wait for long time to get price agreed upon.
3. Best option for the seller is
- not to take any token advance
- not to make any agreement
- direct registration with 100% white money.
This will ensure that you will get full money on the day you have committed to.
4. If sale registration without sale agreement is not possible because of bank loans etc. make proper agreement with the help of a lawyer and ensure that agreement is valid only for the specific buyer. Buyer specified in the agreement should not have the option to register the property to someone else. Agreement should have proper time limit (30 or 45 days max) and amount of penalty should be specified if any of the party backs out.

It is really sad that some of the educated sellers are also falling trap to these brokers and loosing significant money and peace of mind.

[jpnagarprop]

Fine. What if on the day of registration if broker brings buyer saying, buyer is his cousin from abroad and register in this name. On this nth moment in the sub-register office the seller is bound to register into name asked for . Best way to reduce these broker turned re-sellers is investigate and know market price of area and quote same value. Now these re-seller/broker gets discouraged as there will be no margin and quote correct/proper value to buyers.

[msn1270]

jpnagargroup

At the time of negotiation phase, collect the valid ID Proof of the XYZ person with whom you are going for an agreement.
In the agreement, exclusively make the condition that, this agreement is only valid for the XYZ person and do not give
any options like his nominee or any person whom the buyer can name at a later stage.....etc. Also ensure that, no option
for extending this agreement, once its validity period expires.

[Daya]

One thing I have failed to understand is how are these sellers so immune to the current running rates in the area where they own a site. Like for example in Banashankari 6th stage. There is so much of broker mafia this particular area. How can a seller make an agreement with the broker for ~2800 rs and the broker manages to sell the same property for 4000 rs with the broker making 40% profit out of this deal. I mean its not a small difference after all.

[prem_shankar]

@Daya, many things come out and give some idea when you start hunting for a plot and approach numerous agents and spend considerable amount of time in doing so. From what I observed from my 3 long years of plot hunt is that:

1. Agents look out for a desperate seller
2. 2 to 3 agents team up and settle the deal with the original seller in matter of days. Site will be registered(at govt. rate) in the name of one of the group member's spouse. Most of the time, spouse won't have a PAN card, instead they provide some form declaring that their income is from agriculture.
3. Float the ads with different price. Each one of them will promise the buyer that they will arrange a meeting with the original owner (who is one among them).
4. Hold on to the property until they get some decent profit and sell it.

Buyer or seller, both have to be extra cautious while dealing with agents. They employ all possible tricks to trap the prospective buyer/seller.

[blorebuddy]

Very useful information. Thanks for posting.

[premsaagar]

This is all time favourite business tactics(un ethical off course) used by broakers.
I am live example of such stupid attempt by broakers.I liked a site and wanted to buy from a lady(widow and honest lady).Myself and my broaker (he is kind of innocent and just started real estate job) spoke to that lady over phone and finalized a deal.Later my broker got to know that other broaker(cheater a** h***) gave some 10k as token advance to that lady assuring he will buy in 2-3 months or will take back the money.So,that lady also told the same thing to us,We asked that lady to return the amount and then we can talk.That lady called the cheater broaker and asked him to take back the amount.That guy said he will take later as he is busy.But we insisted that lady to return sooner or we will not buy.We did not want to scare the lady by giving wrong image of other broaker.
Guess what happened.Since lady was insisting that cheater broaker to take money-he asked my number so that he will talk to me and tell itssafe to buy as he will take money as he is not interested etc etc.

Poor lady believed him and gave my number.Immidiately he called me and typical goonda style he told,he made agreement with lady and soon he will buy the site.If I buy that site then i should deal with him(Off course tune was bit different,scolding etc).Later i called lady to explain.Lady felt bad and then something happened..same evening i called her to see i can drop out.She was bit scared and feeling very(cant explain it guys) worried abt her site.After that i stopped looking for that site as i knew that lady will be cheaated for sure.Then i stopped for looking for site for some time.
After one year i called that lady-same story..
My sincere request to you guys is Die fighting and dont get cheated ever!!!