Having your own home is a dream come true for most people. However, as we all know, it is an expensive dream. Most people save a lifetime to make enough money for their dream home. The lucky few do manage to find great homes for themselves and frankly, the entire credit of this goes to good real estate agents. An experienced agent can assess your budget, understand your needs, and then find the perfect home for your needs. However, this also means that estate agents search through thousands of properties to find the perfect match for you. They visit empty homes, assess the property, meet the buyer, and then display the property for you. It is also the job of the real estate agent to assess the condition of the buyer and the seller. Are they serious about the transaction and are both parties secure legally and financially?
What Does This Mean For The Real Estate Agent?
The real estate market in India is largely unsupervised, states EstateAgentIndia. Anyone from a homemaker to the local house cleaner can sell property, as there is no need for licensure and regulation. Almost anyone can sell property through personal contacts but this is risky for the buyer, the seller and the agent. As the agents are not trained, they usually are completely unaware of hidden mortgages, legal issues, hidden house damage, etc. The seller and estate agent are not under any legal obligation to disclose property faults and the property buyer frequently is stuck with a money pit.
This is surprising considering that the Indian real estate market is financially impressive. According to Moneylife, the real estate market contributed to 6.3 percent of the GDP in 2013. The segment was expected to produce more than 7.6 million jobs in the next decade. Due to rapid urbanization, an improving economy, and a comfortable middle class and upper middle class, the demand for affordable housing doubled in 2013. This was also reflected in more than US$1.14 billion ( INR7, 705 crore ) that was invested in commercial real estate. However, this has also led to several problems.
The Indian economy picked up from the recession by 2010. With the booming economy, several new players entered the real estate market. Most of these companies were new to real estate investment and they advertised attractive properties in far-flung regions. A case in question was Vian Infrastructure. The company promoted properties in Jaipur and Haridwar at attractively low rates. The entire investment was about Rs 2.5 crores. However, the company was unable to follow through on construction even after collecting money from the buyers. By late 2010, investors had lodged complaints with the Economic Offences Wing of Delhi Police. In this case, almost 99 percent of the investors were able to get back their money but this does not happen with every investor or small buyer. The unregulated market had led to more than 25 percent of first-time homebuyers being cheated of their hard-earned money.
Prevention Is Better Than Regret
It is not all bad news, though, as the Indian Government has now jumped in with both feet to regulate the real estate market and real estate transactions, reports TimesOfIndia. The Real Estate (Regulation and Development) Bill 2013 is geared to watchdog buyers, seller, builders, agents, and anyone working directly or indirectly in the real estate industry. The bill proposes mandatory registration of all real estate agents and sellers and it proposes clear responsibilities for all agents before sales can be registered. Brokers and builders would also be included under the act and they would be liable for any promises made to the consumer. This would benefit both the buyer and the seller. According to the new rule, the seller (real estate agent, broker or builder) would be required to mandatorily register with a regulator. Sellers (real estate agent, broker or builder) would have to disclose property details including property defects, legal issues, statutory approvals, municipality approvals, etc. to the buyer before a sale was approved. In case a sale went through, a portion of the money collected from buyers will be compulsorily stored in an escrow account to be used only for the purchase project. Sellers cannot accept advance payments without signing an agreement. Sellers and agents were liable for giving possession on the scheduled date. A delay in delivery would mean that the buyer was entitled to a refund with 15 percent interest per year. Most sellers including international builders like Unitech Group Homes have already registered with local regulatory authorities to protect their buyers and this does mean that the seller is assured of an authentic, legally protected sale.
In The End, It All Comes Down To Security.
As a buyer, you have to choose a real estate agent or a builder with a rock solid reputation for property and sales, recommends SiliconIndia. The company or sales professional should also be registered with a national accreditation agency and they should guarantee the purchase. This may not yet be possible but the Real Estate (Regulation and Development) Bill 2013 could bring about dramatic changes in real estate agents and the services they offer to customers.