by datta Nighut 
1. Introduction to Real Estate Agents
Real Estate Agents in Mumbai Roles, Responsibilities, and Compensationis essential for property transactions. They bridge the gap between sellers and buyers, and provide market intelligence. Without them, parties may struggle to understand the market and get a fair deal.
There has been an estimated 12-15% annual growth of real estate agents in India. The number of Mumbai-based property agents is also astounding. Maharashtra is one of the first states in the country to promulgate rules related to real estate agents and their registration in 2010. They were made part of the mainstream laws of the real estate regulatory authority in 2016. The estimated number of real estate agents in Mumbai is 50,000.
The average commission of agents in this market is 2 percent of transaction value. It is a market where larger quantum means a larger commission. A real estate agent in Mumbai has to have multi-dimensional skills to be successful in this business. Playing an intermediary role, the property brokers need to possess comprehensive networking skills. An in-depth knowledge of the geographic neighborhood and its hidden elements, the demographic profile of clients, and a thorough understanding of the local market are prerequisites. Further, a realistic problem-solving approach can be an add-on. These cemented dimensions will cater to the brokerage community to succeed in this ultra-competitive market.
2. How Real Estate Agents Work in Mumbai
Real estate agents are professionals who help connect clients – buyers and sellers – based on their requirements and preferences. In Mumbai, agents facilitate the process of buying, selling, or renting properties by straddling different types of market segments such as commercial and residential property, lease market, primary sales, and secondary sales market. Approaches and procedures of real estate agents while working massively depend on local market complexities.
The business is organized at different levels. Some top-end agents in Mumbai use a variety of technology to manage their database. Additionally, such agents post information to attract more potential clients. There are certain legal and ethical responsibilities an agent has. An agent who has a house to sell must give a client interested in buying the house accurate information regarding its age, location, and ownership. Untruth in this regard has led to court cases against agents.
Nearly all real estate deals involve considerable bargaining. The agent must have excellent communication and negotiation skills to close the deal in a favorable way. Estate agents also refer clients to lawyers who provide a full range of services, including real estate law and litigation work. Agents are not lawyers and must not give legal advice.
Mortgage brokers also work in connection with real estate agents. Real estate agents must also understand the marketplace. Since real estate can be a boom and bust, you need a good eye for the market, including when buyers will increase and decrease their investment. You must also be able to guess what the property is worth and how it needs to be dressed to make improvements while you are selling it.
Real estate agents must also understand their clients’ needs, worries, and the involvement of the seller willing to put the house on the market. Finally, the agent must be patient, as it takes time to build an effective strategy.
Real estate agents in Mumbai have to be quick and dogged in their approach. Every client is different with a different requirement and the capability to invest in real estate. The markets are dynamic and rapidly change. In order to survive in the real estate markets, agents must be flexible and adaptable, changing tactics and strategies at the drop of a hat.
3. Types of Compensation for Real Estate Agents
The compensation for real estate agents in Mumbai can be split into three types: commission, flat fee, and retainer. The commission model involves payments that are typically a percentage of the transaction value. Because this model is widely popular and accepted in the Indian market, the inquiry focuses on alternatives, especially flat fee and retainer payment arrangements. There can be variations within each of these categories, and a combination of the three is also possible.
The commission model is arguably the simplest and most straightforward compensation scheme. As a general rule, the remuneration that an agent receives under commission is a fixed percentage of the value of the property sold or leased.
The predominant view in the industry is that market conditions do not have a significant impact on the established percentage rate. The percentage is a historical factor and is excessively high. The primary drawback of the commission model is that remuneration is highly variable and may be profoundly impacted by macroeconomic factors.
The income of real estate agents, in general, is noted to vary from month to month, and even from one year to the next. This problem intensifies if properties remain unsold for long periods of time. This makes financial planning difficult. Although several respondents indicated that a few agents were motivated by service rather than financial rewards, it was generally agreed that high remunerative possibilities were an uncommon motivational factor.
What a Real Estate Agent Does
Real estate agents are the lifeblood of the real estate industry. In India, the role of the real estate agent, also known as a real estate broker, is regulated by the Real Estate Regulatory Authority Act. Real estate agents perform important tasks in the purchase and sale of real property.
They analyze market trends, provide home buyers with guidance, and negotiate with home sellers. Real estate agents represent their clients in purchasing, selling, leasing, or renting properties. Real estate agents offer services that help clients buy, sell, and rent property as well as provide general advice and guidance.
Real estate agents help individuals buy a home, landlords lease a rental property, and companies locate space to use for business purposes. Most agents in Mumbai focus on either purchasing, selling, leasing, or renting. In selecting a real estate agent, consumers take into consideration the professional’s experience, customer service, and fees.
Real estate agents in India typically charge a commission or brokerage fee based on a percentage of the property’s sale price and rent amount.
Real Estate Agent vs. Real Estate Broker
In order to correctly understand what real estate agents in Mumbai do, it is first essential to appreciate what differentiates real estate agents from real estate brokers. The principal difference between a real estate agent and a real estate broker is based on the latter’s being allowed to own or manage a real estate company, while a real estate agent is not. Only real estate brokers can run companies and employ salespersons.
This allows real estate brokers to engage in a wider range of real estate activities compared to real estate agents, such as operating a real estate agency, handling escrow money, and working independently, buying and reselling property. A real estate broker can operate as a real estate agent, but if the broker decides to do so, he or she is expected to do so in the name of the brokerage using his broker’s license.
Second, both a real estate agent and a real estate broker are required to conduct a number of real estate activities in partnership with lawyers and business executives with requirements like a high school diploma or associate’s degrees in real estate.
However, most people involved in the leasing and sales of real estate start out by working at a sub-brokerage either in sales or early management positions. To help in the process, a College of Real Estate offers real estate knowledge programs. Third, a real estate agent must be able to provide advertising signs and show homes, manage documents, and attend to a number of other important tasks depending on his or her specific role, as well as meeting the required licensing and continuing education requirements.
The role of a real estate agent in Mumbai includes providing various services to commercial and residential real estate, including appraisal, development, and financing, depending on the specific role they are hired for. Fourth, a real estate agent works in exchange for a commission earned when the agent successfully sells or purchases a piece of real estate, while a broker manages both real estate transactions and handles business and clientele.
The broker will generally receive separate fees from the sale of the property and has to compensate for representation. A real estate agent, for example, may not enter into an agreement with his or her broker to be paid separately for management services and is not allowed by his or her broker to earn a separate fee for brokerage services in connection with the sale or purchase of real estate.
Real Estate Agent vs. Realtor
What is the difference between a real estate agent and a realtor?
While both real estate agents and realtors are licensed to buy, sell, and rent properties, a realtor is a member of a private association that requires members to adhere to certain criteria.
This criteria includes articles that mandate professionalism and a code of ethics, which in turn strictly supervises realtor behavior. Members often display the term ‘realtor‘ or ‘realtor associate’ in connection with their name and company. Other services they offer include a Multiple Listing Service, which collects information, and then the agent compiles the data and disseminates it to other agents.
They also coordinate and compile several supporting paperwork, documents, and agreements based on both seller and buyer needs.
In India, realtors are referred to as real estate agents, more commonly known as property dealers, property brokers, and real estate brokers. The term realtor is not widely understood nor employed in India.
These real estate agents in Mumbai are very similar in terms of their work contracts. Realizing the significance of property brokers or real estate agents in Mumbai, the Real Estate Regulatory Authority in Maharashtra has initiated the process of implementing a model form of agreement for the sale and purchase of apartments, plots, and commercial real estate.
This move is a positive outcome of the continuous and enduring struggles among the real estate agents and luxury real estate builders in the state and especially in the city of Mumbai.
What Is a Real Estate Professional?
What is a real estate professional? There are many people whose profession exists only because real estate development and transfer of ownership play a significant role. Let’s take a quick look at some of them. Back in the days when inactive real estate investment could result in capital appreciation, time and money to be invested were the primary decisions for an amateur investor.
A professional real estate agent marketed the properties and acted as an adviser to assist in establishing fair exchange terms and, in some cases, to offer an appraisal of market value as an independent third party. When marketing involved more than neighbors, the real estate agent typically paid a commission to informal sales agents acting as couriers.
In modern tax-deferred exchanges and protective equity trust transfers, a third party with a significant ownership interest performed the third-party facilitation for little more than the cost of messenger fees. Realtors have efficiently adopted these small companies that acted in the best interests of opposed parties.
Regulatory requirements and market demand placed an emphasis on honesty and integrity, independence from undue conflict of interest, and possibly some form of liability insurance. Many professional agents could have different business specialties because of inefficient market knowledge.
4. Challenges Faced by Real Estate Agents in Mumbai
The Mumbai real estate market is a highly competitive environment. For the majority of the individual brokers operating in the city, obtaining clients interested in buying or leasing apartments is a significant hurdle.
Moreover, the brokers have to put up financial and human resources to facilitate lead generation. The inherent nature of brokering in real estate is such that outcomes are never guaranteed and can often lead to frustration.
The bureaucracy and complexities of the real estate laws are discouraging. The sums agents earn vary widely according to market trends. For example, an agent may find a buyer for a property valued at ₹2 crore in the morning, which was listed at 3.5% brokerage of the asset price, which added ₹7 lakh commission to its profits. A property may become unsellable only a few hours later because market values are determined by demand and supply. Or market values may shift due to global economic fluctuations.
A real estate broker’s knowledge of market patterns always requires an update. For instance, at the start of the year, the pandemic situation was turning better and so NRIs were heavily investing in real estate. However, as the cases surged, home buyers began seeking smaller apartments on the outskirts of the city in anticipation of a third wave.
At the same time, people began shifting towards basic amenities such as hospitals, schools, and workplaces and demanded homes closer to these areas. As a result, a shift was brought in by a declining market. The Mumbai real estate market is a resilient environment where brokers must not wallow in disappointments and channel those feelings towards achieving targets. Life is constantly changing, and so is work. A middleman must be adaptable.
