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Key Differences Between A Property Broker And A Brokerage Firm
For a layman, it is not necessarily possible to know everything about the real estate or property they are interested in buying. Generally, people use the help of a real estate agent or broker or brokerage firm, so that they can purchase their dream home.
However, the property market is very vast, people commonly use broker and brokerage firm as replacements. It may seem like that broker or brokerage firm is the same but it is not. SBP Group is here to resolve your confusion and to give your brief idea about both so you can decide what is useful for you.
The following are key differences between both:
Functioning: The basic difference between these is their operation. In most situations, a property broker runs a one-man show or has a small team to help him in his business. He will normally have his services in particular localities of the area, knowing that it is a small team. Besides, one can find property brokers in metro cities, who only deal with particular housing developments.
On the other hand, a brokerage firm operates vast activities that can be national or even distributed across several geographies. A Brokerage firm can help you in finding commercial property across various places but a broker may not be able to help you with that.
In simple words, Brokers or real estate agents have a small area of operations. While Brokerage firms have a large area of operation.
Area Expertise: A broker is an expert only on the area they deal in. You can full information about the area form its local broker as they operate only in a limited area and can provide you with information not everyone has. An independent broker who has been operating a business for many years in a specific place would know the area like the palm of his hand. An independent broker can be best prepared to educate you of a location’s pros and cons.
Though the brokerage firms cannot provide you all-round information about a particular area as they have their business spread across the various place. The area of expertise from these firms is very limited.
Payment of Commission / brokerage: Broker & Brokerage firm both work on the idea of commission. At the point when they help a purchaser and dealer connect with one another and the two parties choose to take part in the exchange, everyone needs to pay a specific level of the property estimation as a charge to the broker or brokerage firm.
In India, the buyer and the seller are normally asked by individual property brokers to pay 2 percent of the sale value as their fee, often referred to as the brokerage fee. This means that the agent must receive Rs 1 lakh from the purchaser and Rs 1 lakh from the seller to enable a property deal of Rs 1 crore.
However, brokerage firms are often better positioned because of their sheer scale and ability to produce revenues and also lure buyers and sellers by providing concessions and waivers. Property brokerage companies also introduce discount deals for their customers in order to increase their market and consumer base.
Although not much waiver is given on the original commission fee, as part of the package, the brokerage firms offer the client several associated services for free.
Services Offered by Both: A brokerage firm is able to help you locate a property not only in one area but around the nation as it is operating a big corporation. It will also provide a number of supported services, usually supplying consumers with end-to-end solutions.
They even have builders’ tie-ups that can help the customer with a great price. In addition, certain builders start projects by exclusive tie-ups with brokerage companies and it is only possible to buy a property in that specific project if you were to pursue the services of that brokerage company.
Many brokerage agencies have connections with banks, which makes it far easier to get the home loan application accepted. Often, based on your particular preferences, they help you realise what home loan programme might be the right for you.
They also invest in technology that make it much easier to audit inventory, pay for it, etc. To help with the documentation, they also have a broad legal staff. Also, the website of a brokerage firm can draw purchasers, sellers and individual brokers. This suggests that a consumer has a wide number of properties to select from.
On the other hand, a Property Broker may or may not have any ties with banks or developers or law firms, depending on the sort of project that he manages. Thus, you will have to take extra care of all those parts of the buying on your own as you deal with them. But typically, they are in contact with local people who may or may not have listed their properties on online platforms and may assist you in locating good property.
RERA Registration: Individual agents and brokerage companies did not have to enroll with any authority until the implementation of the Real Estate (Regulation and Development) Act of 2016. This resulted in home buyers rushing from department to department to obtain help, when they were to be tricked, duped or poorly served by an agent / brokerage company. As RERA has been introduced, all real estate brokers are required to register with the respective real estate authorities in their states.
It is compulsory for both Property Broker and Brokerage Firm to register themselves with RERA.
For buyers / sellers now, the grievance process has also become much simpler. Buyers and sellers should therefore choose licence agents / brokerages in order to prevent any adverse business circumstance and to be confident that the broker / brokerage will be responsible for compensating them in the event of any misconduct.
Both of them have their own benefits, you can select which benefit suits you the best when buying a property.
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