The Bangalore real estate market faces numerous challenges due to the prevalence of unregistered real estate agents. These agents significantly influence the dynamics of Bangladore's real estate landscape.
Interestingly, despite a generally sluggish national economy, the Bangalore real estate market has been in a remarkable state of growth. This boom, however, has given rise to various unethical practices in the city.
If one observes how properties are bought, sold, and rented in Bangalore, it's clear to see the impact of this booming market. The influx of middle-class and upper-middle-class job seekers has dramatically increased property prices in the city.
In the last decade, property prices have surged three to four times. Despite the staggering costs, interest in acquiring Bangalore properties remains high, with many eager buyers seeking their chance to own a piece of this city.
However, our focus here is on the method of property sales. A recent experience from a doctor trying to sell his house sheds light on the frustrations caused by self-styled “real estate agents.” These individuals frequently demand a commission without providing substantial assistance in the sales process.
Despite needing to earn their share, the services offered by these agents often border on the non-existent or are downright embarrassing. Many agents promise to connect sellers with potential buyers, only to collect their fees and disappear without further engagement.
In numerous instances, they introduce buyers without prior discussion with the property owners, leading to a lack of successful sales. Many homeowners ultimately resort to placing advertisements in newspapers to find buyers themselves.
So how do these real estate agents operate? It's quite concerning. A substantial number do not even maintain an office. When asked about their process, one remarked, “idhu maduvadhukke, namake ondhu mobilu sakku…..” which translates to “We only need a mobile for this.”
The roster of these self-proclaimed agents includes individuals from various backgrounds such as cooks, auto drivers, security guards, and even sweepers. For many, the earnings from real estate transactions can exceed their regular income from their primary jobs.
Most operate in small groups, allowing them to share information regarding sales and rental properties available in the area. Their fees vary as well; typically, sellers pay about 2% of the sale price while renters usually incur a one-month rental fee.
According to Sumit Jain, co-founder and CEO of CommonFloor, these agents exploit the gap in knowledge between sellers and buyers. He pointed out the absence of comprehensive real estate websites that could offer insights into market conditions in different areas, a void that these agents are all too willing to fill.
Jain also noted the influx of professionals from diverse fields moving into real estate consulting, as the profession has no stringent training or qualification requirements. This attracts more individuals into the field. His company estimates there are approximately 3,000 real estate consultants currently operating in Bangalore, and around 17,000 in Gurgaon in the NCR region.