Interesting article I came across in WSJ, to understand and realize why my business as property dealer is coming down and how I need to bring up the presence on internet.
A real estate 'consultant' with more than two decades of experience, K. Premsundar is a worried man. His business, a letting agency for low-end properties, has seen a big drop in the last two years. He says his clients have left him, choosing to place advertisements directly on the many real estate Internet portals and in neighbourhood dailies. Such advertising costs a fraction of the fee that, agents charge. Indiaproperties.com, an online real estate portal, allows owners to post their properties for Rs500 per listing, whereas if the deal is done through a broker, it would mean a month's rent as commission, from either the owner or the tenant. Others sites such as magicbricks.com and Sulekha.com also offer similar services. The portals allow for direct interaction between the property's owner or seller and a prospective tenant or buyer. "Online portals have impacted agents' business especially in the lower range. Their traditional clients have moved away," said J. Sohail Sarooshi, vice-president of the Chennai Real Estate Agents Association. The association, which has 60 members, was formed as an attempt to bring fair conduct norms into the industry, which is largely unregulated. For a sale, agents get a 3-4% commission on the value of the sale, and for a rental deal, they get 15 -30 days' rent as commission. "Real estate agents have so far thrived on information," said Naresh Malkani, chief executive officer of indiaproperties. com. "Now, the Internet provides the information." However, he said unlike booking travel tickets online, the "Internet is not going to replace agents, as the transaction has to be done physically". Agents now need to focus on services such as valuation, documentation, registration and field visits, he said. "We definitely have seen the advanced Internet user take advantage of the free online classifieds and other options. By interacting directly with other individuals, they have able to reduce lead time and costs", said Satya Prabhakar, chief executive officer of Sulekha.com, a portal that also lists properties. "It still may be a good idea to supplement this with the professional advice of local real estate agents". According to an estimate by Iindiaproperties.com, in cities covered by online portals, 40% of the total market, in terms of tproperty inventory, is listed on Internet sites. In the last six months alone, Malkani said, , there has been a 120% increase in listings. And, property for a monthly rent of between Rs5,000 and Rs20,000, the traditional bread and butter for letting agents, constitutes onethird of total listings on his website.
On Sulekha.com, Prabhakar said 80% of rentals are at Rs20,000 per month or below. Both individuals and real estate agents access the site. I Though the Internet is posing a challenge to agents, however, realized they can both co-exist. Agents, who pay an annual fee ~ of Rs10,000 to enrol as members, can list 100 properties every year, and provide onefourth of all listings on indiaproperties.com. Local real estate agents, especially smaller ones, Prabhakar said, are using online classifieds as a "platform to reach out to individuals who are looking for rental solutions in the niche areas that they operate in. The lower entry barriers and flexible advertising options have helped those who have been quick to adopt this." However, Premsundar, in his late fifties, has never used the computer nor browsed the Internet. He says he is too old to start now.
A real estate 'consultant' with more than two decades of experience, K. Premsundar is a worried man. His business, a letting agency for low-end properties, has seen a big drop in the last two years. He says his clients have left him, choosing to place advertisements directly on the many real estate Internet portals and in neighbourhood dailies. Such advertising costs a fraction of the fee that, agents charge. Indiaproperties.com, an online real estate portal, allows owners to post their properties for Rs500 per listing, whereas if the deal is done through a broker, it would mean a month's rent as commission, from either the owner or the tenant. Others sites such as magicbricks.com and Sulekha.com also offer similar services. The portals allow for direct interaction between the property's owner or seller and a prospective tenant or buyer. "Online portals have impacted agents' business especially in the lower range. Their traditional clients have moved away," said J. Sohail Sarooshi, vice-president of the Chennai Real Estate Agents Association. The association, which has 60 members, was formed as an attempt to bring fair conduct norms into the industry, which is largely unregulated. For a sale, agents get a 3-4% commission on the value of the sale, and for a rental deal, they get 15 -30 days' rent as commission. "Real estate agents have so far thrived on information," said Naresh Malkani, chief executive officer of indiaproperties. com. "Now, the Internet provides the information." However, he said unlike booking travel tickets online, the "Internet is not going to replace agents, as the transaction has to be done physically". Agents now need to focus on services such as valuation, documentation, registration and field visits, he said. "We definitely have seen the advanced Internet user take advantage of the free online classifieds and other options. By interacting directly with other individuals, they have able to reduce lead time and costs", said Satya Prabhakar, chief executive officer of Sulekha.com, a portal that also lists properties. "It still may be a good idea to supplement this with the professional advice of local real estate agents". According to an estimate by Iindiaproperties.com, in cities covered by online portals, 40% of the total market, in terms of tproperty inventory, is listed on Internet sites. In the last six months alone, Malkani said, , there has been a 120% increase in listings. And, property for a monthly rent of between Rs5,000 and Rs20,000, the traditional bread and butter for letting agents, constitutes onethird of total listings on his website.
On Sulekha.com, Prabhakar said 80% of rentals are at Rs20,000 per month or below. Both individuals and real estate agents access the site. I Though the Internet is posing a challenge to agents, however, realized they can both co-exist. Agents, who pay an annual fee ~ of Rs10,000 to enrol as members, can list 100 properties every year, and provide onefourth of all listings on indiaproperties.com. Local real estate agents, especially smaller ones, Prabhakar said, are using online classifieds as a "platform to reach out to individuals who are looking for rental solutions in the niche areas that they operate in. The lower entry barriers and flexible advertising options have helped those who have been quick to adopt this." However, Premsundar, in his late fifties, has never used the computer nor browsed the Internet. He says he is too old to start now.
And now after the success of the online presence the other vacuum of an online networking site to discuss the issues and concerns of real estate in general and specific is being attempted by propertymixer.com.
Propertymixer is much needed online platform required by the Real Estate Industry to make it a bit more organized and transparent. I am glad to see the kind of simple and straightforward approach used by the site and connecting to a variety of people in the global property business. It couldn’t have been easier.
All the best to the promoters of this site to bring knowledge sharing at the top.
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