How To Squeeze Better Deals On Your Home

Raghu Nathan, a Mumbai-based executive, decided he had had enough of living in company-leased accommodation. His reasoning: while his company paid a pretty penny to lease the flat on his behalf, for a similar monthly cost he could easily buy a flat that would become his once the loans were paid off.

He located a property in Thane, a leafy suburb of Mumbai with good road and rail connections to the city, and went to the builder to negotiate a price.

While he was okay with the price quoted, a few days before actually clinching the deal he called up a well-known property broker to check whether flats in the same complex would be cheaper if bought from an existing owner. He struck it lucky.

This is what happened to Nathan (not his real name). While the builder quoted a price of Rs 13.5 lakh for a two-bedroom flat, the broker said he could get the same place - and not a second-hand one - for around Rs 13 lakh. Even after adding his brokerage fees of Rs 26,000, he would still save Rs 24,000 on the deal.

Question: how can a broker undercut the builder? Answer: Nathan did his own check and discovered that the broker had done bulk booking with the builder for a steep discount. He could thus offer the property at better rates than the builder himself.

Across most metros in India today, block deals of this kind are growing by the day. Sometimes, the deals are tied with property brokers; at other times with housing finance companies. Sometimes with both.

But for canny property buyers, this presents an opportunity to shave a few thousands off costs. Many such bargains are available during property melas organised by builders and housing finance companies.

Few property markets are as price-sensitive as the Kolkata one. With individual buyers looking for better and better bargains, and that too not too far from the city centre, a new breed of pure property brokerages has sprung up to enable buyers in the city to home in on the right property at the right price and location.

What are pure property brokerages? Well, they are basically brokers who book/buy properties in bulk from various builders and developers. They then find buyers from the public for these properties. Usually, these brokers do not do other kinds of brokerage: for example, if you approach them to sell your house, they may not show great interest.

Such brokerages offer two advantages - superior information and range and a price discount.