Gurgaon realtors increase commission twofold to expedite sales of inventory

On an average, real estate brokers nationwide receive a commission ranging from 2-4%, with those in the National Capital Region (NCR) often nearing the higher end of this spectrum

Gurgaon property developers have increased broker commissions twofold to expedite the sale of their under-construction and ready-to-move inventory, according to a report in Financial Express.

The report quoted the head of a finance company as saying, “Many developers are giving 7-8 per cent commission to brokers so that they get buyers fast, which will help them clear their inventory."

The report said that real estate brokers nationwide typically receive a commission ranging from 2 to 4 per cent, with those in the National Capital Region (NCR) often nearing the higher end of this spectrum.

Based on industry estimates, Gurgaon has witnessed the sale of at least Rs 5,000 crore worth of inventory in recent months, primarily comprising apartments priced between Rs 5-7 crore.

Additionally, in Gurgaon, many developers are waiving "flipping charges" or transfer fees to stimulate sales. This allows buyers to subsequently sell their apartments without the burden of registration concerns. Flipping charges are imposed when the original allottee sells a flat before its completion and handover to the buyer. The exemption of this fee facilitates quicker sales as it does not get transferred to the buyer's end price, the report said.

Sales in Gurgaon increased by 12 per cent

According to Anarock Property Consultants, despite a 57 per cent annual decline in launches, sales in Gurgaon have increased by 12 per cent, and unsold inventory has decreased by 35 per cent in the March quarter, totalling nearly 33,000 units.

According to the head of a private equity firm, real sales are not happening, and the sales that are happening are "parchi" sales, which implies a change of property ownership without a formal sale and without formal registration. “Many developers are selling these flats to underwriters at Rs 8,000 per sq ft, which in turn the brokers sell at Rs 9,000 or Rs 9,500 per sq ft. It’s nearly a 20 per cent margin for brokers,” the report quoted him as saying.

The report further quoted Santhosh Kumar, vice-chairman at Anarock Property Consultants, as saying that big developers are not doing this. “Bigger developers are not resorting to any tricks. But it is interesting to see who is buying so many flats,” Kumar said.