Brokers are useful?

I live in Navi Mumbai (New Bombay) where the rules of the game are different for day to day living. I may sound a little like Raj Thakrey if I said this place has a more North Indian culture than a ‘amchi’ Mumbai culture (where I lived for 42 years before shifting to NM). Mumbai has a far greater business culture than NM. Almost everybody is in a hurry (God knows why) to do something. Autorickshaws (primary mode of transport in the suburbs) charge a minimum of Rs. 9 vs. Rs. 12 in NM.

One such breed of people who make a lot of money (a great opportunity for net based services at reasonable prices) are real estate brokers. Recently I had to take a flat on rent for my parents. The rent quoted was Rs. 16,000 per month, with a 10% escalation clause after 11 months. We did not bargain, so that was the final rate. However I baulked when the agent (she) said 2 months rent would be the brokerage and 1 month at the end of 11 months (for renewal).

I said that is too much, lets cut it by half. She said no, but I will speak to the landlord and reduce the rent. I would have normally paid her 16k as brokerage and Rs. 192k to the land lord as rent. Rs. 208k in all.

However, my broker reduced the rent to Rs. 14k per month. Which means now I have to pay Rs. 168k as rent and Rs. 28k as brokerage. My total cost now comes to Rs. 196. Thus my broker has reduced my total cost, protected her brokerage to a great extent.

Wov! a broker is really useful. Only thing is you should know what you are buying, what is the rate, and how much you are willing to wait. Then push real hard, if need be shove.

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