by THEPROPZY 
The real estate sector in India is one of the largest contributors to the economy and is expected to reach a market size of $1 trillion by 2030. Despite this rapid growth, the brokerage system in India remains fraught with numerous challenges that hinder the experience for both buyers and sellers. Below, we delve into some of the major issues plaguing the real estate brokerage ecosystem in the country and discuss potential solutions.
Lack of Regulation and Standardization
One of the most pressing issues in the Indian real estate brokerage market is the lack of proper regulation and standardization. Unlike other professions, there is no mandatory licensing system for real estate brokers in many states. This leads to:
The entry of unqualified individuals into the profession.
Unethical practices such as misinformation about property prices and hidden charges. The Real Estate (Regulation and Development) Act (RERA), introduced in 2016, has been a step in the right direction. However, its implementation remains inconsistent across states, leaving room for malpractice.
High Brokerage Fees
In India, brokerage fees often range between 1% to 2% of the property value, which can be a significant amount, especially for high-value transactions. This system is opaque, and there is often little negotiation or standardization in the rates charged. Additionally, customers frequently report dissatisfaction with the services provided in return for these high fees.
Lack of Transparency
Transparency remains a significant concern in the Indian real estate brokerage sector. Common issues include:
- Brokers not providing complete information about a property.
- Misrepresentation of property conditions, legal clearances, or amenities.
- Dual representation, where brokers act in the interest of both buyers and sellers without proper disclosure.
- Such practices erode trust in the brokerage system and often lead to disputes or financial losses for consumers.
Digital Disruption and Resistance to Change
The advent of technology and digital platforms has transformed the way real estate transactions occur globally. In India, online platforms such as ThePropzy have gained traction, offering consumers more control over property searches. However, traditional brokers often resist this change, fearing a loss of business. This has led to a fragmented market where digital solutions and traditional brokerage systems often clash rather than collaborate.
Limited Knowledge and Skill Development
Many brokers in India lack formal training or a deep understanding of market trends, legal aspects, and customer relationship management. This gap results in poor service quality and difficulty in navigating complex transactions. Unlike in developed markets where real estate agents undergo rigorous training and certification, India’s brokerage industry does not emphasize skill development.
Due to the aforementioned issues, there is a significant trust deficit between brokers and consumers. Many potential buyers and sellers prefer to rely on personal networks rather than professional brokers, limiting the growth and professionalism of the sector.
