Starting a new real estate brokerage business in India? We (mis)guide you (not)!

You can see that the real estate market in India is booming. Homes are selling each day by the dozens. You have heard success stories of small time brokers buying themselves mercs and beemers! You have done some research on the way a brokerage business works and have even met a friend who is a developer himself. You are very upbeat about starting a new brokerage business in India.

If you are reading this, we urge you to go through the whole page and consider our myth shattering discussion. It is not about discouraging you, as an entrepreneur. We need more people like you. It is just about being better informed, which, as a businessman, is the biggest tool you need to be successful. Let us lift the sledgehammer then;

1) Let us start and we will learn as we go: You have been a businessman always. You know the way this works and you have the financial strength to start up and sustain a new real estate brokerage business in India. The model is very easy. You get a smart sales team. A small, swanky office. You tie up for selling rights with a few developers and release a few adverts. You are sure people will call back and they do! You are rolling.
This WILL NOT happen in real life. If you do not have prior real estate experience and have yourself not been through the roles of a real estate sales dude in your past, we suggest you do not waste your time and money starting up a real estate brokerage business. Stick to your domain of expertise. Flourish!

2) Manpower is the key and I can buy the best: Every business is about the people who run it. It is about the relationships you create as you conduct your business. It is about the skills you bring to the table jointly. It is about the friends you make out of the business and not the other way round. So you interview some blokes. Get bowled over by the way they present themselves and are convinced that you are building the best real estate brokerage team. Another myth. Why would the best professionals in the real estate industry in India work for you? Do you have an established brand? Are you an icon in the real estate brokerage business? Do you have a real estate related business already which people know and respect? Your answer to these questions would be a 'NO'. Also, since you are a shaky start up (trust us, you will start strong and will go downhill each day!), chances are, you will not be paying as much as the other established brokers. You can NOT build the best team right from the start. Thus the importance of point number 1. Rely on your own strengths. If you don't have expertise, look at another business line. Save yourself the heartache.

3) I have money. I will start up with a lot of branding with adverts in newspaper and OOH modules. Developers will notice and come to me for business: How we wish that was true. That is a crazy amount of money down the drain. Your ad agency, however will convince you that it can be done. They are the dudes who will be laughing all the way to the bank. At the end of the campaign, every developer will know your brand but no one will give you any business. Period.

4) I have a lot of friends who are active real estate investors. They have promised me business. I can start up and make it big just servicing them: Lets go back to point number 1. Why would they invest with you? Do you have the best investment options as a start up? Remember, good developers with rapid appreciation projects will not give a start up real estate brokerage business like your's any business. Unknown developers will not attract any investments from your friends. You just drew a Venn Diagram where the two circles are thirty miles away. 0/10. Next surprise test is on Friday the 13th, students!

5) I am going to start up with this amazing land deal that I have come to know through a reliable source. Its a hot cake: Man, you just cracked all of us. Our whole office is booming with laughter and people are falling off their chairs! Need we tell you more?

6) I have 5 good salesmen. That is 25 sales a month minimum. That is INR 12.5 lacs in brokerage and growing! I have struck gold: Let us edit that statement for you using the REALESTATEINREALLIFE software version 2011. You have 5 stupid guys who could not find work. They will give you 2 sales a month after 6 months of struggling. 1 of those sales will cancel out. The billing and brokerage for those sales will take a year to materialise. By then, you will have lost enough money and steam to continue. Is that explanation clear. Darn, we need to patent that software we just mentioned!

7) The lucky number: If you are still reading this page, chances are, that you are the man. You have years of real estate experience in the Indian market. You have struggled and closed many sales in your career. You are smart, honest and hard working. You have great presentation skills. You are willing to start alone, work like a mule, give in to the whims of builders, other brokers and your customers. You are willing to forego your hard earned money once in a while to a builder who won't pay. You think 5 years is no time at all for a new real estate brokerage business in India to flourish. We say go ahead and do it. You will succeed.

For the serious dude, point number 7 is the way to go. The others are just myths. We tell you this out of hard core experience!

8) Okay. So billing and revenue takes a year. I can quickly start making money by setting up a specialized resale properties team. That is an instant 2% revenue: Buddy, you have a death wish. Hey! Has the lunch arrived or what?

Want to discuss this topic? Or start your own topic on the broking business?

Related articles: You may also like to read -

1) The key to being a successful broker in India

2) How to launch a new real estate project in India. The checklist