WHY stock brokers should do Real Estate broking?

Agenda:

•Stock broking current scenario •Why real estate broking? •What is a real estate broking business?•What are the new trends in this business?•How will real estate broking look in next

10 years?•What makes a profitable business?•The RE/MAX Concept.

What is the number 1 threat to a Stock brokers’ business?

Stock broking current scenario

•Average Daily volume falling ▫From a peak of 14,000 crore to ?

•No Differentiation between brokers •Value addition to customer •Internet broking eating in to market share

Why real estate broking?

•Net worth share in asset class in %:▫______ stocks (at current Prices) ▫__________is in Real estate▫Gold , Bank deposits, Mutual Funds,

Insurance, etc. •Name 5 National stock broking companies •Name 5 Financial institution •Name 5 Real estate broking companies

Some comparisons

Comparison as an Asset Class

Equity Real Estate

• Highly volatile • Liquid • Coupled with foreign

markets• Market prices determined

by handful of FIs

• Stable • Not easily liquid able• Relatively decoupled. • Market prices determined

by local economies and domestic conditions

Stock Broking Real Estate Broking

• No local knowledge necessary

• Exchange is your network• Low commission per

transaction

• Local knowledge very much important

• You require the network to be built

• High commission per deal

Revenue per transaction

Stock Brokers Real Estate

• Average transaction size of Rs. 20,000

• Say a 0.50% commission • Total revenue: Rs.100• So you need 2,000

transactions to get 2 lakhs.

• On a deal of 1 crore:• A commission of 2% • Total Revenue: 2 lakh

Return on Time invested

Stock Broking Real Estate Broking

• Upto the minute updates on the stocks you trade

• Highly disciplined job of 9 to 4

• Back office work there after

• Less updates to track• Work on your own

schedule • Less number of

transactions so less back office work

• Number of brokers in Ahmedabad: Approx. 10,000 active.

• Number of deals : 10,000-12,000 registrations a month

• Estimate of primary deals being done by brokers: 50%- 60% (increasing as number deals reduce)

• Investors from all India have invested in Gujarat

• With Tata Nano, Ford, Peugeot setting up plants in Gujarat, real estate is going to be in demand

• Migration of people to cities is set to grow: 70% of India still stays in villages.

• Gujarat’s GDP is growing faster than the rest of India since 3 or more years.

• 3 of the top 100 growing cities in world are in Gujarat

• Number 1 city : Ahmedabad

• Best state: Gujarat in Real estate transparency survey 2011

What does a buyer want?

•Inventory •Agent time •Guidance•Saving of his time•Quick Closure

What does a seller want?

•More genuine buyers•Get best price for his property•Liquidate at the earliest•Agent’s time •Guidance of valuation•Relevant buyers consider his property

Why a broker cannot satisfy?

•Getting and retaining best employees •Training •Advertisement Budget•No Surety of Income•Limited budget for Running costs•Network

Why employees don’t stay?

•Employer gets the lion’s share of income•Boss gives little value addition to each

deal once the employee becomes experienced

•Lack of independence •Lack of Personal Identity •Limited office growth

Get access to HNI/NRI clients?• Get relevant training and provide good service.• Get properties which they would prefer:

▫ 100% white for NRI ▫ Give a good ROI for HNI

• Provide a experience to client to gain trust• Use technology extensively

How to increase deals?• Give more options to buyers• Employ more agents to serve the customer

better• Use technology to increase the viewers of the

property

Technology: How important?

Example of A listing •Property with an excellent view over

looking a river, sea and a hill.•Very upmarket locality. •3 bed room, fully furnished, good wood

work.•Parking for 2 cars.

Technology: How important?• Buyers require more information e.g.: floor

plan, elevation photos, views, amenities etc.• Cost of petrol increases so buyers prefer to

see properties over internet and short list rather than visit each and every option

• Buyers don’t have time • Buyers can be outside city or even country. • Buyers want to share information with others

What are the new trends in this business?• Role of Media

• Resale properties

• Dependence on agents as plethora of options emerge

• Technology

• Foreign investments : both ways

• White money

Real Estate broking will follow the foot steps of organized stock broking

• Earlier it was dominated by Mumbai based firms

• Then regional stock exchanges • NSE Came in to operation :

▫Technology ▫Risk Management ▫Franchising ▫Research

• Customer retention becomes the only important factor in determining your success.

What makes a profitable business?

Which business is more profitable?

More number of property options for customers

OR Less number of property

options for customers

Which business is more profitable?

A well trained agent OR

Untrained assistants / employees

Which business is more profitable?

Latest technology to market their properties

OR Doesn’t use technology to market their properties

Which business is more profitable?

A large international network

ORA stand alone operation

Which business survives longer?

With lower recurring costOR

When recurring cost is high

Which business is more profitable?

Is in Business since long OR

Just opened

Which business is more profitable?

Running based on a proven concept globally

ORA office started without any proven

concept

Which business is more profitable?

A system driven modelOR

A person driven model

Verious Real estate company enter in to indian Real estate broking Business

Giving your business the RE/MAX leverage

Established in Denver, Colorado (USA) in 1973 by –

Dave

Liniger

The only internation real estate broking

company still owned and operated by the

original promoter

- Real Estate Maximums

RE/MAX is the most successful network in the history

of the real estate industry

RE/MAX is the most successful network in the history

of the real estate industry

RE/MAX did house sales of more than

$500 bn.

If RE/MAX was a company, we would

be bigger than WALMART

GLOBAL RECOGNITION

Brand Name Recognition

RE/MAX is #1The most recognized logo in real estate

39

The ICON in the INDUSTRY

40

Business Model:

A business model working successfully in more than 7000 offices and created millions of entrepreneurs

worldwide

Only real estate company to

feature in the book “50

Companies That Changed the

World” by Howard Rothman

World’s largest Real Estate brokerage franchising network…!

Ability to do business in more than 88 countries

OPERATING IN 105 REGIONS IN 88 COUNTRIES

Network...

88 Countries 7000+

Offices 100,000+ Agents 12,00,000+

Transactions

Network…

23 Regions 100+

Offices 450+ Agents

8 Transactions/day

Education & Training

More than 25,000 hours of training in India done

Conferences & Conventions

Technology

www.remax.com

1 Million Unique Visitors per month

World’s largest visited real estate website

Tools To Grow Your Business

Offices in Ahmedabad1 Mr. Vivek Parikh Satellite RE/MAX Metro

2Mr.Nishant Makhija and Mr. Vinod

Makhija Vastrapur RE/MAX Real Estate Services

3 Mr. Anand Choksi Satellite RE/MAX Advantage

4 Mr. Ankit Patel, Memnagar RE/MAX Castlemore Realty

5 Tushar Gandhi and Mr. Hemant Gandhi S.G. Highway RE/MAX Vintron Gold

6 Nikul Patel Sardar Patel RE/MAX Achievers

7 Mr. Manish Shah and Mr. Upendra Shah Maninagar RE/MAX Real Estate Experts

8 Mr. Nirav Vakharia/Mr. Harit Parikh Stadium RE/MAX REALTY SOLUTIONS

Broker Owners Of Ahmedabad

Achievements

RE/MAX Bangalore Franchise does landmark transaction

Achievements

•Lodha World One

Achievements

Thank You