why stock brokers should join real estate broking

Download Why Stock Brokers should Join Real Estate Broking

Post on 24-Jan-2015

1.149 views

Category:

Real Estate

2 download

Embed Size (px)

DESCRIPTION

 

TRANSCRIPT

  • 1. WHY stock brokers should do Real Estate broking?
  • 2. 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.
  • 3. What is the number 1 threat to a Stock brokers business?
  • 4. 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
  • 5. 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
  • 6. Some comparisons
  • 7. 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
  • 8. 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
  • 9. 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
  • 10. 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
  • 11. 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
  • 12. 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. Gujarats 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
  • 13. What does a buyer want? Inventory Agent time Guidance Saving of his time Quick Closure
  • 14. What does a seller want? More genuine buyers Get best price for his property Liquidate at the earliest Agents time Guidance of valuation Relevant buyers consider his property
  • 15. Why a broker cannot satisfy? Getting and retaining best employees Training Advertisement Budget No Surety of Income Limited budget for Running costs Network
  • 16. Why employees dont stay? Employer gets the lions 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
  • 17. 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
  • 18. 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
  • 19. 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.
  • 20. 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 dont have time Buyers can be outside city or even country. Buyers want to share information with others
  • 21. 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
  • 22. 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.
  • 23. What makes a profitable business?
  • 24. Which business is more profitable? More number of property options for customers OR Less number of property options for customers
  • 25. Which business is more profitable? A well trained agent OR Untrained assistants / employees
  • 26. Which business is more profitable? Latest technology to market their properties OR Doesnt use technology to market their properties
  • 27. Which business is more profitable? A large international network OR A stand alone operation
  • 28. Which business survives longer? With lower recurring cost OR When recurring cost is high
  • 29. Which business is more profitable? Is in Business since long OR Just opened
  • 30. Which business is more profitable? Running based on a proven concept globally OR A office started without any proven concept