How site rates increase!!!!!!!

[ravi19850511]

i was planning to buy a site and last week i met some of the brokers in BSK6th stage.
the price quoted by them was 3000-4000 per sqft. while coming back i noticed one of my relative was in the same area and was talking to some agents. i waited for sometime and after the agents left, i talked to them to figure out that the price quoted by broker to them was 2000 per sqft. i think the broker wanted to buy a plot by the "margin money". one more thing is that the broker was telling me "sir, u buy a plot now and i can resale it for 500 per sqft more in 6 months". i thought even if the area doesn't develop the brokers will increase rate from time to time and thus the owners. i felt some people are paying more than what actually sites are worth for!!!!!!!!!!!!

[neo_sat]

Hello Ravi,

As a fellow site-seeker in BSK 6th stage, I can understand your frustration. From your post, I am guessing that your relative owns a site in BSK 6th stage and was talking to agents about selling it.

From my experience, this is what happens in BSK 6th stage:
1. Prospective buyer calls RE agent and is quoted price of Rs. 3k-4k
2. Prospective seller calls RE agent and is quoted price of Rs. 2k-2.5k

Both the buyer & seller are not content and do the following:
Buyer calls another RE agent and poses as seller. When he quoted rates less than 2.5k, he is naturally taken aback by the price difference.
Seller calls another RE agent and poses as buyer. He is quoted a price >3k. This is used as a benchmark price to set expectations of the sale price. Nowadays, a lot of sellers advertise on the various websites quoting a premium of 200-400 on the rates already quoted by the RE agent. This is to offset any reduction in price during negotiations.

I entered into an agreement with a direct seller to buy a 50x80 site in Jan 2012 for Rs. 2150/-, but the seller backed out at the last moment citing that the website prices are in the range of Rs.2500/- & he wanted me to pay Rs. 2300/- ...Needless to say, I walked out of the deal because of ethical issues !

From my personal experience, I felt that it is better to deal with brokers than direct sellers if you can negotiate hard and beat them down on the price

[ravi19850511]

Yup ... good experience to share.
you know one of my friend had gone into an agreement for a site and before they could go for a registration(2 months time) site soon got into "BBMP" limits and suddenly its value got increased. As u can expect, the owner wanted to back off. all this happened even with the "Agent" or "broker" in between the two.....

Moral of the story:
1) Please make sure you judge ur broker or agent correctly.
2)Go for registration ASAP.

[blrsiteseeker]

Oh - I had some similar experience. Had found a nice plot in Vidyaranyapuram (through a broker), but had talked to the sellers also. They had agreed to a price of rs. 1200/sq. ft. I got the documents verified and we set a date for registration. I was just setting out from my home for the registration and at that time, the broker told me the sellers want rs. 1600. They knew that I was going to be leaving Bengaluru in 3 days and thought, out of sheer desperation, I would agree and settle. I just told them to keep their site and left it at that point. I bought my site 2 years later (of course by now the prices had gone up to what they had quoted), I still did not feel bad - because I felt I did not get rail roaded.

[venkyn]

What I learnt is:
- During the agreement time ensure to collect some original documents.
- Never tell your RE agent about your plans and financial status, always key low profile.
- Do not show off,
- Ensure to take some trusted people along with you who can negotiate well.
- Do not delay in registration, do it in 1 month.

This will ensure the seller and buyer interests.

[tvsh]

The broker quotes low rates to a seller and high rates to a buyer to set the expectation low. If the broker informs the correct rate, then the seller expects to get 100 to 200 rupees more and the buyer expects to buy the site for 100 to 200 rupees less than the broker quoted rate. This would make the broker's job of closing the deal much more harder. Moreover even within the layout, depending on the location, the rates vary. of course there are no dearth of greedy brokers who manipulate and make money. I was looking for a site for my brother and the rates varied from 2500 to 4000 rs per sft. Sites that were adjacent to a slum or a village were quoted much less and the roads on 80 or 100 feet roads were quoted much much higher.

I wish we had transparency in real estate and sites such as zillow, trulia, etc. were available for Indian real estate.

[murthyveda]

Hi,

You should expect such moves from the sellers. This is nothing new. So you should include bi-lateral clauses in the agreement that will deter the seller (and of course, the buyer) from backing off for small hike in the price. The damage can be 25% to 100% of the advance payed or some lumpsump amount, say, 1 lakh, depending on the total value of the deal and advance paid to the seller. That way, you can mitigate such moves where you would have invested your time and money. Of course it is a double-edged sword.

Regards
--Thyagaraj.

[blrsiteseeker]

Thyagaraj - in my case, it was such a quick closing. I saw the property on a thursday. Had discussions on both Friday and sat, agreed to close by next friday. So we did not do any sale agreement, went directly for closing. I had paid a rs. 1 lakh advance, but they had to refund that entire amount (no penalty for my backing out), since the conditions of the sale changed.

Best would be what tvsh said - have some transparency (as in the US we have all these websites that show closing price and so on which help buyers understand what is a fair price to offer, and keeps the sellers from getting too greedy in quoting a price (if they really want to sell that is))