why stock brokers earn less than real estate broker for the same time they invest? learn more about the differences and the benefits of one over the other
Who earns more? Stock brokers or Real Estate brokers?
1. WHY STOCK BROKERS
EARN LESS THAN REAL
ESTATE BROKERS?
Manan Choksi
Regional Director
RE/MAX Mumbai Gujarat Maharashtra
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 % of Net worth is in Real Estate?
Net-worth Distribution
Real Estate
Stocks
Mutual Fund
Insurance
Gold
4. WHAT IS THE NUMBER 1
THREAT TO A STOCK
BROKERS’ BUSINESS?
5. 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
8. Comparison as an Asset Class
Equity Real Estate
• Highly volatile • Stable
• Liquid • Not easily liquid able
• Coupled with foreign • Relatively decoupled.
markets • Market prices determined by
• Market prices determined local economies and
by handful of FIs domestic conditions
• Inflation dents returns • Returns are hedged
• Not need based • Every one needs Real Estate
9. Stock Broking Real Estate Broking
• No local knowledge • Local knowledge very
necessary much important
• Exchange is your network • You require the network to
• Low commission per be built
transaction • High commission per deal
• Works 9 to 6 • Works at his own time
10. Revenue per transaction
Stock Brokers Real Estate
• Average transaction size • On a deal of 1 crore:
of Rs. 20,000 • A commission of 2%
• Say a 0.50% • Total Revenue: 2 lakh
commission • On a rental transaction of
• Total revenue: Rs.100 25,000
• So you need 2,000 • Commission of 1 rent.
transactions to get 2 • Total Revenue 25,000
lakhs.
11. Return on Time invested
Stock Broking Real Estate Broking
• Upto the minute updates • Less updates to track
on the stocks you trade • Work on your own
• Highly disciplined job of 9 schedule
to 4 • Less number of
• Back office work there transactions so less back
after office work
12. Why real estate broking?
• Name 5 National stock broking companies
• Name 5 Financial institution
• Name 5 Real estate broking companies
13. • 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
14. • With Tata Nano, Ford, Peugot 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
15. What is a real estate broking
business?
• Broker is a party that arranges transactions
between a buyer and a seller, and gets a
commission when the deal is executed.
17. What does a buyer want?
• Inventory
• Agent time
• Guidance
• Saving of his time
• Quick Closure
18. 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
19. Live Demonstration
• Each participant has one card showing number / alphabet
• They have to match:
• 1-A
• 2-B
20. Why a broker cannot satisfy?
• Getting and retaining best employees
• Training
• Advertisement Budget
• No Surety of Income
• Limited budget for Running costs
• Network
21. 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
22. 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
23. 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
24. 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.
25. 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
26. 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
27. How will real estate broking look in next
10 years?
• Earlier share broking was dominated by Mumbai based
firms
• Then regional stock exchanges existance
• NSE Came in to operation :
• Technology
• Risk Management
• Franchising
• Research
• Customer retention becomes the only important factor in
determining your success.
39. 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
REFLECTIONS OF GREATNESS
RE/MAX India
40. - Real Estate Maximums
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RE/MAX India
41. RE/MAX did house
sales of more than
$500 bn.
If RE/MAX was a
company, we would be
bigger than
WALMART
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RE/MAX India
43. BRAND NAME RECOGNITION
RE/MAX is #1
The most recognized logo in real estate
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43
RE/MAX India
44. THE ICON IN THE INDUSTRY
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44
RE/MAX India
45. Business Model:
A business model working
successfully in more than
7000 offices and created
millions of entrepreneurs
worldwide
REFLECTIONS OF GREATNESS
RE/MAX India
46. Only real estate
company to
feature in the book
“50 Companies
That Changed the
World” by Howard
Rothman
REFLECTIONS OF GREATNESS
RE/MAX India
47. World’s largest Real Estate brokerage franchising network…!
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RE/MAX India
48. ABILITY TO DO BUSINESS IN MORE
THAN 88 COUNTRIES
RE/MAX India
56. WWW.REMAX.COM
1 Million Unique Visitors per month
World’s largest visited real estate website
REFLECTIONS OF GREATNESS
RE/MAX India
57. TOOLS TO GROW YOUR BUSINESS
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RE/MAX India
58. OFFICES IN AHMEDABAD
1 Mr. Vivek Parikh Satellite RE/MAX Metro
2 Mr.Nishant Makhija Vastrapur RE/MAX Real Estate Services
3 Mr. Sumeet Sethi Nehrunagar RE/MAX First Choice
4 Mr. Anand Choksi Satellite RE/MAX Advantage
5 Mr. Ankit Patel Memnagar RE/MAX Castlemore Realty
6 Mr.Tushar Gandhi S.G. Highway RE/MAX Vintron Gold
7 Mr. Chetan Parikh Ellisbridge RE/MAX Milkatz
8 Mr. Nikul Patel Sardar Patel RE/MAX Achievers
9 Mr. Manish Shah Maninagar RE/MAX Real Estate Experts
Mr. Nirav Vakharia/Mr. Harit
10 Stadium RE/MAX REALTY SOLUTIONS
Parikh
11 Mr. Manan And Chintan Patel Bodakdev RE/MAX Mann Realty
12 Mr. Bhavesh Shah Thaltej RE/MAX Property Center
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RE/MAX India
59. BROKER OWNERS OF AHMEDABAD
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RE/MAX India
62. ACHIEVEMENTS
Lodha World One
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RE/MAX India
63. ACHIEVEMENTS
Godrej township
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RE/MAX India
64. AWARDS:
Among all regions of India North Gujarat won the
award for:
Best Broker Agent
Best Broker Office
Best Regional Office
Award was of return air ticket of Las Vegas to the
Annual RE/MAX Convention March 2012
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RE/MAX India
65. HOW TO JOIN RE/MAX ?
There are two options to be a part of the
revolution in real estate broking:
If you have an office or if you plan to buy one: join as
a Broker Office (BO) : Talk to Mr. Devansh Kothari for
appointment : 9879167987
If you want to work as a Broker Associate with a BO
then please talk to Ms. Salma Khatoon for
appointment: 9909066999
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RE/MAX India