Wednesday, October 28, 2009

Good agents, bad agents

We all need them at some point of time. And they know it, but that doesn’t mean they take advantage of your (near total) dependence on them. In fact, a little clever work on your part can keep the agent’s work to a minimum while helping you select the right property at a good price.

But knowing who you are dealing with is not always easy, and several times, you realise you’ve been had only after the deal is struck and you’re committed. Most of the million agents we approached, both when we were looking to purchase and finally came back to renting, needed a swift kick in the seat of their pants. A tiny majority were thorough professionals, while just one gave us the confidence to broker a deal with him. Here’s how you get a good agent who will work for you:

#1: The agent must know which places to show
It works like this: you approach an agent and tell him/her your requirements. After which, if the agent is sincere and willing to work hard, he/she will consult his/her database and immediately give you about five options. Unless you’re proposing something totally outlandish, a good agent should be able to give you a good eight-ten options to choose from at the very first meeting.

#2: The agent must be willing to cover a lot of ground
Nobody expects house-hunting to be an easy, pleasurable experience, but it can be made so if your agent is well-organised and arranges site visits in direct accordance with the time at your disposal and your location of interest. I’ve seen agents not lining up the visits properly – with the result that you’re literally going around in circles and revisiting the same areas over and over, instead of finishing one locality completely before moving on the next.

Your agent must also be patient and willing to show you houses till his stock runs out. That you did not like anything showed to you does you no discredit, so don’t be afraid to state what displeased you about a certain house or if the price is too steep.

#3: The agent must never take sides
An unpleasant experience was had by one and all on two occasions early this year, when we were looking to purchase a house. We saw a house in the building that we currently live in, but the lady who owned the flat had some amount of loan she had not yet repaid. Besides, some vital documents were missing from the file she gave us through the agent, and that would have resulted in the bank not processing our application anyway. So imagine our surprise when, instead of telling the lady to give all the papers at her disposal, the agent told us off for asking for too many documents!

In the second instance, we had almost finalised a deal and went to visit the home owner, also a woman, with a cheque for the token amount. However, we realised on perusing the papers that the building did not have an Occupation Certificate (OC) despite being about thirteen years old. Now, that’s okay as long as you know the exact reason why the OC is not available. When we raised this query, the lady flared up and started giving us ‘gyaan’ about us not trusting her and whatever else. When we turned to our agent, he told us to stop fussing since most buildings don’t have an OC, which was not the point in the first place.

An agent must NEVER take sides. If I get the feeling that the agent is favouring the other party more than me, I am simply not going to deal with him, especially since he is going to charge me for his services.

#4: The agent must have a good network
Most agents work with other agents in showing houses and cracking deals. It is not always possible for one agent to cover an entire locality, so he/she enlists the help of other agents, and vice versa. However, be wary of paying to support this network: for instance, if an agent charges two brokerages for cracking a deal, ask immediately why you are being charged so. It is possible that instead of splitting his brokerage with the other agent, your agent is trying to help the other agent through your money.

#5: The agent must clearly state his terms
I find that some agents spring unpleasant surprises as the house hunt progresses. For example, he/she may insist on doing the stamp duty and registration process for you, naturally at a price. You will find that you can do the same for free if you take the trouble to find where the registrar in your locality is. You can know what to do simply by asking around there. If you do it yourself, you will only have to pay the registration fee.

The agent must also not bullshit you about the brokerage. Ask clearly what his expectations are and ensure that they are stuck to. Other terms such as taking possession of the flat, ensuring that all pending repairs are carried out before you move in and cheques cleared on time and receipts made out, are also tasks that agents must look into.

I respect agents who clearly state how much they will charge for services rendered, without being too open to negotiate.

#6: The agent must listen and work on your behalf
A good agent first starts the process by taking down all your relevant details. A good agent also calls the moment he/she hears of a good property on the market. If an agent does not know about a property on sale/ lease in the locality where he/she functions (even if that property is listed with another agent), I would not be very confident of his abilities. Reverting back to the point about an agent networking well, the agent must know within a few hours of a new property coming up for transaction, and inform you at once.

#7: The agent must not be nosy
This is tricky; agents must not be too aloof either. They are clearly told by their clients what they expect from the person they will deal with. For example, one building we saw a house in insisted on letting only vegetarians buy houses there, so our agent was obliged to ask us about our food habits. Another agent cocked an eyebrow at us when my husband said he was an Ashar and that I was a Lad; clearly he did not much like the mixed marriage aspect of the deal. That could explain the sniff.

One agent asked why I had not changed my maiden name after marriage, but he was merely trying to make conversation, I suppose. Many others looked at us quite offensively when we said we were married – probably looking for signs such as a mangalsutra or wedding rings – before telling us they would like to see our marriage certificate.

The idea is to not be offended, because the agent is only doing his job. Tell the agent to jack off if he/she crosses the line with a query that neither he nor his client has any business raising in the first place. How much money you make and what you propose to do with the house once you buy/ rent it is nobody’s business but your own.

#8: The agent must not nurse a grudge
It makes sense to enlist the help of more than one agent at a time, because that way you see a lot of places faster. However, I’ve seen some agents lose interest the moment they realise you’ve approached someone else simultaneously. I’m okay with them losing interest, but I cannot accept them not showing me enough houses after that. A good agent will also be smart enough to realise that he/she can’t have a happy ending for every person who approaches him/ her, and will not hold it against you if you approach him/her again later for another deal. If the agent seems cold or indifferent when you approach him/her a second time, don’t expect him to exert himself on your behalf.

Next: Why recce the new neighbourhood?

Money money...

A good thing to happen today was that some money due to me from the company I used to work for, was credited to my account. In the midst of hectic budgeting and keeping track of how much to pull from other accounts and how much to borrow and return, this was just great. At least a bulk of my financial fix is remedied while we struggled to get cash together for the new house.

In a week, I’ll be set to pay the deposit and relax a bit knowing the rent money is there, at least a big chunk of it.

I’m not saying all of us should wait around for windfalls, but people, if you’re making the move to a new house, please ensure all outstandings owed to you are settled now. This takes the pressure off in a big way; all of your earnings after that will only cushion you further.

In the absence of any outstanding cash inflow, however, there are still ways to manage your finances before you start signing cheques.

First, get the latest bank statements from all the accounts you have. I have three, of which just one is really active. I had no idea one of the remaining two had some cash in it, while the third used to be a salary account. Get a correct picture of how much money you have on you. You might also consider using a passive account to handle only the house money, so you don’t end up mixing those payments with daily living expenses. Ask your partner (if there is one) or a co-investor (if there is one) to do the same. Write down exactly how much money you can spare immediately.

Second, look for sources that will yield money right away. Maybe now is the time to tactfully remind that friend/ family member/ whoever else who mooched off you recently, to return your money since you need it desperately. Keep a track of how much you get through these channels.

Third, and this is a good idea if you’re purchasing your own property and need to keep cash in ‘black’, is to make a list of about twenty people who you can ask for money. This is a workable solution my husband’s boss told him to consider when we were looking to purchase. Don’t be flabbergasted when I say ‘twenty’; go ahead and put in as many names as you can. Why so many? Because you can ask for small loans which they might not refuse. You do the math: are twenty people you know well likely to refuse you a loan of Rs 5,000 (or a bit more) each? Twenty times five is 100, so that’s Rs 1,00,000 arranged just like that. If it’s a close friend, you can maximise the inflow by asking for Rs 10,000 or even more. This is a lot easier than asking big loans off about two people.

Fourth, make a list of people who will be able to float a big loan for you. A close friend who’s got the cash stashed away, a family member who wouldn’t hound you for the loan…don’t just sit there reading, make a list.

Fifth, if you’re purchasing a house, approach your bank with all the documents at your disposal to know your exact loan eligibility. Try and work out an in-principal approval (which is valid for three months) so you know how much you owe the bank as well.

Sixth, and this is not always easy to do, but try it anyway. Set aside all those clothes, utensils, furniture, sometimes electronic goods, and see if you can sell them off. Sell off all the newspapers, magazines, books nobody reads, empty glass and plastic bottles to the raddiwala. Gold jewellery you are not about to use can also help, but I would hang on to the gold just yet. It’s really your call, though. The money you raise can help in smaller payments, or simply tuck it away till you can put it to good use.

Seventh, and this is something I would do, is to try and work from home for extra cash. In fact, the money you can make from this source can help you a lot when making your monthly EMI payments to the bank, or settling a loan, or simply to pay the rent. This way, your regular job can help you live comfortably.

Eighth, get cracking.

Next: Getting a good estate agent.