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Who earns more? Stock brokers or Real Estate brokers?

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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

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

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  • 1. WHY STOCK BROKERSEARN LESS THAN REALESTATE BROKERS?Manan ChoksiRegional DirectorRE/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 1THREAT TO A STOCKBROKERS’ 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
  • 6. SOME COMPARISONS
  • 7. 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
  • 8. 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
  • 9. 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.
  • 10. 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
  • 11. Why real estate broking?• Name 5 National stock broking companies• Name 5 Financial institution• Name 5 Real estate broking companies
  • 12. • 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
  • 13. • 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
  • 14. What is a real estate brokingbusiness?• Broker is a party that arranges transactions between a buyer and a seller, and gets a commission when the deal is executed.
  • 15. Each property is UNIQUE
  • 16. What does a buyer want?• Inventory• Agent time• Guidance• Saving of his time• Quick Closure
  • 17. 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
  • 18. Live Demonstration• Each participant has one card showing number / alphabet• They have to match:• 1-A• 2-B
  • 19. Why a broker cannot satisfy?• Getting and retaining best employees• Training• Advertisement Budget• No Surety of Income• Limited budget for Running costs• Network
  • 20. 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
  • 21. 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
  • 22. 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
  • 23. TECHNOLOGY: HOWIMPORTANT?Example of A listingProperty 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.
  • 24. 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
  • 25. 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
  • 26. How will real estate broking look in next10 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.
  • 27. WHAT MAKES A PROFITABLEBUSINESS?
  • 28. Which business is more profitable? More number of property options for customers ORLess number of property options for customers
  • 29. Which business is more profitable? A well trained agent OR Untrained assistants / employees
  • 30. Which business is more profitable? Latest technology to market their properties OR Doesn’t use technology to market their properties
  • 31. Which business is more profitable? A large international network OR A stand alone operation
  • 32. Which business survives longer? With lower recurring cost OR When recurring cost is high
  • 33. Which business is more profitable? Is in Business since long OR Just opened
  • 34. Which business is more profitable?Running based on a proven concept globally ORA office started without any proven concept
  • 35. Which business is more profitable? A system driven model OR A person driven model
  • 36. Verious Real estate companyenter in to indian Real estatebroking Business
  • 37. GIVING YOUR BUSINESS THE RE/MAX LEVERAGERE/MAX India
  • 38. 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 GREATNESSRE/MAX India
  • 39. - Real Estate Maximums REFLECTIONS OF GREATNESSRE/MAX India
  • 40. RE/MAX did house sales of more than $500 bn. If RE/MAX was a company, we would be bigger than WALMART REFLECTIONS OF GREATNESSRE/MAX India
  • 41. GLOBAL RECOGNITIONRE/MAX India
  • 42. BRAND NAME RECOGNITION RE/MAX is #1 The most recognized logo in real estate REFLECTIONS OF GREATNESS 43RE/MAX India
  • 43. THE ICON IN THE INDUSTRY REFLECTIONS OF GREATNESS 44RE/MAX India
  • 44. Business Model: A business model working successfully in more than 7000 offices and created millions of entrepreneurs worldwide REFLECTIONS OF GREATNESSRE/MAX India
  • 45. Only real estate company to feature in the book “50 Companies That Changed the World” by Howard Rothman REFLECTIONS OF GREATNESSRE/MAX India
  • 46. World’s largest Real Estate brokerage franchising network…! REFLECTIONS OF GREATNESSRE/MAX India
  • 47. ABILITY TO DO BUSINESS IN MORE THAN 88 COUNTRIESRE/MAX India
  • 48. OPERATING IN 105 REGIONS IN 88 COUNTRIES
  • 49. Network... 88 Countries 7000+ Offices 100,000+ Agents 12,00,000+ Transactions REFLECTIONS OF GREATNESSRE/MAX India
  • 50. Network… 23 Regions 100+ Offices 450+ Agents 8 Transactions/day REFLECTIONS OF GREATNESSRE/MAX India
  • 51. EDUCATION & TRAININGRE/MAX India
  • 52. More than 25,000 hours of training in India done REFLECTIONS OF GREATNESSRE/MAX India
  • 53. CONFERENCES & CONVENTIONS REFLECTIONS OF GREATNESSRE/MAX India
  • 54. TECHNOLOGYRE/MAX India
  • 55. WWW.REMAX.COM 1 Million Unique Visitors per month World’s largest visited real estate website REFLECTIONS OF GREATNESSRE/MAX India
  • 56. TOOLS TO GROW YOUR BUSINESS REFLECTIONS OF GREATNESSRE/MAX India
  • 57. 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 REFLECTIONS OF GREATNESSRE/MAX India
  • 58. BROKER OWNERS OF AHMEDABAD REFLECTIONS OF GREATNESSRE/MAX India
  • 59. BROKER ASSOCIATES OF AHMEDABAD REFLECTIONS OF GREATNESSRE/MAX India
  • 60. ACHIEVEMENTS RE/MAX Bangalore Franchise does landmark transaction REFLECTIONS OF GREATNESSRE/MAX India
  • 61. ACHIEVEMENTS  Lodha World One REFLECTIONS OF GREATNESSRE/MAX India
  • 62. ACHIEVEMENTS  Godrej township REFLECTIONS OF GREATNESSRE/MAX India
  • 63. 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 REFLECTIONS OF GREATNESSRE/MAX India
  • 64. 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 REFLECTIONS OF GREATNESSRE/MAX India

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