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Key problems in the real estate industry and property market

CommonFloor Editorial Team

real estate aproblemsThe realty industry has various factors which affect its growth and downfall. From inflation to varied property prices, real estate is impacted to a greater extent. Here are some factors;

Scarcer inventories:

It so happens that the real estate brokers offer very less property options for the buyers even though there is enough build-up of inventory. However, the seller also has very lesser chances of getting the right price for his property as the property agents do not share their listings with other agents in the market. This in turn makes it difficult for the seller to liquidate the property. In most cases, the agent also tries to represent the buyer as well as the seller which eventually discourages both the parties from getting a right deal. Also, most of the agents fear of their inventory being used by other agents and hence do not work on exclusive mandates.

real estate problemsFewer leads:

They are one of the most important aspects while quoting a successful real estate brokerage practice. A real estate agent is unable to generate leads on properties on a regular basis due to the limited reach and capacity to serve the clients individually. Due to this, there is a constant issue of limited listings to serve the investors or finding the genuine buyers in the market.

Matching disputes:

As there is a lack of sharing of the inventory, the properties are advertised very rare and are seldom shared with other agents. The buyers are fewer exposed to properties and hence do not have an idea if their requirements match the criteria and their availability. The same issue is followed amongst the agents who work for the buyers, as they are unable to search for the properties which match their buyer’s requirements on various online real estate portals and other media sources.

real estate problemsThe advertising costs:

Most of the real estate agents are not capable of spending on advertising the property due to the insecurity of flowing income. Thus there is seldom advertising of properties by the real estate agents. On the other hand, the real estate agents in developed markets have higher advertising budget than any builders and they can also offer more options to the buyer.

No trained real estate brokers:

Starting up a real estate agency does not really require any specific prerequisite apart from just having a phone. Most of the real estate brokers are untrained and set up this business. Apart from just this, there is a lack of licensing of the real estate broking practise which eventually makes it difficult to regularize the entire brokerage practice and the manner in which it is conducted. It is very important that a real estate broker is trained well in his business as one has to know a dearth of practises and training programs in order to have a successful business.

real estate problemsStaff maintenance:

This is another major problem which most of the real estate brokers face. Working with the real estate agent, the staff member realises that there is no much input by the broker and hence is aware of all the tricks in the real estate. Also the real estate broker restricts his staff’s growth by paying him the least and a very little commission. This makes the real estate broker uncertain and he might start practising in a rival company with a better pay.

Staff monitoring:

It is very important that a real estate agent monitors his staff well as long as they are working under him as the staff will be getting a fixed salary irrespective of the deal being struck or not. Also the staffs have very less motivation as the extra transaction is limited without any special incentive.

Staff motivation:

Motivating the staff in this sector will result in the maximum level of productivity. This will also lead to better customer services and greater revenues along with more clientele. Perhaps as mentioned earlier, the real estate staff is seldom motivated as they do not have higher incentive structures.

real estate problemsSeldom agent recognition:

A real estate agent with a small office rarely gets recognition among his peers, associates colleagues or competitors in the industry. This leads to the constant unfulfilled need for recognition amongst the agents.

Limited network:

The real estate agent today has very less network all over and this restricts his ability to carry on with his deals even outside the area.

Lack of trust:

Every home buyer relies on a trusted agent only as he/she invest a huge amount on it. It is very important that a real estate agent is reliable and caters quality savings.

Lack of organisation in the market:

The property market is unorganised and hence there is no specific real estate data availability which can enable an agent to analyse past transaction numbers, know the amount of transaction or predict market movements.

Read more real estate articles
Why real estate should be given an ‘Industry’ status?
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