West of Mumbai’s Real Estate Market: Insights

Mumbai’s real estate market is a complex and dynamic landscape, often likened to the “wild wild west” by those who have experienced its challenges firsthand. In this article, we delve into the intricacies of the industry through the lens of Ravi, a seasoned real estate broker with over a decade of experience. Drawing from his wealth of knowledge and personal anecdotes, we explore the challenges, opportunities, and lessons learned in navigating this fast-paced and often unpredictable market.

Mumbai’s Real Estate

Mumbai, India’s financial capital, has long been a magnet for property investors and homebuyers alike. The city’s rapid urbanization, coupled with its status as a hub for business and entertainment, has fuelled a consistent demand for real estate. However, the market’s attractiveness comes with its own set of challenges, as Ravi explains:

In Mumbai, 5, 6, 7 crore property, many people come to visit. It’s weekend, we don’t have any work, we just visit a property. Okay. Many people come. Some people don’t have any work, they just come to visit.

This highlights the casual nature of property visits in Mumbai, where individuals often treat it as a leisure activity rather than a serious investment decision.

The Role of Real Estate Brokers

Real estate brokers play a crucial role in facilitating transactions between buyers and sellers. However, the barriers to entry and the level of professionalism vary significantly compared to other countries. Ravi shares his insights on the stark differences:

Brokers over there get paid like 6% commission 6% commission. You cannot open your own brokerage house till you do not pass an exam It’s a 6 months exam that you have to give in the US to become a real estate agent Once you become a real estate agent, you have to work for 3 years with a brokerage house. Oh damn! 3 years to work for a brokerage house.

This underscores the stringent requirements and regulations in place for real estate professionals in developed markets, which are largely absent in Mumbai.

The Importance of Personality and Service

In a market where the role of brokers is not well-defined, personal attributes and the quality of service provided become key differentiators. Ravi emphasizes the significance of a broker’s personality and the value they bring to clients:

I don’t think anyone is trained to be It has to come naturally You these these people that you must have met, they will be in IPCs. They’re called International Property Consultants or there’s another IPC also, which I forgot there’s so many, you know, abbreviations of all of these things.

What a person is dressing as is irrelevant as long as the information that he’s giving And as long as the service that he is giving is correct, is right and he is to the mark with all of those things. Rest, the clothes he wears doesn’t make any difference.

Ravi’s perspective highlights that while appearance and demeanor are important, the true value of a broker lies in their knowledge, expertise, and the quality of service they provide to their clients.

Navigating the Challenges: Dhakka, Dhoka, and Dua

Drawing from his extensive experience, Ravi encapsulates the key challenges faced by brokers in Mumbai’s real estate market using three poignant terms: Dhakka (push), Dhoka (betrayal), and Dua (blessings).

1. Dhakka (Push)

• Dealing with unresponsive or evasive clients and owners
• Putting in extensive effort to secure deals, often in challenging conditions

Going, deal is done. You go to the buyer, you go to the seller and you say, Sir, you said you’ll get commission today. Not today, come tomorrow. Again, go the next day. No, not tomorrow. Sir is not at home. Sir is not in the office. Sir is not at home. You call him and come. Call him, but don’t pick up the phone.

2. Dhoka (Betrayal)

• Experiencing dishonesty and lack of integrity from clients and owners
• Dealing with situations where the work is done but the promised compensation is not provided

The dhoka part is a step above this. Where the work is done, everything is done and then they come and say you didn’t do anything. Means The house came to your door and you took it like this. You didn’t know where the house was, you didn’t know who the owner was, you didn’t have any idea when you bought the leave and license agreement or outright. You did everything. The horse came to the horse. The horse didn’t go to the horse.

3. Dua (Blessings)

• Recognizing the importance of blessings and good fortune in a challenging market
• Attributing success to a combination of hard work and divine intervention

Without blessings forces of nature working towards you, you cannot accomplish anything. You need the blessings of your parents, you need the blessings of God and you need spirituality or whatever the force is, an angel that has to look after you to get that.

These three aspects encapsulate the multifaceted nature of the challenges brokers face in Mumbai’s real estate market, highlighting the need for resilience, adaptability, and a strong belief system.

The Unregulated Nature of the Market

One of the most significant challenges in Mumbai’s real estate market is its largely unregulated nature. Ravi elaborates on the consequences of this lack of structure:

Our world is the wild wild west. Anyone can get up, shoot anyone and run away on his horse and no no no no where he is. It’s a very unorganized, a very dirty world of the broker and developers are there and this is all across the board.

This unregulated environment creates a breeding ground for unethical practices, making it difficult for brokers to operate with transparency and integrity.

The Need for Regulation and Protection

Ravi strongly advocates for the need for government intervention and regulation to protect the interests of brokers and establish a more structured market:

If you are the kind of person who wants to go and associate yourself with the watchman and get the deal done, more power to you. I don’t want to associate with you. Because you are not a client. And even if you are a client, you are not of my caliber, you are beneath me.

If you love someone, then you have the right to anger them. If you are putting responsibilities on us, then you should fix our remuneration too. That in a resale agreement, in a resale property, 1% is done. Come up with terms and conditions. Come up with a list of things that you have to work. If you are paying, then fix our remuneration too.

Ravi’s stance underscores the urgent need for a regulatory framework that not only sets standards for brokers but also ensures fair compensation and protects them from exploitation.

Adapting to the Digital Age

The advent of technology has brought about significant changes in the real estate industry, and Mumbai is no exception. Online platforms and portals have emerged as new avenues for property listings and transactions. However, Ravi points out the limitations of these platforms:

That platform has become just like every other platform has become overpopulated. It is filled with gunk. I used to advertise on all of these platforms. I have stopped using all of them. Because the leads that come, number 1, that leads that are coming are like just click click click click click click click every person has that lean once again the quality is is not up to my level number 1 the properties that are listed over there, everybody has that property.

Despite the challenges, Ravi recognizes the potential of technology and is in the process of developing his own app to address the gaps in the market:

I’m in the process of building an app. I have a whole 5 year phase wise launching of it. So I mean talks with the company, which is in Bangalore about setting up an app, an app, which is something which is completely different and it’s all in my head.

This highlights the importance of adaptability and innovation in a rapidly evolving market, where traditional methods may no longer suffice.

The Power of Relationships and Trust

In a market where trust is often a rare commodity, building strong relationships and establishing credibility becomes paramount. Ravi emphasizes the significance of word-of-mouth and the impact of delivering exceptional service:

Majority of my business comes from… Word of mouth. From references. Word of mouth? Yeah, From word of mouth, from walk-in, from walk-in. I have a shop, which is a ground floor shop. So we have walk-in clients.

The first deal that I ever did was an 88000 rupees monthly rental in Khawar West I had done that guy that owner is still my client. He works with only 2 brokers. I am 1 of them. For a property which is just over 5 crores. He wants to sell it now so it’s just over 5 crores.

These examples demonstrate the power of building long-term relationships and delivering exceptional value to clients, which can lead to repeat business and referrals.

Navigating the Challenges of Investing in Real Estate

For those looking to invest in Mumbai’s real estate market, Ravi offers valuable insights and advice. He emphasizes the importance of a long-term perspective and the potential for substantial returns:

If you want to make money in real estate, first of all, your time frame should be minimum 10 years. Minimum 10 years is what you should be looking at. That’s a lot. Yeah. You’re 23 when you’re 33. But 10 years will pass by and you will not even realize it.

If you plan to buy land, if you plan to buy an apartment, depending on whatever is your budget, go and buy. I’ll give you an example. Khar, Bandra, Santikruz. This place where you are sitting in. 40 years ago, it was a jungle. This entire thing was Khadi. BKC was a khadi.

Ravi’s examples highlight the transformative potential of investing in areas with upcoming infrastructure and development plans, where the appreciation in value can be exponential over time.

The Importance of Due Diligence

While the potential for substantial returns is alluring, Ravi cautions against hasty decisions and emphasizes the importance of thorough due diligence:

If you want to invest in real estate, you have to be in the long run. If you have the capital, then you use that capital wisely. Land is finite. Correct. You can grow vertically as much as you want. Today you bought the land, that land, 20 years later, 10 years later, any developer will come and say that I want to build a building.

I will tell you I am very Gangu about Panvel. Reason why I am Gangu about Panvel is… I love the word Gangu, by the way. It’s too much fun. Why? It’s like an 80s, 90s word or something? No, I don’t know. It just sounds cool. Okay, so Gangu means I’m very… I’m positive and I’m passionate about the fact that Panvel is a very good location.

Ravi’s advice underscores the significance of conducting thorough research, identifying areas with growth potential, and making informed decisions based on long-term prospects.

The Power of Land Ownership

Ravi strongly advocates for the value of land ownership in Mumbai’s real estate market. He illustrates the potential for substantial returns and the benefits of partnering with developers:

If you want to invest in real estate, you have to think long term. If you have the capital, then you use that capital wisely. Land is finite. Correct. You can grow vertically as much as you want. Today you bought the land, that land, 20 years later, 10 years later, any developer will come and say that I want to build a building. At that point of time, 25-storey building will be built. You can say that I want to buy 12 flats. Rest you sell and you can make all of that. Make your money, your construction costs, 50% revenue sharing.

I have a friend. They are 2 brothers. Okay? Grandfather and father passed away. Mom is still there. He has 2 brothers. 1 is in US and the other is in Canada. My friend is in Canada and his brother is in the US. They make their money, they are happy over there. They used to have a plot in Juhu Gulmohar. They gave it to a developer. The developer made the whole property. 3 units they have, 1 for his mother, 1 for each brother. He gets 2.5 lakh rupees monthly rent over there for this 4 bedroom flat. He doesn’t have to do anything. Dadda bought it. That’s his third generation. Dadda bought it for 50,000 rupees. Back in the 80s. That is the beauty of Real Estate.

These examples showcase the immense potential for wealth creation through land ownership and strategic partnerships with developers, highlighting the importance of a long-term vision and the power of generational investments.

Key Takeaways

1. Mumbai’s real estate market is a dynamic and challenging landscape, requiring brokers to navigate through “Dhakka, Dhoka, and Dua” – the push, betrayal, and blessings that come with the territory.
2. The lack of regulation and structure in the market creates an environment where unethical practices can thrive, emphasizing the need for government intervention and protection for brokers.
3. Adapting to the digital age and leveraging technology is crucial for brokers to stay competitive, but the importance of building strong relationships and delivering exceptional service cannot be underestimated.
4. For investors, a long-term perspective, thorough due diligence, and strategic investments in areas with growth potential are key to success in Mumbai’s real estate market.
5. Land ownership holds immense potential for wealth creation, with the possibility of partnering with developers and enjoying substantial returns over generations.

Conclusion

Navigating Mumbai’s real estate market is not for the faint of heart. It requires resilience, adaptability, and a deep understanding of the intricacies and challenges that come with the territory. Through the insights and experiences shared by Ravi, we gain a glimpse into the complex world of real estate brokerage in Mumbai, where success is determined by a combination of hard work, integrity, and the ability to navigate the “wild wild west” of the market.

As the industry continues to evolve, with the advent of technology and the growing need for regulation, brokers like Ravi serve as a beacon of hope and inspiration for those looking to make their mark in this dynamic field. By embracing change, building strong relationships, and maintaining a long-term perspective, brokers and investors alike can unlock the immense potential that Mumbai’s real estate market has to offer.

In the end, success in this market is not just about the transactions or the commissions earned; it’s about the lives touched, the relationships built, and the legacy created. As Ravi aptly puts it, “That is the beauty of Real Estate.” It is a testament to the enduring power of this industry and the opportunities it presents for those willing to take on the challenge.