THE RIGHT CHOICE
Should house hunters go to an underwriter or a broker?
Nis hat Khan, an investor, booked two apartments in Gurgaon through a broker in 2012. While doing so he had a choice between going through an underwriter and a broker. He tells us why he chose the latter.
I preferred a broker because he promised me a certain commission. In this case, it was 2%. This means that if the broker himself got a 3% commission from the developer, he promised to give 2% as commission to me. I chose to go through the broking route because it helped me maintain cash flows in the short term.
Also, if you are on good terms with your broker he might even help you sell your apartment once the project is formally launched at a higher price or after some time when prices appreciate.
Had I booked a unit with an underwriter, I would have received a good base rate as the benefit of bulk bookings (economies of scale) would have been passed on to me. I would, however, have enjoyed this benefit over a period of time and not in the short term.