Do you need a Real Estate Expert? (part 2)

In the first part of this article, we read why we should involve a consultant in any High Involvement Purchase or HIP we are making. We understood why one should choose a right consultant before choosing a right product.
In this second and concluding part of the article, we will talk about couple of important things:
  • What to look for in choosing a consultant
  • Defining his scope of work & how to task him

What to look for in a Consultant

Property Advisor

Expertise of a Consultant

Whenever you hire a consultant you must first check the expert areas of the consultant & whether they match your requirement or not. Equity portfolios are never managed by Debt Fund managers. Similarly, when you look out for a real estate consultant you should check his expertise in executing deals favorable to the customer. Better said than done, still, we can do following more checks to establish his expertise

Experience of the Consultant

Home Buying Decision

While experience is no judgment for qualification, yet if a person is there in the industry claiming himself to be a consultant, the time he has spent can be taken into consideration otherwise he would have been out of the market.

Reference Checks

You are within your rights to do a reference check when you are choosing a consultant. He should have executed enough transactions, complex or normal, to handle your transaction smoothly. Reference check can be done from the market or asking for references from the consultant himself.

Cost for Consulting Services

Every service comes at a price. There are consultants available in the entire spectrum. You have to choose the one who is priced as per the market and is suitable to you as per what your pocket allows giving services enough to cover your requirements.

Conflict of Interest

Unfortunately many consultants also have their share in the transaction. It is but natural that there is a conflict of interest there. You must investigate or clarify how the consultant makes money apart from taking consulting fees from you. If the fee has been negotiated down, it benefits to double check whether the consultant also has a share in the transaction. Conflict of Interest will definitely affect the choice the consultant is going to make for you.So it is important that you are able to get hold of the consultant who is of unimpeachable character.

There are subjective factors as well but the most important point in selection of a consultant are covered above. Now we move onto the next & the last piece of the puzzle.

Defining Work Scope & Tasking a Consultant

Having done the difficult part of choosing the consultant, this portion is relatively easy. If one has landed with the right consultant, most of the things would now be smooth. However, this being a High Involvement Purchase, we need to still proceed with caution and define some rules of the game so that the expectations are clear from both sides.

Also, we should be aware that despite the consultant being the best in the field, he may not have all the information so we should be looking not for the best product or service but the most optimum one.

An analogy could be that for a real estate consultant operating out of Gurgaon. In Gurgaon & nearby areas of Bhiwadi, Dharuhera, Neemrana, Pataudi – there would be more than 1000 products to choose from. It is near impossible for the individual consultant to have details about all of them to make a best decision for you.

We should do following right:

  1. Specify the deliverables for the consultant. In case you want to focus him specially on particular areas he needs to be told in advance
  2. In the start itself, specifically ask for whatever you wish to have from the consultant. This will ensure either parties do not feel cheated of the value they are getting on the table.
  3. Have specific action plan with timelines – Like if one is looking to buy a house, he should clearly define the search period, the transaction period etc so that the work can happen as per the timelines and does not get dragged without any reason.
  4. Transparency – You are within your rights to ask for data or any other information that has formed the basis of suggestions made by the consultant. It is important to know what all scenarios have been considered by the consultant while making the decisions.
  5. Penalties for Non-Performance – If it is possible try building penalties for non-performance. Most often, it is difficult to do and the consultants given the fact that most people do not ask for it may refuse to do it and in worst case scenario even refuse the work.
  6. Review regularly – Make it a point to review regularly (regardless of short duration or long duration work) even within the timelines so that the consultant is on the toes and knows that he has to deliver timely and in interest of the client.

With this we come to the end of the series explaining why & how to engage a consultant for High Involvement Purchase which are very critical given their impact financially and/or emotionally.

Rera

With the steps mentioned above I am sure you will be able to do make your HIP a pleasant experience for yourself in the long term.