Tuesday, January 12, 2010

How real estate brokers help in brain gain?

Real estate brokers and brain gain! Isn't this a tenous connection? Before elaborating on that let me reflect a little on some flash back facts of the year 1999. This was a year when I gave the higher secondary examination and after securing a low rank in West Bengal Joint Entrance examination decided to shift towards studying a new subject. One of the aspirations during that time was to pursue and love a subject so that one day could land up in United States (may be driven very marginally by a colonial hangover and illusion also, that gradually cleared and started changing during 2004 - 2006 while working) for higher learning credentials and also could earn some dollars. The motivation to dream in that way for some time was also to save hard currency like dollars (at least definitely during that time) to buy house back in India so that our family could have a feeling of living in our own house. So I used to think that would go to U.S to earn money, degree and come back to the country and stay in our own (non rented) house for the first time. I am sure this is the story of many Indians who go to U.S, earn dollars and invest back in the country in real estates as they want to come back to the country and settle here living in their own house after buying real estate properties. Assurance of a property back at home after investments can act as one of the levers towards helping our people to come back to their own nation.

Real Estate regime therefore has a role to play in this brain gain. But the role of the real estate brokers also holds a key in this brain gain. Recent data shows that most of the Indians who have gone abroad to earn their living, have become NRIs and planning to return to India invests in real estate properties in India through brokers. Many times the broker is found to be corrupt and money of the NRIs are lost. Transparent information dissemination to the NRIs by the agents also often doesnot happen that starts acting as a hindering factor towards return of the NRIs back in the country that could impinge on the brain gain. The performance and nature of the brokers is very important in ensuring that the money of the NRIs are used properly in genuine real estate properties. An agency is always better than a broker because the risk of fraudulent practices could be higher in case of an individual as the uncertainty regarding the behaviour of an unknown individual is higher than the agency. Also the people planning to come back to the country should be cautious of the asset in which the broker is putting the money. Ideally NRIs should check whether their money is put in real estates developed by renowned developers or in real estate projects towards completion. True information disclosure by the real estate agent to the NRI and its subsequent monitoring can fasten the building of trust between the agent and the NRI. Class of real estate asset also holds key regarding how fast the NRI could realise the dream of actually living in a new home in his/her home country after the money has been invested in that asset class.

Also, property grabbing often acts as a barrier for the NRIs who are planning to come back to their country. Efficient laws, speedy recoveries of property, punishment of all agents involved in such property grabbing could work and help in brain gain. Punjab has already amended the East Punjab Urban Rent Restriction Act of 1949 to sort out the cases of property grabbing of NRIs.

This kind of legal reforms along with laws regulating unaccountable practices of brokers could go a long way in bringing back the people (who want to come back to the country and settle in their own homes in India by buying properties in India in a post financial crisis regime) and that could lead to a brain gain for the nation.

Even we could set an example for our neighbouring nation like China where significant brain gain has been happening but in a very different way. Definitely we have to work towards this brain gain through our own "Jugaadu", innovative way. That's why our nation is so interesting as a place to stay and as a subject of research, policy making and implementation.


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