What is a channel partner in real estate?

Real estate professionals have long played a crucial role in the realty sector, not only endorsing projects but also underwriting and receiving compensation from developers for their services. In the contemporary landscape, online marketing portals such as www.magicbricks.com, www.Commonfloor.com, www.99acres.com have assumed roles akin to traditional channel partners. These portals offer extensive features like 360-degree home tours, construction updates, and comprehensive property information at the click of a button, expanding their reach and functionality.

The symbiotic relationship between channel partners and developers has intensified. The Unification of Builders and Channel Partners represents a modern-age collaboration. Developers increasingly engage with channel partners, leading to several mutual benefits.

Immediate Funding:

By having channel partners underwrite properties, builders gain access to funds that can address immediate cash requirements. While similar to funding from financial institutions, this method involves relatively lower cash transactions, offering significant relief to builders facing challenges in securing daily operational funds.

Assured Trade of the Property:

Collaborating with channel partners ensures developers of a guaranteed sale of their property. This assurance distinguishes channel partners from traditional real estate agents or brokers. Developers prefer channel partners due to the commitment to the guaranteed sale, eliminating uncertainties associated with brokers who may not be as committed to selling or promoting the property.

Promotions and Marketing:

Channel partners take on various marketing and promotional activities, including property listings, lead generation, and digital marketing. This alleviates the burden on developers, allowing them to focus on their core business of delivering quality construction to potential customers.

Channel Partners vs. Brokers – Similar Functions, Different Dynamics:

While channel partners and brokers share similar functions, there are substantial differences in their working models. Brokers/agents typically do not assume liabilities, whereas channel partners take responsibility for the properties they aim to sell. This makes channel partners more reliable compared to property agents. Additionally, channel partners receive a more substantial share, as they invest in promotional activities from their own resources. Channel partners operate within a disciplined structure and possess extensive networks, while brokers/agents often have limited networks due to resource constraints.

Channel Partners and Real Estate (Regulation and Development) Act, 2016 (RERA):

The implementation of the Real Estate (Regulation and Development) Act, 2016 (RERA) has reshaped the dynamics of the Indian residential realty market. Under RERA, channel partners may face a 5% penalty of the total project cost if inaccurate information is provided to homebuyers. This regulatory framework aims to enhance transparency and instill confidence among buyers.

As the property sector witnesses the emergence of organized players, the demand for channel partners has surged. Channel partners serve as a vital link between real estate companies and property seekers. Developers and channel partners alike have benefited from increased sales. Tier-2 cities like Pune and Vadodara are experiencing a rise in the prominence of channel partners, driven by their better understanding of local requirements. With the introduction of RERA, buyers are increasingly placing their trust in property transactions facilitated by channel partners, given the penalties imposed on misleading practices. This shift is expected to contribute to the growth and credibility of the real estate sector, bolstering the overall economy.