sip project of project finance in LIC HFL by Lav Chaudhary

1. Introduction
&
Scope
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2. INTRODUCTION
The purchase or sale of a home or investment property is not only one of the most
important financial events in peoples’ lives, but also one of the most complex
transactions. As a result, people usually seek the help of real estate agents and
brokers when buying or selling real estate.
Real estate agents and brokers have a thorough knowledge of the real estate
market in their community. They know which neighborhoods will best fit clients’
needs and budgets. They are familiar with local zoning and tax laws, and know
where to obtain financing. Agents and brokers also act as an intermediary in price
negotiations between buyers and sellers. Real estate agents are usually
independent sales workers who provide their services to a licensed broker on a
contract basis. In return, the broker pays the agent a portion of the commission
earned from the agent’s sale of the property.
Property Service Division of LIC Housing Finance Limited deals with the same
business of real estate. The need of entering in this field was felt by LIC Housing
Finance Ltd due to increasing prospects in Real Estate business. There are many
big brands namely ICICI realty, HDFC Realty, Axis Bank Realty etc.
A new line of business by the name Property services Division is being launched
across the country in selected centers. The function of the Property services
Division includes all activities involved in enabling a prospective homebuyer
select the property up to taking the possession of the same. It is thus conceived to
be a one-stop-shop for all the advisory services related to the above. Property
services division, which offers investors and builders a single transparent platform
to buy/sell office and commercial spaces and residential apartments/flats.
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3. Scope of Property Service Division
The Real Estate Investment Scope In India- A Lucrative And Safe
Option
Realty sector is one of those sectors that have always yielded high percentage of
capital gain for the investors. Whether be it in the case of the developed countries
or developing nations, each and every economy tries to maintain its financial
infrastructure as sound as possible so that they can easily attract more number of
investors and business personnel to involve with their economy. Real estate sector
depicts the true economic development of a particular nation. India, one of the
fastest developing nations in this world since independence; has successfully
emerged as one of the lucrative destinations to reap assured benefits on real estate
investment in almost all the states and cities of the nation. The modern amenities
and infrastructural facilities as good connectivity roads, green environment, better
transport; secured power supply are some of the standout features that have lured
the attentions of investors from all across the globe towards India real estate
properties.
In India real estate properties can be broadly categorized mainly into two distinct
groups, namely the commercial property and the residential property. The
underlying line of distinction between a commercial property and residential
property is noticed while noticing the use and purpose of that property.
Commercial properties are commonly used as office buildings, malls, retail
outlets, etc. and residential property is mainly used for personal use only.
Due to the development of industries in the NCR region, more and more number
of people have started to earn huge amounts of return from their jobs and
businesses. Now they want to invest their earnings in more lucrative as well as
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less riskier investments that would give them more benefits as compared to the

4. other options. The Indians look at the business as the more profitable option with
greater dividends on investments. This in turn has led to the increase in the
amounts of foreign investments in business in India. And real estate markets in
India are growing continuously at the rate of 30% each year.
Turning our looks towards the state of the residential properties in Gurgaon and
the neighboring NCR cities, with the fast expansion of population in northern
India aided by the recent boom in the jobs sector, the demand for residential
property for such a large population has seen a good amount of surge. The recent
surveys that have been conducted India have strongly indicate India has the
second largest population in the world and china has the largest population in the
world. The study also reveals that with in the next decade India will cross Chinese
population and will be on the top for having largest population.
Commercial as well as real estate sector has witnessed a real boom in the NCR
region in India. Since the liberalization of the Indian economy, real estate
business has seen an upward trend in the last fifteen two decades. The advent of
the multinational companies to India in order to set up a viable industrial base,
especially the IT sector, which has seen a phenomenal growth, the demand for
space has risen up and with that the prices have also been touching sky heights.
The major source of the thrust is mostly due to favorable economic policies, the
constant rise in the purchasing power, new growth of customer friendly banks
professionalism in real estate.
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5. Brief Introduction
Of
LIC HFL
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6. LIC Housing Finance Limited
LIC Housing Finance Ltd. is one of the largest Housing Finance Company in
India.
It provides Housing Loan for long term Finance with low Home Loan Interest
Rates. You can take a Home Loan either for purchasing a plot or for house
extension or for repair & renovation.
Vision: Complete Financial Solutions to secure your future.
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7. Mission: To grow steadily and sustainably in our customers’
mind and money space.
History Of LIC Housing Finance:
Launched in 1989 as per Companies Act, 1956 lic housing finance has grown to
be one of the largest lender in home-finance market
Promoted by LIC that helped in initial business functions. Finally after being
promoted as a company offering housing finance by lic it went public in 1994.
LIC Housing Finance news state that its authorized capital stands at Rs.150 crores
or Rs.150 million.
Its shares are trade only in dematerialized form at both NSE and BSE.
Its GDRs are traded at Luxembourg Stock Exchange.
Presently, according to lichousing finance news there are over 158 marketing
units; along with a wide network of 6 regional offices and over 13 back-offices.
1989 - The Company was incorporated on 19th June as a public limited
company. It was promoted by LIC of India. The Company provide housing
loans to individuals, builders, development authorities, employers organisation
etc.
- The Company has started various schemes: Griha Prakash a general scheme,
Griha Tara under which it accepts only Bima Sandesh Plan as Life Insurance
Corporation, Griha Shobha for NRIs and Griha Lakshmi for people to have a
second house.
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8. 1994 - 3,00,57,900 No. of equity shares were issued at a premium of Rs 50 per
share through public issue on 15th November 1994. The allotment was as
follows; 10,82,000 shares to LIC on firm allotment basis and the balance
189,75,900 shares to public (all were taken up).
1996 - The Company has decided to carry out fund based and one-fund based
activities, viz., debt securitisation, lease and hire purchase, renting of properties
and giving guarantee to co-operate bodies.
2000 - Crisil has assigned a AAA rating to the issue of mortgage backed pass
through certificate backed by mortgages orginated by the company.
2001 - The Company has launched its new scheme, Griha Vikas.
2002 - LIC Housing Finance Ltd has informed BSE that the Company has
forfeited 1,25,300 equity shares due to non payment of allotment/call monies.
-LIC Housing Finance has approved for the take over of Individual Housing
loan portfolio of GLFL Housing Finance.
-Around 25 investors subscribed to the issue of confidentially placed debentures
for a total amount of Rs.392 cr of LIC Housing Finance Ltd.
-LIC Housing Finance Ltd has decreased its interest rates on housing loans by
25-50 basis points.
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9. -Financial Institutions have increased their stake from 0.01% to 1.96% and
Mutual Fund companies have increased their stake from 0.35% to 1.06% in LIC
Housing Finance.
-LIC Housing Finance Ltd has decreased the floating rate of interest under
individual loan scheme to 9.5% from 11%.
-LIC Housing Financee signed a deed of assignment to take over individual
housing loan portfolio of Citibank N A.
-UTI and IFCI has been removed from the list of promoters of LIC Housing
Finance.
2003 - LIC Housing Finance has unveiled a new project for elderly people
called 'LIC HFL Care Homes' .
-LIC Housing Finance Ltd has sanctioned 84,126 loans worth Rs.3265.78cr and
disbursed 76,663 loans worth Rs.2941.24cr under its Individual Loan Scheme.
-LICHFL has mobilised Rs.280cr for 15 years at 7% rate of interest through
private placement.
-Lic Housing Finance Ltd has informed that the shares of the company have
been delisted from The Stock Exchange - Ahmedabad w.e.f December 08, 2003.
2004 -Merill Lynch Capitat acquires LIC housing stake of 0.39%
-Templeton Asset Management buys 37,52,362 equity shares, representing
5.01% of LIC Housing's total paid-up capital of Rs 74.9 crore
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10. -LIC Housing Finance Ltd has informed that the shares of the Company has
been voluntarily delisted from the Delhi Stock Exchange (DSE) w.e.f. January
23, 2004.
-LIC Housing Finance shares delisted from Madras Stock Exchange
-Mr D Krishnan appointed as Chief Executive Officer
- LIC Housing Finance Ltd's (LICHFL) one-crore global depository receipts
(GDR) issue opened on August 27.
- Lists its maiden global offerings worth .85 million at the Luxembourg Stock
Exchange successfully.
-Introduces new product that starts as a fixed rate loan but contains an option to
convert it to a Floating rate loan at the end of five years, at the then prevailing
rate.
2005 -Delist from The Calcutta Stock Exchange Association Ltd (CSE) with
effect from December 09, 2004.
-LIC Housing Finance launches loan product that eliminates the requirement of
charge on house financed.
-Goldman Sachs acquires share in LICHFL
2007 -LIC Housing Finance to launch FD scheme -LIC Housing Finance to
enter into reverse mortgage product.
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11. 2008 - LIC Housing Finance Ltd has informed that the Board has appointed the
following persons as Directors on the Board of the Company on May 20, 2008
-Name of the Director : Shri. D K Mehrotra For the Position of : Managing
Director
Change effective from : May 20, 2008.
- LIC Housing Finance Ltd has informed that the Board of Directors of the
Company has appointed following person as Director on the Board of the
Company on July 01, 2008.
- Name of the Director : Shri A S Narayanamoorthy
- For the position of : Additional Director
- Change effective from : July 02, 2008
-LIC Housing Finance launches Reverse Mortgage for senior citizens
2009 - LIC Housing Finance cut interest rates for new loans by 0.5% where for
customers opting for floating rate loans between Rs 30 lakh and Rs 75 lakh, the
new rates will be 8.755 against 9.25%.
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12. Company Profile
LIC Housing Finance Ltd is one of the•largest Housing Finance company in
India. The company is engaged in the business of providing loans for purchase,
construction, repairs and renovation of houses/flats to individuals, corporate
bodies, builders and co-operative housing societies and has its operations within
India. They provide loans for homes, construction activities, its corporate housing
schemes. Around 89% of the loan portfolio derived from the retail segment and
the rest from large corporate clients. The main objective of the company is
providing long term finance to individuals for purchase / construction / repair and
renovation of new / existing flats / houses. The•company also provides finance
on existing property for business / personal needs•and gives loans to
professionals for purchase / construction of Clinics / Nursing Homes / Diagnostic
Centres / Office Space and also for purchase of equipments. The company
through their subsidiaries LICHFL Care Homes Limited, is engaged in the
business of setting up, running and maintaining assisted living community
centre/care homes for senior citizens; LICHFL Financial Services Ltd, is engaged
in the business of marketing various financial products and services, and LICHFL
Asset Management Company Ltd is engaged in business of managing, advising,
administering mutual funds, unit trusts, investment trusts and to act as financial
and investment advisors and render financial advisory services. The company
possesses one of the industry's most extensive marketing network in India. The
company is having their registered and corporate office at Mumbai. They have•7
regional offices, 13 back offices and 190 marketing units across India. In addition
the company has appointed over•1241 direct sales agents (DSAs),•6535 home
loan agents (HLAs) and•782 customer relationship associates (CRAs) to extend
their marketing reach. They have set up a representative office in Dubai and
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Kuwait to cater to the non-resident Indians in the GLCC countries covering
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Bahrain, Dubai, Kuwait, Qatar and Saudi Arabia. LIC Housing Finance Ltd was

13. incorporated on June 19 1989. The company was promoted by LIC of India and
went public in the year 1994.• The company is recognized by National Housing
Bank and listed on the National Stock Exchange (NSE) & Bombay Stock
Exchange Limited (BSE) and its shares are traded only in Demat format. The
GDR's are listed on the Luxembourg Stock Exchange. In the period of 2001, the
company launched their new scheme called Griha Vikas. In the year 2002, the
company signed a deed of assignment to take over individual housing loan
portfolio of Citibank. In the year 2003, they unveiled a new project for elderly
people called LICHFL Care Homes. The company launched their maiden GDR
issue in the year 2004. Also, they introduced flexi-fixed scheme offering fixed
rate of interest for first five years and variable thereafter. In October 2005, the
company started offering of 'New Griha Laxmi' housing loans against the security
of certain approved financial assets like Bank Fixed Deposits, National Savings
Certificates and Life Insurance Policies. In the year 2006, the company introduced
new Griha Jestha for senior citizens for buying unit of LICHFL Care Homes Ltd.
In May 2007, the company launched maiden Fixed Deposit Scheme. In October
31, 2007, the company incorporated LICHFL Financial Services Ltd for
undertaking non fund based activities like marketing of housing loans, insurance
products, credit card, mutual fund, personal loan etc. In February 2008, they
launched reverse mortage for senior citizens above 60 years of age. In February
14, 2008, the company incorporated LICHFL Asset Management Company
Private Limited for undertaking the business of managing, advising, administering
venture funds, unit trust, investment trust in India as well as abroad. In March 5,
2008, the company incorporated LICHFL Trustee Company Private Limited for
undertaking the business of trustees of venture capital trust, funds - in India and
offshore fund. In March 12, 2008, they launched a new venture capital fund for
realty projects. During the year 2009-10, the company was awarded the 'Second
Best Home Loan Provider' award by Outlook Profit. During the year 2010-11, the
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company launched a unique interest rate scheme namely, 'MINI 5' to cater to
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14. housing finance needs of the priority sector population residing in Tier II and Tier
III cities.
Various Products Offered By LIC Housing Finance:
As per various LIC Housing Finance news, there are many products that are
offered by the company ever since it was launched way back in the year 1989.
These include both deposits as well as advance schemes that work as tools of
housing finance by LIC:
Reasons for Home Loans:
To own a home is everyone's dream. From a single room to multi-storeyed
apartments, private villas, holiday homes, second homes - the Housing market is
well developed in most towns.
Home loans help you realize your own home dream, even when you are young.
We help you plan your dream home as you start your working life, by offering
various options of easy installments, Income Tax benefits and more . . .
Loans: Loans are offered as per different target groups of consumers. Thus, there
are lic housing finance schemes offered as loans according to different borrower-
category, such as:
i) Corporate loans
ii) Loans meant specifically for builders as well as real estate developers
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iii) Home-loans
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15. iv) Loans aimed at professionals
Deposit schemes: Deposit schemes were first launched by the company on 10th
May 2007 and may be accepted as both cumulative as well as non-cumulative
deposit schemes. Terms of deposit may range from 1 year; 18 months; 2 years; 3
years as well as 5 years.
Interest under non-cumulative deposit schemes would be distributed twice a year;
whereas interest on cumulative deposit schemes would be calculated as per bi-
annually compounding.
Loans:Housing Finance By LIC :
Loan-schemes available with lic housing finance are customized to suit varied
requirements as per individual borrower-profile. As per official website and
lichousing finance news following loans are available:
Home loans: Are offered at easy rates to both residents as well as non-resident
Indians. Step-up facility in terms of amount of EMI amount is also available for
those who wish to opt for a steady increase in their repayment capacity during
tenure if loan.
Corporate loans: Aimed at corporate employees who have been approved by
LIC and include employees of PSUs, reputed public as well as private limited
companies
Housing finance by LIC loans to professionals: Aimed at non-salaried
professionals.
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16. Taking a home loan is a major decision, involving a large investment.
Though the availability of easy financing, innovative products and other
value-added services by Home Loan companies have made the home
buying process relatively easy, for a customer it is still a challenge to
decide which home loan works best for him.
LICHFL is the best choice because:
• LIC HOUSING FINANCE LIMITED is one of the largest Housing Finance
providers in India, which has provided finance for almost 9,50,000 houses in
the country.
• LICHFL is a single-product company with its core business being Home
Loans, and has about two decades of experience and in-depth knowledge of the
real estate market dynamics.
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• LICHFL provides:
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17. • Lowest Interest Rates
• Easy application, quick approvals.
• Largest Network.
• No Hidden Costs.
• The Company has been rated as FAAA/Stable by CRISIL.
Reasons to buy from LICHFL?
They operate in the Financial Services industry with you as the center of We
operate in the Financial Services industry with you as the center of focus. We
provide complete, holistic financial solutions to meet all your financial needs. We
ensure well-trained, professional financial planners at your service, as well as
provide you with personal finance education and money management tools, to
help you make the right decisions for your secure future.
Competitors in the Market
State Bank of India:
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SBI offers its customers exclusive packages of mortgage loans at lowest rates.
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One such service includes Reverse Mortgage Loan that enables house-owning

18. Senior Citizens having inadequate income to meet their financial needs for
renovation/repairs to house, medical & other personal purposes.
Bank of Baroda :
The Bank of Baroda is reputed for providing very high quality financialproducts
pertaining to home loans and loans for household purposes. It offers a flexible
approach to the customers to deposit , withdraw and repay installments as per
need and enjoy low mortgage rates combining it with the loan and over draft
facility.
United Bank of India :
United Bank Of India has been around in the financial sector from more than 50
years and the mortgage scheme offered by the bank is one of the most important
part of its financial portfolio. The loan caters the basic need of the borrower to
meet any personal/ business requirement at affordable rates.
ICICI Home Finance :
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19. Part of the ICICI Group , ICICI HFC is one of the leaders in the Indian mortgage
finance and realty space following just after HDFC. Its various business offerings
include, Home loans, Loan against property, Home search, Construction Finance
and so on.
PROPERTY SERVICE DIVISION
Property Service Division is a new division which was introduced two
years back in LIC HFL. Property services division, which offers investors
and builders a single transparent platform to buy/sell office and
commercial spaces and residential apartments/flats.
A new line of business by the name Property services Division is being
launched across the country in select centers. The function of the Property
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services Division includes all activities involved in enabling a prospective
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homebuyer select the property up to taking the possession of the same. It

20. is thus conceived to be a one-stop-shop for all the advisory services related
to the above.
Said C J George, managing director, Geojit, "Real estate has emerged as
an important asset class for retail investors. Through this initiative, Geojit
plans to move up the service-value ladder to include new asset classes that
require advice and service."
PSD is mostly found in metros. According to the Head of PSD in LIC
HFL, Lucknow, property services is an unexplored profitable field whose
value has not been yet recognized.
At Home Search, one have access to the entire real estate market, under
one roof. When the customer choose to avail LICHFL’s PSD Home search
service, they are assured themselves a relaxed search experience. PSD
assist them at each step, irrespective of whether the customer want to buy,
sell, lease or even take property on rent.
Quite simply, it is the attempt at simplifying the process of buying that
dream home by ensuring that the customer doesn't need to run from pillar
to post. . It focuses on providing customers with a one-stop shop for
acquiring their new home or finding a buyer or lessee for their property.
Brief Introduction:
Brokers are independent business people who, for a fee, sell real estate
owned by others; they also may rent and manage properties for a fee.
When selling real estate, brokers arrange for title searches and for
meetings between buyers and sellers where details of the transactions are
agreed upon and the new owners take possession. A broker’s knowledge,
resourcefulness, and creativity in arranging favorable financing for the
prospective buyer often mean the difference between success and failure
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in closing a sale. In some cases, brokers and agents assume primary
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21. responsibility for closing sales; in others, lawyers or lenders do this.
Brokers supervise agents who may have many of the same job duties.
Brokers also manage their own offices, advertise properties, and handle
other business matters. Some combine other types of work, such as selling
insurance or practicing law, with their real estate business.
There is more to an agent or broker’s job than just making sales. They
must have properties to sell. Consequently, they spend a significant
amount of time obtaining listings—owner agreements to place properties
for sale with the firm. When listing a property for sale, agents and brokers
compare the listed property with similar properties that have recently sold
to determine its competitive market price. Once the property is sold, the
agent who sold the property and the agent who obtained the listing both
receive a portion of the commission. Thus, agents who sell a property they
also listed can increase their commission.
Most real estate agents and brokers sell residential property. A small
number, usually employed in large or specialized firms, sell commercial,
industrial, agricultural, or other types of real estate. Every specialty
requires knowledge of that particular type of property and clientele.
Selling or leasing business property requires an understanding of leasing
practices, business trends, and location needs. Agents who sell or lease
industrial properties must know about the region’s transportation, utilities,
and labor supply. Whatever the type of property, the agent or broker must
know how to meet the client’s particular requirements.
Before showing residential properties to potential buyers, agents meet with
buyers to get a feeling for the type of home the buyers would like. In this
prequalifying phase, the agent determines how much buyers can afford to
spend. In addition, they usually sign a loyalty contract which states the
agent will be the only one to show them houses. An agent or broker uses a
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computer to generate lists of properties for sale, their location and
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description, and available sources of financing. In some cases, agents and

22. brokers use computers to give buyers a virtual tour of properties in which
they are interested. Buyers can view interior and exterior images or floor
plans without leaving the real estate office.
Agents may meet several times with prospective buyers to discuss and
visit available properties. Agents identify and emphasize the most
pertinent selling points. To a young family looking for a house, they may
emphasize the convenient floor plan, the area’s low crime rate, and the
proximity to schools and shopping centers. To a potential investor, they
may point out the tax advantages of owning a rental property and the ease
of finding a renter. If bargaining over price becomes necessary, agents
must carefully follow their client’s instructions and may have to present
counteroffers in order to get the best possible price.
Once both parties have signed the contract, the real estate broker or agent
must see to it that all special terms of the contract are met before the
closing date. For example, if the seller agrees to a home inspection or a
termite and radon inspection, the agent must make sure this is done. Also,
if the seller agrees to any repairs, the broker or agent must see they are
made. Increasingly, brokers and agents handle environmental problems by
making sure the properties they sell meet environmental regulations. For
example, they may be responsible for dealing with problems such as lead
paint on the walls. While loan officers, attorneys, or other persons handle
many details, the agent must check to make sure that they are completed.
Working Conditions
Increasingly, real estate agents and brokers work out of their homes
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instead of real estate offices because of advances in telecommunications
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and the ability to retrieve data on properties over the Internet. Even with

23. this convenience, much of their time is spent away from their desk—
showing properties to customers, analyzing properties for sale, meeting
with prospective clients, or researching the state of the market.
Agents and brokers often work more than a standard 40-hour week; nearly
1 out of every 4 worked 50 hours or more a week in 1998. They often
work evenings and weekends, and are always on call to suit the needs of
clients. Business is usually slower during the winter season. Although the
hours are long and often irregular, most agents and brokers also have the
freedom to determine their own schedule. Consequently, they can arrange
their work so they can have time off when they want it.
Employment
Real estate agents and brokers held about 347,000 jobs in 1998. Many
worked part time, combining their real estate activities with other careers.
More than two-thirds of real estate agents and brokers were self-
employed. Real estate is sold in all areas, but employment is concentrated
in large urban areas and in smaller, but rapidly growing communities.
Most real estate firms are relatively small; indeed, some are a one-person
business. Some large real estate firms have several hundred agents
operating out of many branch offices. Many brokers have franchise
agreements with national or regional real estate organizations. Under this
type of arrangement, the broker pays a fee in exchange for the privilege of
using the more widely known name of the parent organization. Although
franchised brokers often receive help training salespeople and running
their offices, they bear the ultimate responsibility for the success or failure
of their firm.
Real estate agents and brokers are older, on average, than most other
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workers. Historically, many homemakers and retired persons were
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attracted to real estate sales by the flexible and part time work schedules

24. characteristic of this field. They could enter, leave, and later reenter the
occupation, depending on the strength of the real estate market, family
responsibilities, or other personal circumstances. Recently, however, the
attractiveness of part time work has declined, as increasingly complex
legal and technological requirements raise startup costs associated with
becoming an agent.
Training, Other Qualifications, and Advancement
In every State real estate agents and brokers must be licensed. Prospective
agents must be a high school graduate, at least 18 years old, and pass a
written test. The examination—more comprehensive for brokers than for
agents—includes questions on basic real estate transactions and laws
affecting the sale of property. Most States require candidates for the
general sales license to complete between 30 and 90 hours of classroom
instruction. Those seeking a broker’s license need between 60 and 90
hours of formal training and a specific amount of experience selling real
estate, usually one to three years. Some States waive the experience
requirements for the broker’s license for applicants who have a bachelor’s
degree in real estate.
State licenses typically must be renewed every one or two years, usually
without reexamination. However, many States require continuing
education for license renewal. Prospective agents and brokers should
contact the real estate licensing commission of the State in which they
wish to work to verify exact licensing requirements.
As real estate transactions have become more legally complex, many firms
have turned to college graduates to fill positions. A large number of agents
and brokers have some college training. College courses in real estate,
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finance, business administration, statistics, economics, law, and English
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are helpful. For those who intend to start their own company, business

25. courses such as marketing and accounting are as important as those in real
estate or finance.
Personality traits are equally as important as academic background.
Brokers look for applicants who possess a pleasant personality, honesty,
and a neat appearance. Maturity, tact, trust-worthiness, and enthusiasm for
the job are required in order to motivate prospective customers in this
highly competitive field. Agents should also be well organized, detail
oriented, and have a good memory for names, faces, and business details.
Those interested in jobs as real estate agents often begin in their own
communities. Their knowledge of local neighborhoods is a clear
advantage. Under the direction of an experienced agent, beginners learn
the practical aspects of the job, including the use of computers to locate or
list available properties and identify sources of financing.
Many firms offer formal training programs for both beginners and
experienced agents. Larger firms usually offer more extensive programs
for both beginners and experienced agents. Larger firms usually offer
more extensive programs than smaller firms do. Over 1,000 universities,
colleges, and junior colleges offer courses in real estate. At some, a
student can earn an associate or bachelor’s degree with a major in real
estate; several offer advanced degrees. Many local real estate associations
that are members of the National Association of Realtors sponsor courses
covering the fundamentals and legal aspects of the field. Advanced
courses in mortgage financing, property development and management,
and other subjects are also available through various affiliates of the
National Association of Realtors.
Advancement opportunities for agents may take the form of higher
commission rates. As agents gain knowledge and expertise, they become
more efficient in closing a greater number of transactions and increase
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their earnings. Experienced agents can advance in many large firms to
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sales or general manager. Persons who have received their broker’s license

26. may open their own offices. Others with experience and training in
estimating property value may become real estate appraisers, and people
familiar with operating and maintaining rental properties may become
property managers. (See the statement on property, real estate, and
community association managers elsewhere in the Handbook).
Experienced agents and brokers with a thorough knowledge of business
conditions and property values in their localities may enter mortgage
financing or real estate investment counseling.
Job Outlook
Employment of real estate agents and brokers is expected to grow about as
fast as the average for all occupations through the year 2008. However, a
large number of job openings will arise due to replacement needs. Each
year, thousands of jobs will become available as workers transfer to other
occupations or leave the labor force. Not everyone is successful in this
highly competitive field; many beginners become discouraged by their
inability to get listings and to close a sufficient number of sales. Well-
trained, ambitious people who enjoy selling should have the best chance
for success.
Increasing use of electronic information technology will increase the
productivity of agents and brokers as computers, faxes, modems, and
databases become commonplace. Some real estate companies use
computer-generated images to show houses to customers without leaving
the office. Internet sites contain information on vast numbers of homes for
sale, available to anyone. These devices enable an agent to serve a greater
number of customers. Use of this technology may eliminate some
marginal agents such as those practicing real estate part time or between
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jobs. These workers will not be able to compete as easily with full time
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agents who have invested in this technology. Changing legal requirements,

27. like disclosure laws, may also dissuade some that are not serious about
practicing full time from continuing to work part time.
Another factor expected to impact the need for agents and brokers is the
ability of prospective customers to conduct their own searches for
properties that meet their criteria by accessing real estate information on
the Internet. While they won’t be able to conduct the entire real estate
transaction on-line, it does allow the prospective buyer the convenience of
making a more informed choice of properties to visit, as well as the ability
to find out about financing, inspections, and appraisals.
Employment growth in this field will stem primarily from increased
demand for home purchases and rental units. Shifts in the age distribution
of the population over the next decade will result in a growing number of
persons in the prime working ages with careers and family responsibilities.
This is the most geographically mobile group in our society, and the one
that traditionally makes most of the home purchases. As their incomes
rise, they also may be expected to invest in additional real estate.
Employment of real estate agents and brokers is very sensitive to swings
in the economy. During periods of declining economic activity and tight
credit, the volume of sales and the resulting demand for sales workers
falls. During these periods, the earnings of agents and brokers decline, and
many work fewer hours or leave the occupation altogether.
Earnings
The median annual earnings of salaried real estate agents, including commission,
in 2011 was around Rs. 15,28,020. The middle 50 percent earned between
11,9,060 and 6,46,360 a year. The lowest 10 percent earned less than 1,13,800
and the highest 10 percent earned more than Rs.8,36,330 a year.
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28. Commissions on sales are the main source of earnings of real estate agents
and brokers. The rate of commission varies according to agent and broker
agreement, the type of property, and its value. The percentage paid on the
sale of farm and commercial properties or unimproved land is usually
higher than the percentage paid for selling a home.
Commissions may be divided among several agents and brokers. The
broker and the agent in the firm who obtained the listing usually share
their commission when the property is sold; the broker and the agent in the
firm who made the sale also usually share their part of the commission.
Although an agent’s share varies greatly from one firm to another, often it
is about half of the total amount received by the firm. Agents who both list
and sell a property maximize their commission.
Income usually increases as an agent gains experience, but individual
ability, economic conditions, and the type and location of the property also
affect earnings. Sales workers who are active in community organizations
and local real estate associations can broaden their contacts and increase
their earnings. A beginner’s earnings are often irregular because a few
weeks or even months may go by without a sale. Although some brokers
allow an agent a drawing account against future earnings, this practice is
not usual with new employees. The beginner, therefore, should have
enough money to live on for about six months or until commissions
increase.
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29. Types of services that a PSD can provide:
Since each state's laws may differ from others, it is generally advised that
prospective sellers or buyers consult a licensed real estate professional.
Some Examples:
Comparative Market Analysis (CMA) — an estimate of the home's value
compared with others. This differs from an appraisal in that property currently for
sale may be taken into consideration (competition for the subject property).
Exposure — Marketing the real property to prospective buyers.
Facilitating a Purchase — guiding a buyer through the process.
Facilitating a Sale — guiding a seller through the selling process.
FSBO document preparation — preparing necessary paperwork for "For Sale
By Owner" sellers.
Full Residential Appraisal — but only, in most states, if the broker is also
licensed as an appraiser.
Home Selling Kits —
guides to how to market and sell a property.
Hourly Consulting for a fee, based on the client's needs.
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Leasing for a fee or percentage of the gross lease value.
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Property Management.

30. Exchanging property.
Auctioning property.
Preparing contracts and leases. (Not in all states.)
These services are also changing as a variety of real estate trends transform the
industry.
Services provided to both buyers and sellers
In addition to the services to sellers and buyers described below, most real
estate agents coordinate various aspects of the closing.
Real estate brokers (and their agents) typically do not provide title service
such as title search or title insurance, do not conduct surveys or formal
appraisals of the property such as those required by lenders, and do not act
as lawyers for the parties, although they may "coordinate" these activities
with the appropriate specialists. Some real estate brokers may be
associated with loan officers who may help to finance buyers to make their
purchase. For ex: LICHFL
Regardless of whether a real estate agent assists sellers or buyers of real
estate, negotiating skills and knowledge of financing options are
important.
Services provided to seller as client
Upon signing a listing contract with the seller wishing to sell the real
estate, the brokerage attempts to earn a commission by finding a buyer for
the sellers' property for highest possible price on the best terms for the
seller. In Canada, most provinces' laws require the real estate agent to
forward all written offers to the seller for consideration or review.
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To help accomplish this goal of finding buyers, a real estate agency
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commonly does the following:[citation needed]

31. Listing the property for sale to the public, often on an MLS, in addition to
any other methods.
Based on the law in several states, providing the seller with a real property
condition disclosure form, and other forms that may be needed.
Preparing necessary papers describing the property for advertising,
pamphlets, open houses, etc.
Generally placing a "For Sale" sign on the property indicating how to
contact the real estate office and agent.
Advertising the property. Advertising is often the biggest outside expense
in listing a property.
In some cases, holding an open house to show the property.
Being a contact person available to answer any questions about the
property and to schedule showing appointments
Ensuring buyers are prescreened so that they are financially qualified to
buy the property; the more highly financially qualified the buyer is, the
more likely the closing will succeed.
Negotiating price on behalf of the sellers. The seller's agent acts as a
fiduciary for the seller. This may involve preparing a standard real estate
purchase contract by filling in the blanks in the contract form.
In some cases, holding an earnest payment cheque in escrow from the
buyer(s) until the closing. In many states, the closing is the meeting
between the buyer and seller where the property is transferred and the title
is conveyed by a deed. In other states, especially those in the West,
closings take place during a defined escrow period when buyers and
sellers each sign the appropriate papers transferring title, but do not meet
each other.
Several types of listing contracts exist between broker and seller. These may
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be defined as:
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Exclusive right to sell

32. In this type of agreement, the broker is given the exclusive right to market
the property and represents the seller exclusively. This is referred to as
seller agency. However, the brokerage also offers to co-operate with other
brokers and agrees to allow them to show the property to prospective
buyers and offers a share of the total real estate commission.
Exclusive agency
An alternative form, "exclusive agency", allows only the broker the right
to sell the property, and no offer of compensation is ever made to another
broker. In that case, the property will never be entered into an MLS.
Naturally, that limits the exposure of the property to only one agency.
Open listing
This is an agreement whereby the property is available for sale by any real
estate professional who can advertise, show, or negotiate the sale.
Whoever first brings an acceptable offer would receive compensation.
Real estate companies will typically require that a written agreement for
an open listing be signed by the seller to ensure the payment of a
commission if a sale should take place.
Although there can be other ways of doing business, a real estate
brokerage usually earns its commission after the real estate broker and a
seller enter into a listing contract and fulfill agreed-upon terms specified
within that contract. The seller's real estate is then listed for sale,
frequently with property data entered into an MLS in addition to any other
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ways of advertising or promoting the sale of the property.
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33. Net listings:
Property listings at an agreed-upon net price that the seller wishes to
receive with any excess going to the broker as commission are not legal in
most, if not all, states.
Brokerage commissions
In consideration of the brokerage successfully finding a satisfactory buyer
for the property, a broker anticipates receiving a commission for the
services the brokerage has provided. Usually, the payment of a
commission to the brokerage is contingent upon finding a satisfactory
buyer for the real estate for sale, the successful negotiation of a purchase
contract between a satisfactory buyer and seller, or the settlement of the
transaction and the exchange of money between buyer and seller. The
median real estate commission charged to the seller by the listing (seller's)
agent is 6% of the purchase price. Typically, this commission is split
evenly between the seller's and buyer's agents, with the buyer's agent
generally receiving a commission of 3% of the purchase price of the home
sold.
Local real estate sales activity usually dictates the amount of commission
agreed to. Real estate commission is typically paid by the seller at the
closing of the transaction as detailed in the listing agreement.
RESPA
Real estate brokers who work with lenders may not receive any
compensation from the lender for referring a residential client to a specific
lender. To do so would be a violation of a United States federal law
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known as the Real Estate Settlement Procedures Act (RESPA).
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Commercial transactions are exempt from RESPA. All lender

34. compensation to a broker must be disclosed to all parties. A commission
may also be paid during negotiation of contract base on seller and agent.
Lockbox
With the sellers' permission, a lockbox is placed on homes that are
occupied and, after arranging an appointment with the home owner, agents
can show the home. When a property is vacant or where a seller may be
living elsewhere, a lockbox will generally be placed on the front door. The
listing broker helps arrange showings of the property by various real estate
agents from all companies associated with the MLS.
The lockbox contains the key to the door of the property and the box can
only be opened by licensed real estate agents (often only with
authorization from the listing brokerage), by using some sort of secret
combination or code provided by the brokerage or the issuer of the
lockbox.
Shared commissions with co-op brokers
If any buyer's broker (or any of his/her agents) brings the buyer for the
property, the buyer's broker would typically be compensated with a co-op
commission coming from the total offered to the listing broker, often
about half of the full commission from the seller. If an agent or
salesperson working for the buyer's broker brings the buyer for the
property, then the buyer's broker would commonly compensate his agent
with a fraction of the co-op commission, again as determined in a separate
agreement. A discount brokerage may offer a reduced commission in the
event no other brokerage firm is involved and no co-op commission is
paid out.
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35. If there is no co-commission to pay to another brokerage, the listing
brokerage receives the full amount of the commission minus any other
types of expenses.
Potential points of contention for agents
Controversy exists around how commissions paid to real estate agents are
disclosed to buyers and the effect additional seller incentives may have on
the negotiation process and final purchase price.
If a listing agent sells a property above the listed price, they make
additional income. In theory, this motivates them to get top dollar for the
seller. However, if an agent representing a buyer obtains a lower sales
price for their client, then they make a lower commission. Thus, it could
be considered to be in the agent's best interest to advise his client to
purchase the property at a higher price.
Another potential conflict of interest exists when a listing agent in a very
active real estate market sells properties quickly at low prices to benefit
from high sales volume.
Buyers as clients.
Some brokerages represent buyers only and are known as exclusive buyer
agents (EBAs). Consumer Reports states, "You can find a true buyer's
agent only at a firm that does not accept listings." The advantages of using
an Exclusive Buyer Agent is that they avoid conflicts of interest by
working in the best interests of the buyer and not the seller, avoid homes
and neighborhoods likely to fare poorly in the marketplace, ensure the
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buyer does not unknowingly overpay for a property, fully informs the
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buyer of adverse conditions, encourages the buyer to make offers based on

36. true value instead of list price, which can sometimes be overstated, and
works to save the buyer money. A buyer agency firm commissioned a
study that found EBA purchased homes were seventeen times less likely
to go into foreclosure.
A real estate brokerage attempts to do the following for the
buyers of real estate only when they represent the buyers with
some form of written buyer-brokerage agreement:
Find real estate in accordance with the buyers needs, specifications, and
cost.
Takes buyers to and shows them properties available for sale.
When deemed appropriate, prescreens buyers to ensure they are
financially qualified to buy the properties shown (or uses a mortgage
professional, such a bank's mortgage specialist or alternatively a Mortgage
broker, to do that task).
Negotiates price and terms on behalf of the buyers and prepares standard
real estate purchase contract by filling in the blanks in the contract form.
The buyer's agent acts as a fiduciary for the buyer.
Due to the importance of the role of representing buyers' interests, many
brokers who seek to play the role of client advocate are now seeking out
the services of Certified Mortgage Planners, industry experts that work in
concert with Certified Financial Planners to align consumers' home
finance positions with their larger financial portfolio(s).
Buyers as customers
In most states, until the 1990s, buyers who worked with an agent of a real
estate broker in finding a house were customers of the brokerage, since the
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broker represented only sellers.
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37. Today, state laws differ. Buyers and/or sellers may be represented.
Typically, a written "Buyer Brokerage" agreement is required for the
buyer to have representation (regardless of which party is paying the
commission), although by his/her actions, an agent can create
representation.
Find real estate in accordance with the buyers' needs, specifications, and
affordability.
Take buyers to and shows them properties available for sale.
When deemed appropriate, prescreen buyers to ensure they are financially
qualified to buy the properties shown (or uses a mortgage professional to
do that task).
Assist the buyer in making an offer for the property.
The impact of globalization on real estate brokers' activities
Globalization has had an immediate and powerful impact on real estate
markets, making them an international working place. The rapid growth of
the Internet has made the international market accessible to millions of
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consumers. A look at recent changes in homeownership rates illustrates
this. Minority homeownership jumped by 4.4 million during the 1990s,
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38. reaching 12.5 million in 2000, according to the Fannie Mae Foundation.
Foreign direct investment in U.S. real estate has increased sharply from
$38 billion in 1997 more than $50 billion in 2002 according to U.S. 2000
Census data.
Most local real estate agents view the foreign market as a significant
revenue potential and may have already worked with international clients
in their local market, new immigrants or more sophisticated investors from
different cultures and from other countries. For example, they provide
value-added services that help overseas relocation employees figure out
which inoculations their children need and how to register a car in the
United States. Real estate brokers want to keep central to the transaction,
protect the best interests of their members and address the unique needs of
each multicultural global client by acquiring specialized training and
designations.
In 2007 the Mexican Association of Real Estate Professionals in Mexico,
AMPI, and the NAR, National Association of Realtors in the United
States, signed a bilateral contract for international real estate business
cooperation. Also at the local level, many other state and local
associations are helping other countries achieve the same result. For
instance, in New Mexico, a historically multicultural state, under the
RANM, Realtor Association of New Mexico and the President's Advisory
Council, is looking into forming an ambassador association to help a
foreign country into signing a bilateral agreement with the NAR. In New
Mexico, there are 4500 licensed real estate professionals and only 14 or 15
CIPS designees, out of whom, only six speak a language other than
English.
A "Management Guide For Real Estate Associations" exists, which is a
publication of the International Real Property Foundation (IRPF), which
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was funded by the National Association of Realtors (NAR) and the
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Reaume Foundation.The IRPF, in its Web site, regarding The Caux Round

39. Table (CRT) principles, states that: "Ethical perceptions and international
business is highly influenced by cultural differences. Because of cultural
and ethical relativism, real estate business that is conducted across
national boundaries may discover ethical conflicts. Major ethical issues
that complicate international business activities include sexual and racial
discrimination, price discrimination, bribery, harmful products, and
telecommunications (enforcement of country-specific laws, copyrights,
and questionable financial activities). A good document for reference in
developing an association Code of Ethics in conjunction with such
principles is "The Caux Round Table Business Principles of Ethics"
(1995).
Because of the particularities and the nature of international transactions
between real estate agents of different countries, the Real Estate Code of
Ethics of each country are excellent to regulate the ethics of each member
in its own jurisdiction, but in the case of complex international real estate
transactions were sometimes ethical conflicts arise, there is a need to have
a group of principles more adjusted to international transactions were two
or more real estate agents of different countries participate in real estate
brokerage businesses. For example, in the NAR-FECEPAC memorandum
of understanding of February 2003, a commitment was set to promote and
adopt the respective code of ethics,standards and norms, but there is
nothing specific mentioned for complex ethical matters in international
transactions. There was surely a commitment to cooperate with a foreign
agent to work in local markets different from the foreign agents market.
As an example, it can be noticed that the NAR-CSBR Bilateral
Cooperation Agreement of November 12, 2001 also created a commitment
to promote and enforce mutually acceptable codes of ethics (Code of
Ethics meaning those that been promulgated by the cooperating
39
associations for use in their respective countries, each of which is
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acknowledged to be acceptable to the other). Again, as the IRPF says

40. "Ethical perceptions and international business is highly influenced by
cultural differences. Because of cultural and ethical relativism, real estate
business that is conducted across national boundaries may discover ethical
conflicts". There is also nothing specific mentioned for complex ethical
matters in international transactions, whilst the agreements do provide to
seek to facilitate business opportunities for members of the cooperating
associations who may be working in each others markets, and also
initiating and hosting trade missions. The bilateral agreement between
NAR and CSBR also states that both parties agree to enforce their
respective codes and advice the other of subsequent modifications to its
code of ethics.
Some association members of Central American Real Estate Associations
who are practicing agents and are involved in real life transactions on a
daily basis have expressed their concern in the sense that at the moment of
ethical conflicts with foreign colleagues, they have not had at hand any
practical instrument that can serve to resolve ethical conflicts (even though
agreements that make reference to code of ethics do exist).
Because the Caux Round Table principles are designed by corporate
leaders and provide a model of how a good corporate citizen behaves in
the countries and markets where it penetrates being a foreign entity, this
principles could serve to reduce the fear of local brokers to foreign
competition, provide an ethical framework against asymmetry of
participants in free trade of services in our industry, and will permit that
Central American association members that see an advantage in opening
their country markets to competition, and that see advantages in having
foreign strategic partners to work our their own local markets (e.g.: local
Central American brokers partnering with United States brokers to work
Central American Markets), keep promoting competition, globalization of
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business, and free trade of services.
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41. A person may attend a pre-license course lasting 60 hours and then be
tested by the state for a real estate agent's license. Upon passing, the new
licensee must place their license with an established real estate firm,
managed by a broker. Requirements vary by state but after some period of
time working as an agent, one may return to the classroom and test to
become a broker. Brokers may manage or own firms. Each branch office
of a larger real estate firm must be managed by a broker.
States issue licenses for a multiyear period and require real estate agents
and brokers to complete continuing education prior to renewing their
licenses. Many states recognize licenses from other states and issue
licenses upon request to existing agents and firms upon request without
additional education or testing however the license must be granted before
real estate service is provided in the state.
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42. A Day in the life of a Real Estate Agent/Broker
Buying or selling a house or apartment is one of the biggest decisions of a
person’s life, and real estate agents and brokers help people negotiate what can be
a confusing process. Though both are often called real estate agents, agents and
brokers have different roles. The broker has more administrative responsibility.
There is usually one broker per estate, but often many agents are working with
clients who are interested in the property. When someone wants to sell or rent his
property he usually calls a real estate agent. A large chunk of the agent’s day may
be spent on the phone obtaining listings for her agency. The agent also arranges to
advertise the properties she is showing, and may visit each property before it is
shown to clients. She needs to know about everything from floor plans to heating
systems to cesspools-she’s a matchmaker, and she’s got to know both sides of the
equation. It’s also important for an agent to be familiar with the neighborhoods
she works in, so she can counsel her clients about a property’s fair market value.
A good real estate agent is informed about things like schools, tax rates, and
public transportation systems, and should be aware of going mortgage rates. A
real estate agent must manage delicate price negotiations when an interested
buyer and seller hook up. ―Negotiating skills are not just important but critical for
real estate agents,‖ as one respondent put it. The agent also coordinates the
―closing‖ when a property is sold, which means the actual signing of papers and
transfer of a property’s title. Networking is a big part of the job-most real estate
agents develop a group of attorneys, mortgage lenders, and contractors to whom
they refer their clients. Finally, a real estate agent should be able to discern and be
sensitive to a client’s needs during what may be an uncertain time. In order to be
available when their clients have free time, real estate agents work many evenings
and weekends. An experienced agent will sometimes avoid some of the weekend
hours by having an ―open house‖ and drafting a new agent to go and answer
potential buyers’ questions. Commercial real estate agents’ jobs involve more
42
research on market trends and an even more detailed attention to the needs of
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43. buyers. Since they work longer on each deal, commercial agents and brokers
make fewer sales than residential agents but receive higher commissions.
About the only things real estate agents have in common in terms of preparation
are high school diplomas and communication skills. More and more people are
entering the field with college degrees, however, and some colleges even offer
courses in real estate. These may be helpful, as would other business courses, but
most of the learning takes place after you’ve entered the field. In fact many real
estate agents come to the field from other, unrelated careers, attracted by the
flexible hours or the potential for part-time work. Before you can use the title
―Realtor‖ or become a member of the National Association of Realtors you must
have a real estate license. Every state requires that a broker or agent undergo a
series of examinations and log some experience before she is granted this license.
Many real estate boards offer preparatory classes. Once you have the license, it’s
usually renewed yearly without your having to repeat the tests. But each state has
its own test, so if you want to work in a different state you’ve got to pass their
exam.
Associated Careers
Careers associated with real estate often involve working with realtors. On the
mortgage end, loan officers arrange the conditions for financing home purchases
and act as liaisons between buyers and banks. Another possibility is the field of
real estate law, which requires going to law school. Agents seeking further
opportunities within the field have a few options, most of which involve setting
up shop independently of brokers. Appraisers, for example, assess the fair market
values of properties. Real estate counselors, likewise, are independent advisors
who offer advice to buyers about the suitability of properties they are interested
in.
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What Real Estate Brokers and Sales Agents Do

44. Real estate brokers and sales agents help clients buy, sell, and rent properties.
Brokers and agents do the same type of work, but brokers are licensed to manage
their own real estate businesses. Sales agents must work with a broker.
Work Environment
A majority—about 57 percent—of real estate brokers and sales agents were self-
employed in 2010. Although they often work long and irregular hours, many are
able to set their own schedules.
How to Become a Real Estate Broker or Sales Agent
In every state and the District, real estate brokers and sales agents must be
licensed. To become licensed, candidates must be high school graduates, be at
least 18 years old, and complete a particular number of hours of real estate
courses.
Functions of PSD
Though there are different types of consultants/intermediaries for property
services, there is no integrated approach to the various ancillary services that a
customer needs. There is thus a need for an integrated player and to bridge that
gap, LIC Housing Finance Ltd have opened its Property Services Division, which
shall be a "one-stop-shop" to provide RELIABLE advice, services and assistance
to prospective property buyers in an INTEGRATED, CUSTOMISED and TIME-
BOUND manner. LICHFL Property Services will provide its services for the
44
following :-
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45. Assisting the customer in selecting the property (Marketing & Sales of properties;
either residential or commercial).
Organising site visits and Booking of Properties.
Assisting the customer in completing the documentation and legal formalities like
drawing up the agreements, registration etc.
Assisting the customer in obtaining a home loan from a financial institution
dealing with Home Loans.
Assisting the customer in possession/registration/housewarming of the property.
Assisting the customers in selection of professionals/sourcing of materials for
interiors.
Organizing site visits and meeting with the developers/builder to complete the
transaction.
Assisting the customer in obtaining a home loan from LICHFL or from a lender
of their choice.
Assisting the customers in selecting the property which suits their requirements
and budget.
Assisting the customer in completing documentation & legal formalities like
agreements, registration, etc.
Monitoring the stage of construction and advising the customer for making
installment payments.
Assist in placing the property on rent, if the customer so desires.
Assist in selling the property if desirous.
Assisting the customer in selection of professionals/ sourcing of materials for
interiors.
Assisting the customer in possession / housewarming.
Tips for Customers
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There are two aspects of Home Buying: Property Search and Home Loan

46. 1. Property search
Some of the primary concerns of Home Buyers are matters pertaining to the
property's title, its pricing, the developer’s track record, and so on.
2. Home Loan
After spending time and effort to research and find your dream home,
selection of a Home Loan company and the loan product should not be a
hasty decision.
The main issues besides the rate of interest offered, would be the
company’s loan procedure, product range, quality of services offered and
safe retrieval of the Title Deed of the property deposited as a security for
the housing loan, on completion of the loan tenure.
You should also be aware of how you can enhance your loan eligibility
without the burden of a higher EMI. LICHFL offers flexibility to
customers, enhances their loan eligibility, helps them optimize tax benefits
and customize EMIs according to their repayment capacity, so the
customer is able to repay the loan comfortably.
Further, when you take a home loan you enter into a long-term financial
commitment, as home loans are long-term loans where the commitment is
for a period of 15 to 20 years. In case of any unforeseen event during this
period, it is better to make sure that your family is not burdened with the
loan liability. Hence, to take care of uncertainties during such a long
period, it is better to take a Home Loan Insurance.
And finally, it is best to go with companies that have established
46
themselves over the years, as they are more flexible and will be able to
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offer you customized services. The other advantage is this will also help

47. you to encash on the vast pool of knowledge that comes with their
experience.
The LICHFL Advantage
Organized, Integrated and Professional Approach.
Strong Brand - Synonymous with Transparency, Trust and Credibility.
Experience in the field of real estate and financing.
Vast Network of Agency Force and Branch Network.
Large pool of experienced staff.
Additional in-house facility & expertise to provide home finance to customers.
Reliable advice as per requirements and budget of customer at the best terms and
price.
Highly experienced team of Over 773 Direct Sales Agent (DSA’s),3400 Home
Loan Agents (HLA’s) and 615 Customer Relationship Associates.
Existing network & relationship with service providers.
In-house facility to provide home finance.
Expertise in Legal and Technical Scrutiny of Property
Relationship with leading Developers across the country.
Thorough understanding of processes.
Punchline - "Are you sure that you will get the desired loan, after you have
47
booked the property? Now, book your property through LIC HFL Property
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48. Services and have peace of mind." All services - from booking of property till
possession; under one roof. Fair and transparent deal.
Reasons for Choosing LICHFL PSD Home Search Facility:
• Employ a comprehensive database of builders, development projects and
available real estate to identify properties that will meet your individual
requirements.
• Regularly update our database to ensure that you are constantly filled in real
estate opportunities.
• In depth cognizance of various builders & real estate projects empowers us to
fine tune your search. We work within the budget and area specified by you.
• Offer unbiased advice.
• Offer special schemes and attractive rates, help you negotiate the best price and
advise you on payment schedules.
• Assist to get the best deals on Home Loans.
The working of Property Service Division depends on the
following three steps:
1. Tie up with the builders.
2. Customer make-up
3. Documentation
A 7-step Process of Identifying a Property for Purchase or Rent
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• Step 1: Register with them, free of cost
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49. • Step 2: Describe your requirement, budget and preferred locality
• Step 3: They will match your requirements with properties in our database.
• Step 4: Their counselor would then fix an appointment with you and take you to
the property sites short-listed by you.
• Step 5: After visiting the sites if one finalise a property, they would assist to
negotiate the best terms and price
• Step 6: They will also assis in completing the registration formalities for
acquiring your property
• Step 7: And also assist to get the best deals on home loans.
The company would not enter into property development and construction of
buildings but would take care of all the requirements of the customers including
valuation, arranging loan, and registration.
LICHFL-A one-Stop –Shop for services
Assistance in analyzing the requirements.
Selection of property at reasonable/ affordable price.( for Individual/ Group)
Completing the Transaction.
Guiding for Best Home Loan and assistance in providing loan.
Help in arranging Legal and Technical Services.
Help in Selection of Professionals/ material/ interior.
Help in taking Possession.
Help in letting out the property.
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50. Services Offered:
Select the property of your choice.
Obtain a home loan from the lender of your choice.
Assistance in completing the documentation and legal formalities.
Monitoring the stage of construction and advising the customer in making
installment payments.
Assistance in selection of professionals/sourcing of materials for interiors.
Possession/housewarming of the property.
Letting out the property on rent.
Research Methodology
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51. Research Methodology
Statement of The Problem
This Study will help us to understand the consumer’s satisfaction about LIC HFL
services and products. This study will help the company to understand, how a
consumer selects, organizes and interprets the Quality of service and product
offered by them.
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52. The market is more aware and realistic about investment and returns from
financial products. In this background this study tries to analyze the customer
satisfaction towards services in general and LICHFL in particular.
Need for The Study
The deeper the company understands of consumer’s needs and satisfaction, the
earlier the product or service is introduced ahead of competition, the greater the
expected contribution margin. Hence the study is very important.
This study will help companies to customize the service and product, according to
the consumer’s need.
This study will also help the companies to understand the experience and
expectations of the existing customers.
Scope of the Study
This study is limited to the consumers with in Lucknow city. The study will be
able to reveal the preferences, needs, satisfaction of the customers regarding the
real estate, It also help them to know whether the existing products or services
they are offering are really satisfying the customer’s needs.
Objective Of The Study
To have an insight into the attitudes and behaviors of customers.
To find out the differences among perceived service and expected service.
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To produce an executive service report to upgrade service characteristics.
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To understand consumer’s preferences.

53. To access the degree of satisfaction of the consumers
Research Methodology
A descriptive study tries to discover answers to the questions who, what,
when, where, and, sometimes, how. The researcher attempts to describe or
define a subject, often by creating a profile of a group of problems, people,
or events.
Such studies may involve the collection of data and the creation of a
distribution of the number of times the researcher observes a single event
or characteristic (the research variable), or they may involve relating the
interaction of two or more variables. Organizations that maintain
databases of their employees, customers, and suppliers already have
significant data to conduct descriptive studies using internal information.
Yet many firms that have such data files do not mine them regularly for
the decision-making insight they might provide. This descriptive study is
popular in business research because of its versatility across disciplines. In
for-profit, not-for-profit and government organizations, descriptive
investigations have a broad appeal to the administrator and policy analyst
for planning, monitoring, and evaluating. In this context, how questions
address issues such as quantity, cost, efficiency, effectiveness, and
adequacy.
Descriptive studies may or may not have the potential for drawing
powerful inferences. A descriptive study, however, does not explain why
an event has occurred or why the variables interact the way they do.
Sample Size
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54. Sample size denotes the number of elements selected for the study. For the
present study, 100 respondents were selected at random. Out of these 100 some of
them were LIC’s Leading agents, development Officers, teachers, staff of LIC etc.
Sampling Method
A sample is a representative part of the population. In sampling technique,
information is collected only from a representative part of the universe and the
conclusions are drawn on that basis for the entire universe.
A convenience sampling technique was used to collect data from the respondents.
Method OF Data Collection
To know the response, the researcher used questionnaire method. It has
been designed as a primary research instrument. Questionnaires were
distributed to respondents and they were asked to answer the questions
given in the questionnaire.
The questionnaires were used as an instrumentation technique, because it
is an important method of data collection. The success of the questionnaire
method in collecting the information depends largely on proper drafting.
So in the present study questions were arranged and interconnected
logically. The structured questionnaire will reduce both interviewers and
interpreters bias.
Further, coding and analysis was done for each question’s response to
reach into findings, suggestions and finally to the conclusion about the
topic.
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Types of Data

55. Every decision poses unique needs for information, and relevant strategies can be
developed based on the information gathered through research. Research is the
systematic objective and exhaustive search for and study of facts relevant to the
problem
Research design means the framework of study that leads to the collection and
analysis of data. It is a conceptual structure with in which research is conducted. It
facilitates smooth sailing of various research operations to make the research as
effective as possible.
Primary Data
Primary data are those collected by the investigator himself for the first
time and thus they are original in character, they are collected for a
particular purpose.
A well-structured questionnaire was personally administrated to the
selected sample to collect the primary data.
Limitations of the Study
Although the study was carried out with extreme enthusiasm and careful planning
there are several limitations, which handicapped the research viz,
1. Time Constraints:
The time stipulated for the project to be completed is less and thus there are
chances that some information might have been left out, however due care is
taken to include all the relevant information needed.
2. Sample size:
Due to time constraints the sample size was relatively small and would definitely
have been more representative if I had collected information from more
respondents.
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3. Accuracy:

56. It is difficult to know if all the respondents gave accurate information; some
respondents tend to give misleading information.
4. It was difficult to find respondents as they were busy in their schedule, and
collection of data was very difficult. Therefore, the study had to be carried out
based on the availability of respondents.
The working of Property Service Division depends on the following
three steps:
1. Tie up with the builders.
2. Customer make-up
3. Documentation
Tie up with the builders:
PSD of LICHFL have tie ups with many known and unknown builders. They have a
very good relationship with Ansal –Api shushant City, DLF, Parsvanath, Viraj
Constructions, Omaxe, Eldeco.
Before tying up with the builder or a customer a memorandum of understanding is
signed between both the parties.
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57. Report on the construction companies
Company Name: ANSAL API
Project: Sushant Golf City
Address: Sahid Path, Sultanpur Road, Lucknow.
Details: Providing Villas, 2BHK, 3BHK, 1BHK flats
Present Condition: Construction on phase one is still going on.
Availability: Almost all the sites are sold out, presently the construction is going
on Sushant Media Enclave but there are availabilities.
Rate: Ranging between Rs 2400 per square feet to Rs 2700 per square feet
depending upon the floors.
Total Cost: About 42 lacs for a 3 BHK, 35 lacs for a 2 BHK, 30 lacs for 1BHK
For villas it starts from 52 lacs o 1 crore
Possessions: For Media Enclave, its about 4 yrs to 5 yrs and 3 yrs for celebrities
cities and others.
Analysis: Ansal city on Sahid Path is going to start soon. As per now there is not
any kind of work or development in their nearby surroundings but there are full
chances of possible development in recent years. There Media Enclave in
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Sultanpur Road presently no construction work is going on but going to start
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soon. There is a great chance of development in that surrounding as U.P.

58. Government has proposed an I.T. Park in Gajaria Farm which is adjacent to the
sites.
Possible Demerits: Any of the phases is fully completed, only construction work
is going on in phase one and two. Railway line is going through the city. The
whole site is situated in high flood prone area due to the presence of Indira Canal
and Gomti River.
Financial Tie-ups: Their main financial tie-up is with LICHFL and they are in
great favor of LIC. They are providing 80% to 85% finance and they are giving
1% discount on the total cost to the customers.
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59. Company Name: ELDECO
Project: Eternia
Address: Sitapur, Lucknow-
Details: 2BHK, 3BHK, 4BHK flats
Present Condition: Construction on all the three towers is going and up to 6th
floor it is completed.
Availability: Tower no 2 is sold out, some flats are available in tower 1 and 3
Rate: Ranging between Rs 3500 per square feet to Rs 3700 per square feet
depending upon the floors.
Total Cost: About 44 lacs for a 3 BHK, 35 lacs for a 2 BHK, 52 lacs for 4BHK
Possessions: They will give the possessions in 2 yrs to 3 yrs.
Analysis: Eldeco Eternia on sitapur road is going to start soon. Nearby
surroundings are fully developed as eternia is in city only. One of the advantage is
very near to engineering college and L.U.
Financial Tie-ups: Their main financial tie-up is with Banks Mainly SBI and
other govt. banks. They are not favoring LIC HFL or any other housing financial
company as in case if we take loan from housing finance then they will not
provide 4% discount to the customers ( they provide 4% discount if we take loan
from banks). They are providing 80% and they were ready to give 4% + approx
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6% discount on the total cost to the customers.
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60. Company Name: ELDECO
Project: Eldeco City
Address: IIM Road, Lucknow-
Details: Duplex and simplex villas + 2bhk and 3bhk flats.
About: Eldeco city is spread over 113 Acres with a large portion dedicated to
greenery more than 1000 independent villas and 1500 apartments.
Present Condition: Construction on phase 1 is going on almost 50%
completed, work on apartments is yet to start. Construction on phase 2 will be
start in 1 year. Now they are booking for phase 1 only
Availability: All duplex are sold out, 5 simplex villas are available. Out of 165
apartments 65 are sold out.
Rate: Ranging between Rs 1700 per square feet to Rs 2200 per square feet for
villas and Rs 3100 per square feet for apartments depending upon the floors.
Total Cost: About 63 lacs to Rs 1 Crore for a duplex villas (vary as per the
location and size), approx 47 lacs to 67 lacs for a simpex villas (vary as per
location and size), 35 lacs for 2BHK and about 43 lakh for 3bhk (vary as per
floors)
Possessions: They will start their possessions from august 2012. And for
Current booking (villas) they will give the possession in 1 year. For Apartments
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they will give the possessions in 2 to 3 years.
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61. Analysis: Eldeco City is on IIM road is going to start soon. As per now there is
not any kind of work or development in their nearby surroundings but there are
full chances of possible development in upcoming years. City is located nearby
IIM lucknow.
Possible Demerits: There major drawback is that site is located very far from
city.
Financial Tie-ups: Their main financial tie-up is with Banks Mainly SBI and
other govt banks. They are not favoring LIC HFL or any other housing financial
company as in case if we take loan from housing finance then they will not
provide 4% discount to the customers ( they provide 4% discount if we take loan
from banks). They are providing 80% and they were ready to give 4% + approx
6% discount on the total cost to the customers.
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62. Company Name: OMAXE Ltd.
Project: Omaxe Residency Lucknow
Address: Gomti Nagar Extension , Shaheed Path
Details: Providing 2BHK,2BHK+ Servant room and 3BHK,
Present Condition: Construction is still going on and may be complete in the
one year.
Availability: Many flats are sold out only few are remaining .flats are also
available in resale
Rate: Rs 2400 per square feet .
Total Cost: About 26 lacs for 2 BHK, 28 lacs for a 2 BHK + Servant room, 33
lacs for 3BHK ( These are cost if we are purchasing on Cash down Payment) . In
case of Installment Plan Cost will be 6% more.
Possessions: Possession time 18 months to 36 months.
Analysis: Omaxe residency is on Sahid Path, gomti nagar extension is going to
start soon. As per now there is not any kind of work or development in their
nearby surroundings but there are full chances of possible development in recent
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years. Presently a small village is adjacent to the site.
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63. Possible Demerits The whole site is situated in high flood prone area due to the
presence of Indira Canal and Gomti River.
Financial Tie-ups: Their main financial tie-up is with all the Banks and housing
finance companies. They are providing 80%. They are giving 2% discount on the
total cost to the customers. Discount may be more in further stage.
Company Name: RG Infracity (p) ltd.
Project: RG EUPHORIA LICKNOW.
Address: Vrindavan Youjna , Shaheed Path
Details: Providing 2BHK, 3BHK and 4BHK,
Present Condition: No construction work is going on. Only land is there.
Availability: Few are sold out . Many flats are remaining.
Rate: Rs 2500 per sqft .
Total Cost: About 24 lacs to 27 lakh for 2 BHK, 32 lacs to 35 lacs for a 3 BHK,
44 lacs to 47 lacs for 4BHK ( These are cost if we are purchasing on Cash down
Payment) . In case of Installment Plan Cost will be 10% more.
Possessions: Possession time 36 months.
Analysis: Euphoria is on Sahid Path, Vrindavan youjna of awas vikash. No
construction work is started till now. As per now there development in their
nearby surroundings and there are more chances of possible development in
recent years because of nearness of airport and Kanpur road.
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64. Financial Tie-ups: Their main financial tie-up is with all the Banks and housing
finance companies. They are providing 80%. They are not providing any type of
discount.
Company Name: DLF India Ltd.
Project: Garden city, Lucknow
Address: Raibarelly road , purseni , Lucknow.
Details: Providing plots, Apartment work will start in one year.
Present Condition: Construction is going on in building infrastructure like
roads etc.
Availability: plots are sold out in phase A and B only few plots are remaining in
phase C and D .
Rate: Rs 1500 per square feet .
Total Cost: Its Started From 44 lakh to 1.5 crore.
Possessions: Possession 24 months.
Analysis: Garden City is on Raibareely road, Purseni lucknow is going to start
soon. As per now there is not any kind of work or development in their nearby
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surroundings but there are full chances of possible development in recent years as
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that road is going to convert in 4 lane. Sgpgi is 5 k.m away from the site.