Selling your property,Things to Do

MY 100th Post under REAL ESTATE CATEGORY :)

There are many who wanted to dispose there property in India fearing the economic conditions prevailing there. But selling a flat is no piece of cake. Finding a buyer is task by itself and on top of it there are numerous other things to be done for successful completion of Sale.

Lets go thro quickly one by one.

a) Finding a buyer
Once you decide to sell,write a nice write up on the flat. Write can include, what it offers, when it will be completed. additional work in the flat. Wood work,false ceiling etc.

First post in magicbricks, you can send me a write up, i will post it in this blog, indiaproperty.com, indiaproperties.com, makaan, maxiproperty etc.Wait for response, see how the response is, if poor response then a hindu paper advt is worth it. It should cost around Rs 1000. Still no response, then changing the price might help.

If you are ready to pay atleast 1% to any brokers then get in touch with some realty firms, Hanureddy, hockey etc etc. keep this as last option. remember a broker also does what you do and also since he will know you very well, he will at some point even try to make you sell for less.Be firm when talking to brokerage firms regarding commisions. The best commision rate is 1%-1.25% and nothing more than that.

Nice photos of the property always helps to sell. A picture attracts more people than one without.

b) Pricing

Now that you found a buyer, price negotiations comes in picture. Is the price inclusive of car park, eb, corpus fund, amenity charges etc ??.

I would sugesst you price it all inclusive which would make it more attractive then just the flat price. Say if the current running rate by builder is 4100, then i would suggest an all inclusive price of Rs 3700 to start with. You can come down a bit by Rs 50-100 and finish the deal.

c) Appointing a POA Agent if you are a NRI

If you are not in India, then you need a give power of attorney to your Dad or wife or any relatives whom you believe. You need to get in touch with a lawyer who would go through the property documents and prepare an POA.

There is a misconception that POA needs to be in STAMP Paper and notorized by Indian Embassy etc. Its all not needed. Just ask your lawyer to send the POA draft to you in a word document, print it out here, go to your bank and get it notorized.When you send this to India, your Dad would need to get it adjucate the POA in court or local registration office.

The whole process should cost around Rs 2000-3000 or less including Lawyer fees. Depends on the lawyer.

d) Sale Agreement.

Suppose you sell your flat for 50 Lakhs, you have to pay capital tax on it for nearly 20%. If you are investing the gain from this sale into another flat and you dont have any other flat in your name, then you need not pay capital gain tax. Check your tax consultant for more info.

Buyer would prepare the sale agreement according to the money you are supposed to recieve. Incase there is a advance portion then those things should be included in the sale agreement.

e)Sale Deed and Buyers Loan process

If the seller is going for loan then you have provide him all the documents for loan. if the bank thro which seller is going is not approved for the property then the bank would do a legal work right from scratch which would take time. If the bank is already approved for the property, then banks can release the money within 15 days.

Then Buyer would prepare Sale DEED which would be used for registration. make sure your lawyer goes thro the sale deed and verify that the sale deed safe guards your interests.

f) Registration

Go the registration office and find out the guide line value of Land.

Buyer has to pay for UDS + Building.

When you sell the flat again, it is considered as RESALE and this is how it works

The registration cost for the new buyer is UDS * GUIDELINE VALUE + flat carpert area * building cost

Example if your flat is 1405 sq ft and UDS is 900 and assume building cost is around Rs 750 and the guideline value for land is Rs 1200

then the buyer would have to pay

900 * Rs 1200 + 1405 * 750. (some time people register car park also so car park sq ft say 120 * 1200)

So final reg amount for second sale is 900 * Rs 1200 + 1405 * 750 + 120 * 1200

all this holds good only when the buyer is buying using all cash. Incase he is going for the loan and say you sell the flat for say 60 lakhs then the buyer has to pay flat 9% (8% + 1% ) of 60 lakhs as reg fee.

In addition, there is bribe component which the buyer has to pay. It is around Rs 6000- 10000 depends on how much money the registrar wants to earn that day. :(

So be ready to spend some time for the sale.There might be lot of sleepness nights too :)

4 Comments

  1. Prem Kumar

    Congratulations on your 100th post. Keep up the good work. Your blog has been very good source for knowing what’s going on with Real Estate.

  2. Bribe component? dont tell me its still done blatantly?

  3. uday

    Bitterscotch,

    On any given day, you can visit the registrar office any where in Chennai and ask the buying party how much bribe has he paid.

    In one of the instances, the registrar was not there and he instructed a lady in velachery registration office to collect the bribe on his behalf.

    first the buying party paid Rs 3500, only to get a call again say that it was not enough. 2 days later, the buyer again went to the registration office and paid rs 2500 separetly.

    he spend nearly 6k as bribes. there is formailty when u buy second sale flat. the guys from registration office come and visit the flat siting inspection reason. for that u have to pay for auto and need to pay rs 300.

    Your paper wont move from registration office to Bank (Incase of Loan) or to you (Incase of cash purchase), if you wont give them money.

    If you ask me, why pay them, i have no reason. it is countless other things where our good old govt employees make money for the job they get paid.

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