Personal Finance

Get the most on your property sale

Meera Siva | Updated on January 09, 2018

Here is a checklist for home owners to avoid the usual hassles

Property is an illiquid asset and selling it is often a long-drawn activity. Many home owners end up becoming frustrated not just with the process but also the result — delays, lack of genuine buyers, miscommunication due to use of agents and settling for a lower sale price.

However, some simple precautions can help prevent such hassles and ensure that owners are better prepared to deal with the practical realities.

Clean documents

The first step is ensuring that there are no pending legal issues related to the property. For example, if it is an ancestral home or land, make sure the ownership is clearly established. Also, water, property and other tax payments must be up to date. If the property is part of a housing community, make sure all dues are cleared and receipts are maintained. Information on any loans must also be kept handy.

The property must not have any title or other issues. For example, plots must be approved by the authorised government authorities. All approvals —for original construction and later modifications — must be in place. This will avoid delays due to questions raised by government authorities or potential buyers.

Good condition

You must also take steps to get the property in a good condition. For example, if it is a plot of land, it helps to clear overgrowth and mark the boundaries clearly. For homes, you must do major repair work, if you can. If you are unable to do it or prefer that the buyer takes care of it, you can get a quote for the work from a local contractor. This gives a base for negotiating with the buyer on any price reduction to take care of the work.

Painting, cleaning the premises and ensuring there are no leaks or electrical issues also help. But this must not be done with the idea of covering up issues. Badly done patch-up raises suspicion about any hidden problems and may be counter-productive.

If the house is older than, say, 30 years, it also helps to get a structural evaluation done and an informal report kept handy to be shared with the buyers.

Right price

Each property is unique and setting the right price is not easy. You can take the help of a property valuation expert who can give an assessment of your property, for a fee.

You must also do your own research on the market conditions in the locality. Many property portals give you ample data — asking price, size, features — and provide photos. You can use these to make an estimate.

However, the prices you see on the website often do not tell the full story. To know the market reality, it helps to make enquiries as a buyer, on properties that are comparable to yours.

It is also advisable to discuss with your real estate agent to be aware of the sale trends in the local area. Talk with a few agents, possibly as a buyer, to know the price, availability, terms and speed at which property transactions are happening. The price you set must ideally give room for buyers to negotiate but not be so high that it fails to trigger their interest.

Proper reach

As with any sale, you must take steps to ensure that the property details reach potential buyers. There are many online portals that let owners advertise, but the onus is on you to give all the relevant details. For example, you must post pictures that are clear and provide contact information that is active and reachable.

Property is still a very offline market and hence online alone may not get the job done. You cannot ignore the traditional method of using brokers. With the new Real Estate Regulatory Act (RERA), brokers are required to be registered and are liable for punishment if they give misinformation. However, it may take some time to find a pool of registered brokers to pick. Until then, get their client references, talk with them and decide.

You can also avoid delays and stress by judging how genuine the buyer is. For example, some buyers may pay a token advance and stall the deal closing. This may be either because that is their tactic to frustrate the seller and renegotiate terms or they may be unable to arrange funds.

Take the help of your agent or other advisors to better evaluate buyers, create strong agreements and not get locked into deals that waste time.

The author is co-founder, RaNa Investment Advisors

Published on November 18, 2017

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