“Buying your first house makes you feel like an adult. But, selling it makes you a child again,” someone wise once said. With no proper regulatory framework around real estate in the country, buying and selling real estate (even a house) is not easy.
If you are planning to sell your house to move into a new one or relocate, there are a few things you need to know before you trust the local estate agent or broker blindly. To know more, read on.
Know its worth: The first thing to do is know the exact value of the house you plan to sell. Getting in touch with the local estate agent is a good idea, but relying on him alone is not.
“Get in touch with a number of neighbourhood estate agents and also check for price trend tools available online for the prevailing market rate of properties in your area,” says, Aditya Verma, Chief Operating Officer and Executive Vice President, Makaan.com.
You could also check online property portals and see the going rates of similar properties (based on age and construction) in your area, to get an idea of the prevailing rates.
“Even as you do this, ensure that all your property papers are in place, you have paid your house tax, electricity bills are paid for and there are no dues pending for the society charges,” says, Vineet Singh, Business Head, 99acres.com.
Quick Fix: The next thing to do is give the interiors of your house a quick fix. If the house is more than 10-15 years old, one may have to update some stuff too.
“This is an added cost, but the returns on investment is really good. So, if you have Indian toilets replace them with Western ones. Replace the kitchen platform, with modular kitchen and the like,” Verma says. Get rid of those leakages, cracks in the wall, dripping faucets, even an economical chuna (limestone) paint job for those old walls will work.
Face lift: Unlike the quick fixes, giving your house a facelift could be more expensive since it deals with the exterior of the house. So paint the exteriors. If possible, get rid of some stuff from inside and outside the house. This will give an impression of more open space.
“If your house has a drive way, look into it, if there is a small garden or plants around your house, maintain them,” Verma says. Most experts say small things and cosmetic changes will add value to your house and you will get a much better price while selling. Make your house a visual delight to get a better deal.
List it online: Now, spread the word among family members, friends and your neighbourhood agent. You can also use online property portals to list your property. Most such portals offer basic services (like advertising the property) free of cost. But for added services, you will need to pay a small fee.
You should upload multiple pictures and multiple videos of your property. It’s best to give a detailed description of your property: age, construction, parking space availability and the like. Also highlight certain important facts about your property. More detailed the description, better are the chances of you getting multiple buyers. Do give your contact details on the site. Not only potential buyers will get in touch with you, a number of agents will too.
Agents: It’s good to approach several agents. This will help spread the word further. Also you can negotiate a better deal as far as the commission goes.
“In the primary market, the agents get a commission between 1-4 percent, while in the secondary market it’s 0.5-1 percent. Lesser the value of the property, higher the commission. For properties worth more than Rs 1 crore, the commission would be a smaller percentage. Keep in mind, that these are ball park figures and could change on case to case basis.
Other details: Due diligence is the key. “You will need to do proper due diligence to find out the payment capacity of the buyer and if he will be able to stick to the payment schedule,” Singh says. The validity of the buyer’s identities, PAN and the like, is a must. At this stage it is best to rope in a legal adviser who specialises in property matters, to look into legal agreements, paperwork and other legal checks. They would charge you a small fee of around Rs 5000-10,000 but it’s worth the cost.
After all, you don’t want some kind of an issue cropping up later. “Do not handover photocopies of your property documents to your agent. Give the photocopies only when you get a substantial advance,” Singh says. It is important that you discuss clearly the terms and conditions of your agreement with the buyer in advance.
For instance, many houses these days are on loans and the seller will pay off the bank only once the buyer hands over him the money. Which means the buyer will get all the documents only after that. If all such terms are discussed before hand, chances of last minute confusions are less.
Important Tip: Real estate is a deal which can turn shady with cash element in it. We do not recommend any such things. Also instances have been known where brokers and agents have taken undue advantage of uninformed sellers.
One expert told us: Brokers usually do this by giving you a token money or initial advance and quote you a lower price (uninformed sellers), they ask you to hold the property for 90 days, they look out for buyers by then and quote a substantially high price to the buyer. Hence, it’s best to know the right value of your house before you start the selling process.
Selling a house is not easy. This is just the tip of the ice berg. There is much more, like the documents you need, the kind of contract you need to draft, taxes you need to pay, where to park the sales proceed, capital gain taxes and the like. Do keep tracking this space, for more of the same.