Many lenders have recently lowered interest rates on home loans, and it is expected that this will convince fence-sitters to finally take the decision to buy. So, if you plan to sell a house, this could be a good time as there will be buyers available.
However, if you plan to be a do-it-yourself seller—i.e., selling without taking the services of a real estate broker—there are a few things that you need to know and steps to take to ensure that the process of selling a house is smooth. Selling on your own will help you save on the broker cost, which can be around 2% of the property’s price. A broker charges a fee but takes the entire responsibility of selling the house, starting from showing the house to prospective buyers to getting all paperwork done. But do remember that there is an inventory overhang in the real estate residential market and projects are being launched at slightly reduced prices. In such a scenario, it is important that the house you want to sell is differentiated. So, here are five things to keep in mind while selling a house on your own.
Every property is unique in terms of location, accessibility and amenities. Though there are circle rates for every area set by state governments, it is difficult to ascertain the exact price of a particular property. “One needs to set the price competitively, keeping in mind the prevailing market rates in the locality, and also the prices that other sellers have set for their properties,” said Anuj Puri, chairman and country head, JLL India.
To do this, enquire about the prices of similar properties in the locality. Local brokers may come in handy here as they deal with many properties in the localities that they operate in. Online housing portals are another source. “Before deciding the accurate value of the property, sellers should look at price trends offered by online aggregators to get an idea of the prevailing market prices in their area,” said Aditya Verma, chief executive officer, Makaan.com, an online property aggregator.
It’s important to quote a competitive price because overpricing will result in no buyer coming forth, and underpricing will lead to a loss for the seller.
If the house is not drawing enough interested parties even though it is priced suitably, don’t be hasty and reduce the asking price; but be ready to do so if needed. One can consult a local real estate agent about how long homes are staying in the market in the neighbourhood. Once that mark is breached, only then is it time to think about reducing the price of your house
Keep emotions in check
Usually, buying or selling a house is an emotional affair for most of us. But it’s best to keep your emotions aside and treat the property on sale as an asset purchased to gain financial returns. “If you get too emotional about the expected price for the property, although it has delivered the expected returns, you may end up being unrealistic about the price,” said Sanjay Dutt, executive managing director-South Asia, Cushman & Wakefield India Pvt. Ltd.
Also, look at the house from the view of a buyer and prepare it accordingly. “Making the house visually appealing, say, by doing up the bathrooms (changing the floor or wall tiles), painting the house can attract buyers,” added Verma.
Even a reasonably priced and attractive house won’t sell if buyers are not aware of it. More the number of potential buyers come to know about the property, more are the chances of you getting better offers.
A builder has the resources to advertise properties in various media, but an individual seller does not. “Since it is not your forte, or business, to sell properties, your span may be restricted to your social network or walk-in buyers. But you can also advertise in newspapers or property portals,” said Dutt. Don’t be in a hurry to sell the property to, say, one of the walk-in buyers. Increase your reach to a wider network to get suitable bids for your property. This is where online aggregator websites are helpful. “Sellers can upload pictures of the property so that buyers get an idea of the house. Most websites allow sellers to give a detailed description of the property,” said Verma.
Only a few among us would have the luxury of devoting whole days to selling a property and responding to each and every buyer who shows interest. Buyers may contact during weekdays or when you are travelling. It may not be feasible for you to attend to every buyer and show the property on sale. As a result, opportunities may be missed. Apart from this, if the property is located at some distance from your current residence or workplace, being present at the site for every prospective buyer is difficult.
Also, many buyers evaluate several properties simultaneously and are in no rush to conclude a transaction. Therefore, it is crucial to judge the buyer’s level of interest, and accordingly make an offer for sale.
Another important aspect is flexibility in when the handover should take place. “When a suitable offer materializes and the buyer wants to move in sooner than you had planned, it is prudent to go with the flow and sell the property rather than hold out for more time, which may make the buyer back out,” said Puri.
Get paperwork done
This is the final step, and if not done properly, may inconvenience not only you but also the buyer. After identifying a buyer and entering into a verbal agreement to sell, it is important to document evidence of all transactions—date and quantum of token amount paid by the buyer, payment schedule for the remaining consideration, the onus is on the buyer to pay stamp duty, treatment of society transfer charges, and more. Decide along with the buyer which charges are to be borne jointly and solely, and document the respective decisions.
Confirmation from the society’s office that no dues are pending from the seller, its approval to sell the property (no-objection certificate), and seller’s disclosure of any fact that may materially affect the value or desirability of the property, are some other papers that are critical for the sale to materialize properly. After documenting the above aspects, get an agreement drafted from an experienced lawyer or any other responsible authority to avoid problems later. After the buyer vets the agreement and makes payment(s) as per the schedule, you should immediately register the property to make the transaction legally binding on both parties.
“Completing required documentation and seeking expert advice wherever needed will ensure that the transaction is concluded without any financial and legal pitfalls,” said Dutt.
Not only is a property sale a big-ticket transaction that do-it-yourself sellers will undertake rarely, it also requires a lot of due diligence and research. So, take the services of experts, for example, ask a lawyer to draft the final agreement. Get as much online help as possible, and consult someone who has done it before.