Unfortunately many think, selling a property is anybody’s game, but in reality, the risk and responsibility involved in selling a property is same that of purchasing a property.
It is very critical to take a decision to sell a property, as selling an immovable asset may be easy and to replace the same, it is very difficult. This is due to the fact that property prices increase astronomically over the years, much beyond anybody’s incremental income during the same period. Hence it is advisable to take decision to sell a property, only under dire need and there no other options are available.
Our trained Counselor will weigh all critical factors before suggesting to sell your property and will provide general guidelines on updating of property documents required for sale, the role of broker, doing due diligence on purchaser, seeking professional help in smooth transaction of sale and the post sale compliances.
Once decision is taken to sell a property, the most important thing is to fix a selling price, with room for slight negotiations on price. It is essential to appoint a well versed Valuer (Licensed Chartered Engineer) to fix the market value. The Valuer surveys the locality and neighbourhood, collects required information, measurements, construction details, fixed fittings and furniture, amenities provided, normal wear and tear and apply depreciation values to arrive at saleable value of the property. Without taking advice from Valuer, it is likely that either seller quotes throw-away price and loses huge amounts or by quoting higher price, sale will not happen.
Once decided to sell, the first job is to compile property documents that are necessary for sale, such as ownership documents (sale deed/gift deed etc.), prior title deeds, title verification report and collect latest property tax paid receipt, Khata extract, Khata Certificate and latest Encumbrance Certificate etc. along with loan closure/outstanding details, if loan is availed.
If site is recently purchased from Developer/Owner, bifurcation/change of Khata process needs to be completed to have Khata endorsement, Certificate and the Khata extract.
If a built property is to be sold, copy of the plan approved by BBMP (or competent authority) is also required.
If loan is availed to purchase the property and is still outstanding, seller is required to obtain NOC from the Bank/HFC to sell the property. If an apartment getting sold, referring to bye-laws of apartment owner’s association, the seller may have to obtain permission to sell.
Due Diligences on Purchaser and Broker:
Due to poor image of broker (Real Estate Agent), majority wish to avoid the broker community and directly deal with the purchaser. But most of the time, especially in resale options, the seller is compelled to deal through a broker, under the market practice and hence it becomes necessary to do due diligence on the broker and deal with him only if he is found genuine. And right from the initial discussion on the sale of the property, it is essential to involve the intended purchaser.
Since selling price will run in to lakhs and crores of Rupees, the seller needs to do a lot of home work in thoroughly verifying the genuine intention of buyer. He should check the background of intended purchaser, his standing in the society, his financial status and also the repayment capacity, if the purchaser is planning avail a home loan/commercial to purchase the property.
On assigning the job of carrying due diligence on the broker and the purchaser, we will personally have one to one meeting with both of them and collect required information. We will thoroughly verify the background of the broker and purchaser, role of broker, arrangement of funds to purchase the property and loan eligibility and other related issues. If required, we will arrange the home loan to the purchaser.
Once the seller and buyer agree for the deal, both needs to sit across table and formalize the terms and conditions of sale. It is advisable for both seller’s and buyer’s family members are involved in agreeing the set terms and conditions.
Once deal is finalized, it is necessary to get the sale agreement legally drafted by a well versed Property Advocate. The sale agreement needs to be executed on requisite stamp paper having two witnesses (not Close relative). Execution of sale agreement should be carried out only after considerable portion of sale price is received by the seller. If purchaser has sufficient financial means and not looking for home loan, the sale can be completed by executing the sale deed and registering the same in the Jurisdictional sub-register’s office.
If loan is applied for, the seller should get confirmation of loan sanction and probable date of sale deed registration, before which the balance sale consideration should be received by the seller. Seller should handover the original property documents only after receiving full sale consideration.
Since huge amount of moneys are exchanged for sale/purchaser both seller and purchaser need guidance from Property Advocate, Banker, Engineer and Taxation expert. PropSeva provides services from these entire professionals under one roof at highly affordable costs and hand-hold both the purchaser and the Seller till the service is completed.
Post Sale Formalities:
For the seller it is necessary to collect the certified copy of sale deed of the property sold, in order to keep a copy for his records and also for taxation purposes.
Once the property is sold, there arises capital gains (profit made out of the sale), on which the seller has to either pay capital gains tax to the Income Tax department or can claim exemption from capital gain tax, by investing in one residential house property or approved bonds etc., as per the prevailing tax laws.
While calculating capital gains apart from the indexed value of acquisition cost, the assessee can legitimately claim expenses incurred on improving the asset during the holding period of the asset. As such, a qualified Charted Accountant (CA) in association with a licensed Valuer (Charted Engineer) will provide capital gain calculations and inform the applicable taxes thereon. While filing income tax returns the assessee (seller) has to provide the computation of capital gains and the tax calculated thereon while filing his Income Tax returns.
Under the guidance of leading Charted Accountants and Licensed Valuers (approved by Income Tax department, we offer services of calculating capital gains and computing capital gains tax thereon, help the seller in minimizing the capital gains taxes and or getting exemptions from capital gains tax and ensure proper filing of Income Tax Returns.