Intending to sell Real Estate?
Basic Checklist when selling completed property without furniture
Locate the property ownership papers –
If inherited land, then khatian/ record of Rights
If purchased property – your purchase deed, Mother deed – the purchase deed of the earlier owner
You may need to make a few copies if the property ownership papers are old and not from the computerised era for in such a case, each propective buyer tends to ask for copies or at least the registry office, sale deed number and date of execution to make their own enquiries
Non-Encumbrance Certificate – the property registrar’s office certifies that the property is not tied up as security for any loan. Generally, the buyer will do it too, but good to have one in hand for preliminary talks. If you had acquired the property against housing loan or had mortgaged it for loan for business, ensure if the loan is repaid, the encumbrance has been duly cancelled.
If there is an existing loan – if you intend to sell and the buyer must clear the future installments then keep a statement of the loan account ready to indicate outstanding. Some buyer’s may baulk at the proposition and others may use the outstanding loan as a handle to drive down sale price payable. Generally the mortgaging bank expects prior consent be obtained before showing property, but its consent will be needed at least at time of registration of sale
Land use Conversion Certificate – This certificate is for permitting use of Agricultural for Non-Agricultural purposes. When purchase is financed by loan, the financing bank may insist on following papers if your deed indicates it is a agricultural land and surrounding shows mixed usage. May not always be critical in other cases, price is impacted to an extent
Update all property tax papers – householder’s tax (paid to municipal authority), land revenue receipts especially when standalone building or an unbuilt land
Disconnect phone lines: If landline connection was there, clear outstanding on landline bills and surrender it
If standalone house –
- Municipal water connection sanction letter (if applicable). Newer flats in multi storied apartment do not always have municipal water connection and may not be needed.
- Locate the electricity related papers – Metre installation permission if intending to transfer it, clear outstanding electricity bills. A good lawyer scrutinising a property for acquisition would generally find this out and inform the buyer.
Mauja (village) map – yes, generally needed even in areas long assimilated into urban areas, and even when a flat is being sold. This helps to ascertain the relative location of the plot number. Any equivalent document issued for urban area from competent authority will also do.
Additional points if property to be sold is a flat in urban area
- Intimation of intent to sell to flat owner's association– Many sale deeds require owner to apply for permission to flat owner’s association indicating intention to sell. The society of flat owner’s may seek to regulate caste and religion of who can buy but this is not a legally supported.
- Ask for sanctioned drawing – If you do not have it already, ask for relevant sheets of the sanctioned drawing – minimum needed is the sheets indicating the layout plan of the building and your floor’s plan. This is critical now for registering property
- Ask for copy of the Completion Certificate – this is a certificate issued by the municipal authority once the builder intimates completion of construction and finishing within the time-period allowed in the sanctioned plan.
- Ask for copy of the Occupancy Certificate – building is inspected and adjudged as habitable by Municipal Authorities. In some states like Bihar and Jharkhand, the builders/developers never applied for the Completion Certificate and Occupancy Certificate earlier. Even Scheduled bank's are habituated to lending for buildings without them in these areas. But better informed buyers may still ask. In other states this is a necessity and non-negotiable.
- Decision of Land Revenue authority (if applicable) – if the land rights were obtained under a legal case and the fact is referred in the sale deed - then a copy of the final judgement/ order. For example if revenue authority sanctioned use of tribal in certain states with special provisions
Remove beforehand what you do not intend to sell with the property – remove it before putting the property for sale. So if you intended to remove the fantastic entrance gate, do it.
Clean up and spruce up - In Real Estate appearance commands price. Before showing around property, you intend to sell, clean it and its immediate surroundings. A basic colour-wash and door paint is also good to paper over damages inflicted by earlier owner. Filthy conditions depress prices offered. If a tap does not work, or the door handle is coming off or the wall has scratches or paint is peeling the prospective buyer may be notching up larger than real costs to do up the place to a liveable condition and may bolt. No an extensive repairing is not called for but a basic look at the property.
Jot down the positive points of the property - What are the positive aspects of the property - whether a private garage or a personal swimming pool or even full length wardrobes inside the house that you intend to leave intact, its common features - senior's only swimming pool or daily needs shops, or location (neighbourhood) like distance from hospital or markets or public transport etc.
Additional points if you do not live where the property to be sold is located or want to delegate tasks
- Locate someone who will hold the keys to the property – it can be a trusted relative/friend/ a fellow flat owner in the same apartment depending on your comfort levels.
- Identify a person to act as your agent and negotiate the cost payable to same or another person to show the property in your absence
- Sale through a Special Power of Attorney is feasible but involves added cost payable to the attorney holder. Power of attorney invites added queries from registration office on necessity of it. Courts are also known to have frowned upon such a practice.
- If you will go to register transfer, map out your windows of time when travelling to registration office for registering sale deed is feasible.
- The buyer generally does the following so you need not exert
- Locates the lawyer/ deed-writer - need to draw up a deed of sale in consultation with a lawyer. The lawyer typically does not draw up the sale deed, and where deed writers are attached to the registry office, you can get draft from them.
- Buyer usually pays the stamp duty
Additional consideration for selling jointly owned Inherited Property
- When the property devolves on the inheritors often emotional attachment is strong (its perhaps the house you grew up in) and no immediate ideas of selling it crop up. It is only later when the property lies unattended while inheritors live elsewhere, there are break-ins or damages finally the decision to sell it is made. By the time, the house may have become weather beaten and damaged. So expenditure on cleaning and sprucing up is needed. A contributory fund may need to be created immediately on inheritance.
- If a property is jointly owned with other family members, it is good to work out each one’s share through a written family partition first. Remember to include details like right of access to common passage/ gate/ staircase etc as the case may be.
- First, offer it for purchase to the joint owners and then to the extended larger family. The family has the right of first refusal for joint inherited property. Retain documentary evidence of having made this offer –
- If sent through email – see if confirmation delivery option is available
- If by Whatsapp – preserve message with blue tick, along with truecaller detail of the identity of the number
- Best, if sent through registered post, the postal receipt and if feasible tracking receipt online
- Reiterate this offer with a time-frame to indicate option exercised
- If any child lived in the house, caring for the elderly parents till the end of their lives, the parents had the option to will a larger share to any of their children/inheritors but if they have not, unfortunately successionary right does not recognise this. Expecting the sibling who continues to live in the property to buy out other co-owners can be tough – when real estate prices are high and often the resident sibling’s revenues are low. A property owner is best advised to plan for such an eventuality during his lifetime to prepare wills and keep in safe custody.
- Even if all agree to sell, it is critical to previously map out likely mutually convenient windows of time when all co-owners can travel to the registration office for registering sale deed is feasible. This information may be helpful in closing the deal.
- If you are the resident relative closest to the area and likely to be doing the necessary spade work for selling the property – showing property, taking calls, locating night watch man – see if you want to request an agreement on the compensation for the cost from all.
- Whatever price is obtained, there is often a sense in co-owners that perhaps the other sibling anchoring the process did not get the best returns for the co-owners.
- Hurrying through to sales is not a good process as time is needed for building market for the property
- Further, a real estate agent can help but is not the solution for disputes on value. An agent is a private entity who is tasked with selling property usually by builders as per a prices ranges set by the builder and developer. Getting a formal valuation report by someone unconnected with the property is a better option. It can be done based on site visit or through scrutiny of documents.