1) Find the market value of the house – You have to know the market value of the house to sell it. You cannot set a sale price on the basis of what you bought the house for. The real estate prices change depending on demand and supply, builder reputation, government regulations on property transactions, state of the economy etc. You can find out the value through property dealers, self-assessment, prevailing market rate for similar properties etc. There are professional bodies or real estate consultants also that help you determine the price and assist you in effecting the transaction.
2) Ensure that the house is liveable – No one likes to buy a house that is not clean, not maintained and has a lot of broken things around like leaking faucets or rusted windows. Repair the things that need to be repaired and make sure the house is presentable.
3) Market your house – You have to advertise your house and market it well. You can put advertisements in newspapers. You can upload photos on property websites. You can advertise by word of mouth among your friends, relatives and even in your society. If required, you can engage the services of a professional broker.
4) Dealing with the Buyer – You should ask for an optimum price. You should check the credentials of the buyer in terms of background, financial standing etc. You should not be affected by very high or very low offers but consider each one practically. Check as to how the buyer has arranged for the financing and how you will get your money.
5) Legal Documents and Taxation – Once you have decided to go ahead with the transaction, you have to get the legal documents in order. You have to keep the Sale Contract and past property documents (if you have purchased it from another owner), Encumbrance certificate and loan clearance certificate. Once the buyer is zeroed in, the seller needs to inform the society or the applicable governing body about the sale and buyer details and get a NOC from them for the same. Registration of property has to be done in the buyer's name.
The seller should ensure that he pays the relevant taxes. If he is selling the house within 3 years of purchase of the same, the proceeds of the sale will be calculated as per income tax slabs. If the sale is being done after 3 years of purchase, a long term capital gain tax of 20% is applicable. The seller can get exemption if he uses the sale proceeds to buy another house within 2 years of the sale or build one within 3 years of the sale. He can keep the sales proceeds in a Capital Gain Account Scheme (CGAS) account in a nationalized bank until it is utilised to buy/build a new house. He can also invest up to Rs. 50,00,000 in specific bonds under Section 54 EC and get an exemption.
You need to do your homework, be practical and don't let yourself swayed by emotions to ensure that you get a favourable deal while selling the house. Let us know your experiences while selling a house.
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