Property buying and selling is a competitive activity that is difficult and involves too many attention to details, documentation and regular following up. People mostly opt for a real estate agent so that they get an end to end service- from preparing the flat for sale to identifying interested buyers and sealing the deal. For this, brokers charge a commission that is mostly around 1-2% of the value of the property. However, selling a house without the presence of a middleman is possible.
Karan Khode, an owner of a premium gated community in Pune couldn’t move to his new 2BHK for personal reasons and wanted to sell it because he was in urgent need of finances. After a lot of thought, he set on this journey of selling his property on his own.
Some diligence from the seller’s side while taking up this task will help you finish this up easily while saving substantial money that you would have ended up giving as brokerage. In this guide, we detail you the steps to follow if you decide to take this task in hand.
How to sell the property without a broker?
Set the price
Once you have decided to sell the property, do research on the prevailing market rates of properties in the location. Decide on a property rate that is based on the market conditions and condition of your property.
Prepare your property
First impression is the best impression is something that is not a mere statement but has deeper impact. If you want to sell your property, make it worthy of the market rate you will command. Mend and service whatever is wrong in the house- broken tiles, cracks on the wall, seepage, leaky faucets, broken locks, electrical switches etc. If you are looking at selling a furnished house, do a complete deep cleaning of the house and the furnishings.
Click high-resolutions pics and videos
Once the property is ready, click high-resolution pictures and videos of the property which will be used to promote and advertise it. While shooting the video, it is recommended to it like a home tour where you may start from the entrance of the society to your house and then the interiors. Explain each room in the video and also other interesting things – for example if the apartment is city facing or garden facing and the view that most people look out for from this area etc.
Advertise your property
Once the first two steps are done, advertise your property on different media channels such as your own social media account, your contacts and various groups on whats app. An important medium is the use of online real estate portals like Housing.com where listing a property is very easy and user-friendly. You can also leverage the convenience of going online by checking data such as number of people checking your property etc., giving you leads to many prospective homebuyers.
Screen the buyers
It’s not necessary that every home buyer who approached you is interested in the deal. There may be some who may be interested but may not be able to match upto the price and there may be others who may be plain fraud. Use your judgement to screen buyers. Also, know important information such as their place of work, their ability to take a home loan and service it, how much home loan can they get etc., the guarantors that they present etc.
Meet prospective buyers
Once you are approached by an interested homebuyer, it’s a good idea to meet the buyer at the site. Personally having a look at the property, always adds weight to property purchase. Answer all of the homebuyer’s query with patience. Remember a homebuyer is putting in all their hard earned money.
Negotiate with the homebuyer
No real estate transaction is complete with negotiation. While the homebuyer may tell his budget, negotiate and do not go beyond what is not profitable to you as a property seller. Once, you both reach to a conclusion, take a token money from the buyer so that the deal is sealed from both sides. However, there are risks involved with token money too. What will you do if the home buyer ghosts you after paying the token money? Read this article to find out.
Legal process to follow for transfer of ownership
- Know all the legal aspects of the sale. It’s a good idea to consult a lawyer before proceeding with the deal so that he can guide you on things to anticipate.
- Once the deal is sealed, the next step is transfer of ownership. Firstly, the agreement to sell document is registered which promised transfer of property subject to realisation of the money at which the selling price of the property is fixed at. This has to be signed by the buyer and the seller.
Details in agreement of sale
| Name of buyer
Name of seller Property details Transaction value Breakup of payment Period by which the sale of property must be completed Terms and condition of the sale Responsibilities of buyer Responsibilities of seller |
- Next, the buyer has to work out the dynamics of payment. “When I was selling my property for Rs 1.04 crore, I still had an outstanding loan of Rs 75 lakh that I had taken from a non-banking financial company (NBFC). The buyer sorted his payment method and paid me part and paid the outstanding home loan to the NBFC directly,” said, Anil Kaushik, a property owner who recently sold his 2 BHK without a broker.
- Next, the stamp duty and registration charges have to be paid for the property to legalise transfer of ownership. The sale deed is registered here and the sale deed details configuration, name of new owner, value of property, amenities that it comes with etc. With the sale deed in hand, the buyer gets all ownership rights of the property and the deal is completed.
What are the benefits to sell a property without a broker?
- The property deal will be transparent.
- No commission has to be paid to any broker for selling the property. This is a significant cost of the property that is saved. Also, with no presence of a broker, there won’t be any pressure on the property seller and he can take an informed decision based on the factors that are important to him.
- The seller gets exposure to the real estate market and gains the knowhow of the segment.
What are the impacts of not selling a property without a broker?
- In the absence of a broker, the owner will be responsible for screening buyers, organising site visits etc. for any homebuyer who show interest in the property. However, note that this can be tedious and time taking and not necessarily be successful too. In case the owner decides to sell the property on his own, he has to be mentally prepared of the time he will be required to spend.
- Property selling includes advertising, legal work etc. which if you employ a broker will be done by him.
- Since a broker has knowledge and clients about the existing locations, it is easier for him to close the deal than you.
- A broker owing to his business knowledge has better contacts at the property registration office. Any glitch that comes during the registration will be handled by him smoothly, thanks to the contacts he may have in the SRO. A person who may be doing it on his own for the first time may encounter challenges that he may not be able to resolve immediately resulting in back and forth trips to the sub-registrar office.
What happens if a landlord is unable to sell the property without a broker?
Any landlord has to have patience when selling a property without the broker. However, he cannot wait endlessly for his property to be sold and may need to use the services of a real estate agent when things don’t go as planned. So, what should he do? If a landlord is planning to go with a broker, these are the things to remember.
- The broker you are planning to hire should be RERA registered.
- He should have good knowledge about the market where your property is located and should have an idea about the prevailing market price.
- Check out his past performances on the deals he closed recently.
- Negotiate with him on the brokerage he is demanding and see that its around what the market rate is.
Housing.com POV
Selling a property without a broker is not a difficult process although it may be tedious and time consuming. There are many legal fineprints that are taken into consideration while selling a property which brokers being in the line of work are aware of. However, this is not difficult and can be done by you also provided there is willingness to go that extra mile and do things on your own.
FAQs
What are the problems that one can face if broker is not engaged for selling your property?
Ensure that buyer due diligence is done. Check all documents, buyer background check and ability to pay off the value of the property.
What is the time frame for a property to deal to culminate?
It takes around 3 months from the day of paying the token money to finshing of all formalities such as registration and handing over the sale deed.
Is taking the services of a lawyer recommended?
Yes. The services of a lawyer are recommended especially if the seller is selling the property without a broker.
What is the brokerage that you may not pay if you sell the property without a broker?
Around 1-2 % of the brokerage will be saved if you sell the property without a broker. For instance, if the value of a property is Rs 1 crore, you may have to pay a brokerage of Rs 1 lakh.
Can you sell an under-construction property that may be registered in your name but whose possession you have not got?
Yes, this is allowed. However, check your sale agreement to know if you have any obligations as listed by the developer. Also, know if there are any clauses mentioned that do not allow you to sell the property.
| Got any questions or point of view on our article? We would love to hear from you. Write to our Editor-in-Chief Jhumur Ghosh at jhumur.ghosh1@housing.com |