10 things to know before selling your home

Selling a home is a significant decision, and before you even start the process, there are several important factors you should be aware of. Having the right knowledge can make a big difference in ensuring a smooth and successful sale. From understanding the current market conditions to knowing the legal requirements and financial implications, being well-prepared will help you avoid common pitfalls. In this article, we’ll explore some of the key things you must know before you begin the process of selling your home, so you can approach it with confidence and clarity.

 

What should you know before selling your home?

Here is a list of some things you should know before beginning the sale process. 

 

1. Is selling really the right choice for you?

Before putting your home on the market, it’s essential to take a step back and assess whether selling is truly the best decision for your current situation. Homeowners often face this dilemma, especially when weighing financial needs, lifestyle changes and emotional ties to the property. Here’s a breakdown of what you need to consider:

Financial implications

Selling a home isn’t just about cashing in on your property’s current value. There are numerous costs associated with selling, including agent commissions, closing fees and potential capital gains taxes. Will the profit from the sale meet your financial goals? Additionally, you might need to budget for repairs or updates to attract buyers. It’s also worth considering any outstanding mortgage or loans attached to the property.

Alternative options

It’s important to ask yourself whether selling is the only or best option. For instance, renting out the property can provide a steady income stream while allowing you to hold onto the asset. If the real estate market is experiencing a downturn, renting might be more advantageous than selling at a lower price. Additionally, depending on your situation, options like refinancing or a home equity loan might allow you to tap into your property’s value without selling.

Emotional considerations

Selling a home can be emotionally taxing, especially if you have lived there for a long time or have special memories associated with it. Are you prepared to let go of the place you’ve called home? 

Future housing plans

Are you selling because you’re relocating or upgrading to a bigger space? It’s important to have a clear plan in place for your next living arrangement. The real estate market may fluctuate, so if you’re planning to buy a new home after selling, you should consider the potential rise in housing prices in the area you’re moving to. Additionally, renting in the interim or downsizing might be viable options depending on your goals.

 

2. When is the right time to sell?

Choosing the right time to sell your home can significantly impact the price you receive and how quickly your property moves off the market. Timing plays a crucial role in maximising the value of your sale and ensuring a smooth transaction. Below are some key factors to consider when determining the best time to sell your home:

Understanding market cycles

The real estate market goes through cycles of highs and lows, generally known as buyer’s markets and seller’s markets. A seller’s market occurs when demand for homes exceeds supply, driving up prices and giving sellers more leverage. In contrast, a buyer’s market means there are more homes for sale than buyers, which can lead to lower prices and longer selling times. Keeping an eye on local market trends can help you gauge whether it’s the right time to list your home based on current conditions.

Seasonal trends

Timing your sale to align with seasonal changes in the real estate market can have a significant impact. For instance:

• The period from October to January, marked by major festivals like Dussehra, Navaratri, Diwali, and Christmas, is traditionally seen as an auspicious time for making significant investments, including purchasing property. This festive period often sees increased buyer activity, making it one of the most favourable times of the year for property sales.
• Following the festive season, February and March, which mark the end of winter and the start of spring, also witness a rise in property transactions. Buyers may be looking to make investments for tax-saving purposes as the financial year draws to a close on March 31. Additionally, this period coincides with the announcement of employee increments, boosting disposable income and increasing spending power, which can lead to heightened activity in the real estate market.
• In contrast, summer months tend to see a slowdown in the market, partly due to the heat, which discourages site visits and overall buyer activity.
• Similarly, the monsoon season, from July to September, presents challenges such as traffic congestion, waterlogging and power outages, which can deter potential buyers. Sellers may also face issues like leaks and seepages in their properties during this time. Moreover, cultural periods like ‘aadi’ in South India and ‘Shradh’ in other parts of the country are considered inauspicious for making major purchases, further reducing buyer interest during these months.

Economic conditions

Broader economic conditions can have a major influence on the housing market. Factors like inflation, interest rates and employment levels can affect both buyers’ ability to purchase and their willingness to spend. For example, lower interest rates can make borrowing cheaper, encouraging more buyers to enter the market, while higher interest rates can slow down demand. 

Your financial situation

The timing of your home sale may also depend on your personal financial situation. Are you selling to alleviate financial burdens or because you need access to funds for another investment? If you’re financially comfortable, you have more flexibility to wait for optimal market conditions. However, if you need to sell quickly for financial reasons, you may have to be more willing to negotiate on price or deal with a less favourable market.

Life circumstances

Personal life events often dictate the timing of a home sale. Whether you’re relocating for a new job, downsizing after retirement, or selling an inherited property, your unique circumstances will play a significant role in when you need to sell. While market conditions matter, sometimes your personal timeline will dictate when the sale needs to happen.

Property condition

Is your home ready to hit the market, or does it need repairs or upgrades to attract buyers? If your property requires significant work, it may be worth investing the time to make improvements before listing. Homes that are well-maintained and move-in ready tend to sell faster and for higher prices, especially during competitive market periods. However, if you can’t afford to wait, selling as-is might be the better option, especially if the market is currently favourable for sellers.

 

3. How to price your property?

Determining the right price for your home is one of the most crucial decisions you will make during the selling process. Price it too high, and you risk scaring away potential buyers; price it too low, and you might leave money on the table. Getting the price right involves a balance between market conditions, property features and buyer demand. Here’s what you need to know to price your property effectively:

Understanding market value vs emotional value

One of the biggest challenges homeowners face is separating emotional attachment from their home’s market value. While your home may hold sentimental value, buyers are more concerned with comparable sales and market trends. Market value is determined by what buyers are willing to pay for similar homes in your area, so it’s important to base your pricing decision on data rather than emotions.

Comparable sales

To set a competitive price, you need to look at recent sales of homes similar to yours in terms of size, location and condition. These are known as comparable sales. By analysing these trends, you can get a sense of the price range buyers are willing to pay for homes like yours. Keep in mind that the most relevant comparable sales are typically within the last three to six months, as the market can change quickly. 

Current market conditions

The state of the local housing market—whether it’s a buyer’s or seller’s market—plays a major role in pricing. In a seller’s market, where demand exceeds supply, you may be able to price your home more aggressively, knowing that buyers are willing to compete. In a buyer’s market, where there are more homes for sale than buyers, you may need to price more conservatively to attract attention. 

Property features and condition

Unique features, upgrades, and the overall condition of your property also impact its price. Homes with modern kitchens, renovated bathrooms or energy-efficient upgrades typically command higher prices than those in need of repair. Additionally, curb appeal and landscaping can affect how buyers perceive the value of your home. If your property offers amenities that are in demand- such as a large backyard, proximity to schools or scenic views- you may be able to price it higher. On the other hand, if your home requires significant repairs or updates, pricing it slightly lower might help attract buyers.

Online valuation tools

While online property valuation tools can give you a ballpark estimate of your home’s value, they should be used cautiously. These tools typically use automated algorithms that don’t account for nuances like your home’s condition or the quality of nearby amenities. For a more accurate valuation, rely on comparable sales, market conditions and professional assessments.

Appraisal value

Many sellers choose to get a professional appraisal to determine the value of their home before listing it. An appraiser will take into account the home’s size, condition, location and comparable sales to give you an unbiased estimate of its value. It can help set a realistic starting point for pricing your property.

Room for negotiation

When setting a price, it’s important to leave some room for negotiation. Buyers often expect to negotiate, so listing your home at the top end of your target price range allows for some flexibility. However, overpricing with the hope of lowering it later can be risky. Homes that sit on the market for too long can cause buyers to wonder if there’s something wrong with the property.

 

4. How to Identify Genuine Buyers?

When selling your home, finding a genuine buyer is critical to ensure a smooth and successful transaction. While there are many interested parties who might tour your property, not all of them are serious or financially capable of closing the deal. Here’s how to identify genuine buyers and avoid unnecessary delays:

Pre-approval or proof of funds

A genuine buyer will usually be pre-approved for a home loan or have proof of funds ready if they are buying with cash. Pre-approval shows that a lender has verified the buyer’s creditworthiness and financial ability to purchase a home. Without this, you risk dealing with buyers who might back out later due to financial issues.

Clear communication

Serious buyers typically communicate clearly and directly with you or your real estate agent. They’ll ask pertinent questions about the property, the neighbourhood, and pricing, demonstrating a real interest in the purchase. Genuine buyers also respond promptly to calls or messages and follow through with setting up property visits or negotiations.

Defined purchase timeline

Buyers who have a clear timeline for when they want to move and are motivated to meet deadlines are usually serious about buying. For example, someone who has already sold their own home or needs to relocate for work is more likely to move quickly through the purchasing process.

Willingness to negotiate

Genuine buyers are usually willing to negotiate fairly on the price, terms or other aspects of the deal. They will make reasonable offers based on market value and are open to compromising in order to close the transaction. 

Prompt follow-up on offers

When a genuine buyer makes an offer, they follow up promptly and professionally. They are prepared to move forward with the deal and often come to the table with their documents in order. 

Ability to make a down payment

In most cases, a genuine buyer will have sufficient funds available for the required down payment, which shows financial stability and readiness to proceed with the transaction. Be cautious of buyers who hesitate or struggle to provide this upfront payment, as it might indicate that they lack the necessary financial resources.

Ready to sign agreements

When it’s time to finalise the deal, genuine buyers are ready and willing to sign the necessary agreements. They don’t procrastinate or cause delays in closing the deal. If a buyer shows hesitation or tries to delay the process at this stage, it could be a sign that they’re not fully committed to going through with the purchase.

 

5. Is it necessary to hire a real estate agent?

Whether to hire a real estate agent is a crucial decision when selling your home. While some sellers prefer to go through the process on their own, working with a professional can bring numerous advantages, particularly if you’re unfamiliar with the complexities of the real estate market. Here are some important factors to consider when deciding whether hiring a real estate agent is necessary for your sale:

Market knowledge and pricing expertise

Real estate agents bring in-depth knowledge of local market conditions and trends. They can analyse recent sales of similar properties in your area, helping you set a realistic and competitive price for your home to help you avoid common pitfalls, ensuring that your home is priced right to attract serious buyers.

Marketing and exposure

Real estate agents have access to a wide network of potential buyers and can list your property on multiple platforms, including popular real estate websites, social media, and their agency’s network. Agents can also create professional marketing materials like photographs, virtual tours, and brochures, which can enhance your home’s appeal. 

Negotiation skills

Selling a home involves negotiation, and it’s not just about the sale price. There may be discussions about closing costs, repairs, contingencies, or even the timeline for closing the deal. A real estate agent acts as your advocate, using their experience to negotiate favourable terms on your behalf. 

Handling legal and paperwork requirements

Real estate transactions come with a significant amount of paperwork and legal requirements. Missing deadlines or incorrectly filling out forms can delay the sale or lead to legal disputes. From drafting contracts to ensuring compliance with local laws, an agent helps you manage the complex paperwork involved in selling a property. 

Time and stress management

Selling a home can be time-consuming and stressful, especially if you’re balancing it with other responsibilities. Hiring a real estate agent helps alleviate much of the burden. They handle tasks like scheduling showings, screening potential buyers, and responding to inquiries, allowing you to focus on other important matters. 

Dealing with potential pitfalls

There are several potential challenges that can arise during the selling process, such as buyers backing out, failing inspections or financing falling through. An experienced real estate agent can foresee these issues and help you mitigate them before they become significant problems. 

Alternatives to hiring an agent

If you decide not to hire a real estate agent, you can explore other options like selling your home through online platforms or handling a For Sale By Owner (FSBO) process. However, this approach requires a deep understanding of the market, strong negotiation skills, and a willingness to dedicate significant time to the process.

 

6. How to choose the right real estate agent?

Selecting the right real estate agent can significantly impact the success of selling your home. An experienced and reputable agent can help you navigate the complexities of the selling process, maximise your property’s value, and ensure a smooth transaction. Here are key factors to consider when choosing the right real estate agent for selling your house:

Experience and track record

Look for an agent with substantial experience in the real estate market, particularly in selling properties similar to yours. Assess the agent’s history of successful transactions. Ask for data on how many homes they have sold in the past year, the average time on the market, and their list-to-sale price ratio. 

Local market knowledge

Choose an agent who specialises in your local area or neighbourhood. They should have a deep understanding of local market trends, property values, and buyer demographics. An agent with strong local connections and a good reputation within the community can leverage their network to find potential buyers.

Marketing strategy

Inquire about the agent’s marketing strategy for selling your home. The agent should provide a detailed plan on how they intend to market your property to reach the widest audience possible.: Evaluate the agent’s online presence and digital marketing skills. 

Communication and responsiveness

Choose an agent who is responsive and available for communication. The agent should be transparent about their fees, processes, and any potential challenges you might face during the sale. They should also provide honest feedback about your property and market conditions.

Professionalism and compatibility

Assess the agent’s level of professionalism. They should be punctual, organised, and respectful. Choose an agent with whom you feel comfortable working. You’ll be working closely with them throughout the selling process, so it’s important that you feel confident in their abilities and trust their judgement.

Client references and reviews

Request references from past clients to get firsthand feedback about the agent’s performance. Check online reviews and ratings on real estate websites and social media platforms. Reviews can provide additional insights into the agent’s reputation, reliability, and client satisfaction.

Fee structure and commission

Clarify the agent’s fee structure and commission rate upfront. Most real estate agents work on a commission basis, typically a percentage of the final sale price. Ensure you understand how their fees are calculated and if there are any additional costs involved.

Interview multiple agents

Don’t settle for the first agent you meet. Interview multiple agents to compare their qualifications, strategies, and personalities. This will help you make a well-informed decision and choose the agent who best aligns with your needs and goals.

 

7. What are the steps involved in selling?

Selling a home involves several important steps, each crucial to ensuring a successful and smooth transaction. Understanding these steps can help you navigate the selling process more effectively and avoid common pitfalls. Here is a detailed breakdown of the steps involved in selling your home:

Prepare your home for sale

Begin by assessing your home’s condition. Identify any repairs or improvements that could enhance its value and appeal. Thoroughly clean your home and declutter to make it more appealing to buyers. Consider staging your home to highlight its best features and create an inviting atmosphere.

Determine your home’s value

Conduct a comparative market analysis (CMA) to determine the value of your home based on recent sales of similar properties in your area. You may choose to hire a professional appraiser to get an independent valuation of your home. 

Choose a real estate agent

If you’re working with a real estate agent, carefully select one based on their experience, local market knowledge, and marketing strategy. Once you choose an agent, you’ll sign a listing agreement that outlines the terms of the sale, including the commission rate, listing price, and duration of the agreement.

Market your home

Work with your agent to prepare your home’s listing, including professional photography, virtual tours, and compelling descriptions. Your agent will use various marketing channels to promote your property, such as online listings, social media, print advertising, and open houses. 

Show your home

Coordinate with your agent to schedule showings for interested buyers. Your agent may also organise open houses to attract multiple buyers at once. 

Review offers and negotiate

Once you receive offers from buyers, review them carefully. Work with your agent to negotiate terms with potential buyers. This may involve counteroffers, price adjustments, or addressing contingencies. 

Accept an offer and sign agreement

Once you accept an offer, you’ll enter into a contract with the buyer. This agreement outlines the terms of the sale, including the purchase price, contingencies, and closing date. Resolve any contingencies outlined in the contract, such as repair requests or financing conditions. Ensure that all contractual obligations are met before closing. Review and sign closing documents, including the deed transfer and other legal paperwork.

Transfer ownership

Once, the buyer transfers the funds, go to the concerned sub-registrar’s office to get the sale deed registered, making the property transfer legal.

 

8. Costs associated with sale

Selling a home involves various costs that you should be aware of to avoid surprises during the transaction process. Understanding these costs is crucial for financial planning and ensuring a smooth sale.

Brokerage fees

If you choose to work with a real estate agent, you will need to pay a brokerage fee. In India, this is typically around 2-4% of the sale price of the property.

Legal fees

Legal fees for drafting and reviewing sale agreements, title deeds, and other documentation can add up. These fees vary based on the complexity of the transaction and the lawyer’s expertise. It’s advisable to get a quote from your lawyer in advance.

Capital gains tax

Selling a property may have tax implications. If the property has been held for more than two years, it falls under long-term capital gains, which are taxed at 20% with indexation benefits and 12.5% without the indexation benefits. If held for less than two years, it is considered short-term capital gains and taxed according to your income tax slab.

Home loan prepayment charges

If you have an outstanding home loan on the property being sold, check with your lender about prepayment penalties or charges. These charges are usually applicable if you are paying off the loan before its tenure ends.

Repairs and renovations

To make your property more appealing to buyers, you may need to invest in repairs or minor renovations. These costs can vary widely based on the condition of your home and the extent of the work required.

Miscellaneous costs

Other potential costs include charges for obtaining an NOC (No Objection Certificate) from your housing society, costs related to property valuation, and expenses for marketing and listing your property.

 

9. Documents required to sell a house

When selling a house, having the correct paperwork in order is essential for a smooth and legally compliant transaction. Missing or incomplete documents can delay the sale or even lead to legal disputes. Before you list your home, make sure you’ve gathered all the necessary documentation.

Title deed (ownership proof)

The title deed is the most important document as it proves your legal ownership of the property. It must be clear and free of disputes. If the property has changed hands in the past, ensure all previous titles were properly registered.

Sale deed of previous transaction

This is the document through which the property was last transferred to you. It confirms that the title has been legally passed from the previous owner to you.

Encumbrance certificate

This document certifies that the property is free from any legal or financial liabilities such as loans, mortgages or unpaid dues. It is typically issued for a specific period and can be obtained from the local sub-registrar’s office.

Occupancy certificate (OC)

Issued by the local municipal authority, this certifies that the building has been inspected and is fit for occupation. It confirms that the property complies with all construction norms and has been built according to approved plans.

Building plan approvals

You must provide the sanctioned building plan approved by the local municipal body. Any deviations or unauthorised constructions could lead to complications during the sale process.

Property tax receipts

Ensure that all property taxes have been paid up to date. These receipts serve as proof that there are no pending dues and validate your compliance with local tax regulations.

Society documents or NOC

If your property is part of a housing society or gated community, you may need a No Objection Certificate (NOC) from the society’s management. This document confirms that all society dues have been cleared and there are no objections to the sale.

Utility bills

Recent electricity, water, and gas bills help establish the property’s operational status and confirm that there are no outstanding payments.

Possession letter and allotment letter (for builder properties)

If you purchased the property from a builder, these documents show when the property was allotted to you and when possession was granted.

Home loan closure letter (if applicable)

If you had taken a home loan on the property and have repaid it, collect a loan closure letter and a No Dues Certificate from the lender. If the loan is ongoing, the buyer’s bank may help you settle it from the sale proceeds.

10. Legal considerations when selling a home

Selling a house involves several legal aspects that must be properly addressed to avoid disputes or delays. Being aware of these legal considerations will help ensure a smooth and valid property transfer.

Clear property title

Make sure that the title of the property is clear, marketable, and free of encumbrances. A disputed or unclear title can cause delays or make the property unsellable. If you’re unsure, consider consulting a property lawyer to verify your title documents.

Verification of property ownership

The seller must be the legal owner of the property. In case of inherited property or joint ownership, appropriate succession certificates, wills, or consent from co-owners may be required to proceed with the sale.

Execution of sale agreement

A sale agreement should be drafted once the buyer shows serious interest. This agreement outlines the terms and conditions of the sale, including the sale price, payment timeline, possession date, and responsibilities of both parties. It serves as a legal promise before the actual sale deed is executed.

Registration of sale deed

The sale deed is the final legal document that transfers ownership from the seller to the buyer. It must be signed by both parties and registered at the local sub-registrar’s office. The buyer typically pays the stamp duty and registration charges, but the seller must be present (or provide a Power of Attorney).

Power of Attorney (if applicable)

If you’re unable to be physically present to complete the sale, you may authorise someone to act on your behalf using a registered Power of Attorney (PoA). This document must clearly state the powers granted and be legally notarised or registered.

Compliance with RERA (for builder properties)

If you’re selling a property purchased from a builder after 2016, ensure that the builder has registered the project under RERA (Real Estate Regulation and Development Act). Buyers may request this information to verify project legality and delivery records.

Capital gains tax and reporting

You are legally required to report the capital gains earned from the property sale in your income tax return. For long-term capital gains, you can claim exemptions under Section 54 by reinvesting in another residential property. It’s advisable to consult a tax expert to calculate and manage your liabilities.

Legal disclosure of property defects

Legally and ethically, you should disclose any known issues with the property, such as legal disputes, structural defects, or pending litigation. Concealing such information can lead to legal action from the buyer after the sale.

Verification of buyer identity

Ensure the buyer has a valid PAN card and Aadhaar (especially for high-value transactions) and verify their financing arrangements, particularly if they’re availing a home loan.

 

Housing.com POV

Selling a home is a significant undertaking that requires careful consideration and preparation. By understanding the key aspects involved in the process, you can approach the sale with confidence and ensure a smooth transaction. Assessing whether selling is the right choice for you, choosing the optimal time to list your property, and setting a competitive price are crucial steps. Additionally, identifying genuine buyers, deciding whether to hire a real estate agent, and understanding the costs associated with the sale will help you navigate the complexities of the real estate market effectively. With the right knowledge and strategy, you can maximise the value of your property and achieve a successful sale. Whether you decide to work with a real estate professional or manage the sale yourself, being well-informed will empower you to make decisions that align with your financial and personal goals. 

 

FAQs

Can I sell my home if it has an outstanding mortgage?

Yes, you can sell a home with an outstanding mortgage. The sale proceeds are used to pay off the remaining mortgage balance, with any excess amount going to you. Ensure to consult your lender about the process and any prepayment penalties.

What should I do if my home is in poor condition?

If your home is in poor condition, consider making necessary repairs or renovations to enhance its appeal and value. Alternatively, you can price it lower to attract buyers willing to invest in repairs themselves.

How long does it typically take to sell a home?

The time to sell a home varies based on market conditions, location, and property condition. On average, it can take anywhere from a few weeks to several months. Properties in high-demand areas or well-priced homes often sell faster.

What is the difference between a sale agreement and a sale deed?

A sale agreement is a preliminary contract outlining the terms of the sale, while a sale deed is the final legal document transferring ownership of the property from the seller to the buyer upon completion of the sale.

Are there any tax benefits if I reinvest the sale proceeds in another property?

Yes, in India, reinvesting the sale proceeds in another property can offer tax benefits under Section 54 of the Income Tax Act. This provision allows for exemptions on long-term capital gains if the proceeds are used to purchase or construct a new 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