Selling real estate always sounds easier than buying. Real estate sellers generally do not have to pay various types of taxes and do not need to visit many clients because interested parties come to them more often. However, this does not mean that the process is simple. It might be more comfortable than buying, but it is not a feat. In this article, we will cover everything there is to know about how to sell property in Pakistan.
PROCEDURE TO TRANSFER OR SELL PROPERTY IN PAKISTAN
The process of selling real estate in Pakistan is somewhat the same in all residential areas, with additional conditions imposed by individual developers. Most people wonder how to transfer property in Pakistan. For projects of registered or private developers, the transfer takes place at their offices.
There are a few things to keep in mind when selling property in Pakistan. These are the following:
- Initial search and finding an agent
- Agent commission
- Money Token
- Initial deposit
- NDC (No Demand Certificate)
- Taxes
- Transfer letter
Let’s look at all of them in more detail.
INITIAL RESEARCH AND FINDING AN AGENT
When deciding to list your home for sale, it is recommended that you do your research on the market value of the property rather than relying on an agent. Knowing the market value of your property will help you determine the right price. This practice is beneficial to both the buyer/seller. When you have decided to put your plots for sale, do counter-checks from other sources to get accurate market prices. This part requires a lot of effort from you, but it pays off in the long run.
Once you fully understand the market value of your property, you need to find an agent. As much as you tend to sell your property without an agent, finding the right dealer is key to a profitable deal. You are also protected from the hassle of going through all the processes alone because the agent you hire can handle the complicated operations on his own. You can ask your friends, family, or acquaintances and of course, you can always check the agents online at Sirmaya.com.
COMMISSION
Agents work on a commission basis, which is usually 1%. Sometimes they are willing to adjust the commission rate according to the closing rate, but this is rare. In any case, you should sit down with an agent and agree in advance on the size of the commission, as well as the timing of its payment.
In general, the commission is paid when full payment is received. Sometimes a mutual decision is made to award the agent a certain percentage of the commission after the buyer has made an initial deposit (BAYANA). Just remember to discuss all of these terms beforehand to avoid complications.
TOKEN MONEY
Selling a house takes place in several stages. Once you find a suitable buyer, they should give you token money. This amount indicates the buyer’s intention to purchase the property. In a sense, it also retains these properties of the motive. After paying for the tokens, you can provide the potential buyer with a copy of the original property documents for verification.
Here’s how it works: If the land falls under the jurisdiction of the Land Administration, you must submit a request to visit to verify these documents for the buyer. In turn, representatives of the Land Office will ask you and the buyer to come on a specific date. On this day, in your presence, the buyer will be shown documents confirming the property.
DEPOSIT
When putting plots for sale in Pakistan, remember that you must make an initial deposit. After checking the documents, the buyer deposits a certain amount of money as an initial deposit, commonly known as ‘bayyana’. The deposit is usually 25% of the sale price of the property. At this stage, a stamp paper is also signed; the conditions are determined by mutual agreement. The stamped paper indicates the time during which the buyer will pay the remaining amount, and will also determine the penalties if he is unable to do so.
If you change your mind about giving up this property after receiving your bayana, you are legally required to double the amount of bayana in the form of a fine.
NO-DEMAND CERTIFICATE
As the payment deadline approaches, you need to apply for an NDC; the title cannot be transferred without this certificate, which is issued by the office of the Special Housing Association or the City Land Development Authority, depending on where your property is located.
This document certifies that you have no debt. It also includes information on taxes applicable to seller/buyer, as well as stamp duty and transfer fee. There are specific fees associated with applying for an NDC that vary from developer to developer. When you receive your NDC, be sure to hand over a copy to the buyer.
TAXES
As a real estate seller, you should know everything about property taxes in Pakistan. Sellers are required to pay Capital Gains Tax, which is 1 percent of the property value for the tax provider and 2 percent for the non-deposit provider. The CGT applies to properties sold within two years from the date of purchase. These tax payments must be filed with the office of the housing association or land administration. On the other hand, the buyer must pay the following fees before transferring the property.
- Transfer fee
- Stamp duty
- CVT
- TMA Tax
TRANSFER LETTER
In Pakistan, property transfer procedures are very crucial, and therefore the presence of both sellers and buyers is critical.
Both parties visit the respective office on a specific day, and the buyer delivers the paid amount in the form of a payment order, after which the employee transfers ownership in his name and issues a letter specifying the details of this transaction.
Both parties then contact the local real estate registrar, where the seller confirms between the witnesses and the buyer that he sold the property on jointly agreed terms. The land development authority is asked to make the necessary changes and then transfer the title to the seller.
At last, the property once belongs to you is no longer yours anymore. Usually, the pay order will arrive in your account within days. Be sure to keep the check with your bank while you wait for payment. Remember, constant vigilance is vital when handling the property. Unfortunately, real estate scams are common, but we can help you with that too.
