Considerations to make before selling an under-construction home!

Purchasing a property during the project’s debut in order to benefit afterwards by selling the unit has become an appealing concept for many real estate investors. However, due to the participation of several parties, transferring or selling an under-construction property might be difficult. According to insider accounts, there are certain helpful techniques to make this selling a smooth process.

The transfer of an under-construction property is contingent on a number of circumstances, including the project’s building state, the buyer’s home loan profile, the builder’s reputation, payment options, and transfer charges. The complexities of selling an under-construction home, on the other hand, are largely undefined to the seller. When the occupancy certificate is given but the property is not yet registered, the situation gets even more perplexing. Thus, provides a complete guide to help you sell an under-construction home.

Under-construction property transfer

A tri-party transfer document is typically used to convey an under-construction property. The seller and buyer sign the deed in this case, while the builder acts as the confirming party.

Meanwhile, according to Gautam Adhikari, Property Consultant, Adhikari Estate, a new kind of ownership transfer, namely bi-party transfer of under-construction homes, is gaining popularity in Delhi, Maharashtra, Uttar Pradesh, and Haryana. The bi-party transfer procedure is as follows:

• The seller identifies a buyer and then contacts the builder.

• The builder gives a No Objection Certificate (NOC), which states that he has no objections to the transfer of ownership to the new buyer.

• Seller and buyer sign a sale agreement or transfer deed based on the issued NOC.

• The seller gives the builder a copy of the selling agreement.

• The builder enters new ownership information into his records

Quick selling tips

• Choose the appropriate time.

If you sell a real estate asset for a profit, you must pay capital gains tax on the profit. Short-term capital gains often generate a larger tax burden under the present administration because they are contributed to the seller’s income, whereas long-term capital gains are taxed at a flat 20% rate. The government, on the other hand, provides some provisions to lower one’s responsibility under the long-term capital gains tax. Consult with your agent to determine the ideal time of year for tax savings or profit-making. If property prices in your area are expected to rise, you should not mind paying the higher tax. However, given the market’s instability, analysts advise against it.

• Set the appropriate price.

It is generally a good idea to verify the property rates of resale homes in the region before advertising the property price. Avoid relying on the builder’s new home price chart. A builder may establish a high unit price in order to portray his endeavour as one with a better yield. To gain a better perspective, try to examine the property from the buyer’s point of view. You may always seek the assistance of an agent to negotiate a price.

• Examine all available options.

Selling an under-construction property should be a well-thought-out and well-informed approach. Determine the fundamentals in order to select a buyer with a strong financial background who will pay the total amount:

• Is the buyer’s money easily available, or will he have to liquidate assets to get it?
• Is the buyer intending on taking out a loan? Is he already in possession of the sanction letter, if so?

You may choose the proper person by comparing possible purchasers on the grounds given above.

• Engage the services of a mortgage advisor.

In the most basic situation, three parties are engaged in the under-construction property transfer procedure. It becomes more complicated when both the buyer and seller want to take out a loan. As a result, the transaction involves five parties: the seller, the buyer, the builder, the seller’s lender, and the buyer’s lender. Because the danger of having two loans on the same house might be complicated, it is best to employ a mortgage expert to guarantee a smooth process.

Earning money via capital appreciation is a strategy that most real estate investors use. Consequently, a thorough grasp of the complicated process is needed to avoid errors in the future.

Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. PropertyPistol does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.