Things to do when your home is not selling

Things to do when your home is not selling

A house is essential for a decent living. It is a part of “right to life”, a fundamental right. Investment in a house is made to create a permanent asset.

Investment in real estate is also a lucrative business option, more comfortable and predictable as compared to investment in stocks and shares.

House is put on sale for various reasons like:

  • Relocation
  • Speculative purposes
  • Financial necessity/Distress Sale

If the sale of the house is not getting any response, we advise our clients to consider certain factors as mentioned below: 

Pricing: setting the right price   

Setting the right price for home is very important and depends on the market rate. It is necessary to analyse price influencing factors such as the area where the property is situated, demand for the house whether for residential purpose or speculative investment etc. Accordingly, the price can be changed to attract the buyers and should be set to recover a reasonable amount. Reduction in price should be the last resort.

Time of sale:  Postpone the sale

There is a time when selling a house is more advantageous. It is when the demand for home is rising. Rising income, easy credit availability etc. are some factors which influence the demand for house. If the house is not selling, wait and watch the market movement. If the buyer has too many options, better to postpone the sale.

Try other alternatives: Lease or Rent

If the house is not selling, try other alternatives like offering the house on lease or rent. A tenant may be interested, and such a tenant who has a stake in the house will take good care of the property also.

Sometimes the buyers are not interested in immediate purchase as the arrangement of finance might be a problem. An offer of lease attracts such buyers as there is always an option to buy later. 

Advertisement: Best pictures

Ensure that the sale of the house has been properly advertised to reach to the maximum number and photographs of the house show the best features.

Title of the house and updated government records:

Ensure that the house put on sale has manifestly clear title and is free from all encumbrances. This fact should be evident from the Government records which buyers do check before buying a property. The land where the house is located is not disputed.  Take care that in a housing society, the house is freehold and sale is permitted without hassles.

Incentive:

Try offering some incentive e.g. discount if payment made early or payment made in full at once. 

Repairs/ Renovation:

The house on sale must be in order beforehand.  Repairs, where ever required should be attended. If need be, parts of the house can be renovated to enhance the physical as well as the material value of the house.

Real Estate Agent

The real estate agent hired for selling the house needs to be changed. The sale may require new perspective and better professional skills. Real Estate Agent should not have any vested interest in the sale.

Relocation Companies:

In case of relocation for work, employers arrange for buyouts through relocation companies.  It can be of great help.

Legal Advice: It is always better to engage a lawyer for the brokerage contract, title search, knowing the tax implications and preparation of legal documents, in case of property related matters.Selling a home becomes smooth with right advice and strategy.

Why and where to invest in property in India

real estate investment

Real Estate investment has always been a lucrative option. It still attracts a lot of investors for building on wealth as it promises good returns. Real Estate covers:

  • Housing sector
  • Retail
  • Hospitality
  • Commercial

Indian Real Estate sector is also a good option for NRI investors as there is a lot of scope and potential for growth in a large number of Indian Cities.


Read: Increasing Benefits of Property Investment in India


There are many factors which influence Real Estate Investment Decisions:

  • Political Stability
  • Infrastructural growth
  • Connectivity of a place to airports and other major cities
  • Government Policies in General and Particular for the area – ease of business, transparency, speedy disposals of proposals etc.
  • Tax benefits
  • Quality of Life – Basic Amenities, Education and health facilities
  • High paying jobs – more beneficial for investment in the housing sector
  • Migration – Inflow of people
  • Prospects for future development
  • Emotional bonding with hometown – the special reason for many NRIs as they want to create an asset in their hometown to settle down after they come back to native place
  • Affordability

When it comes to choosing cities for Indian Real Estate Investment, Delhi, Mumbai, Chennai and Kolkata has always been a favourite. They have had their share of growth and development. There is saturation in the property market. The possibility of future growth is limited.  Now their periphery area is attracting investors, eg. Navi Mumbai.


Read: Investment Options for NRIs


Recently, the Tier II Indian cities are attracting real estate investment, as:

  • Government’s efforts: Indian Government’s Smart City projects under which they aim to develop Tier II cities by providing core infrastructural facilities, a decent quality of life and clean environment besides smart solutions. Economic decisions like GST and regulatory authority like RERA which has brought transparency and accountability are also boosting investment.
  • Property is available at affordable price and high Rental Income
  • Improving Infrastructure, health facilities and educational institutions
  • Migration

List of top most Indian Cities for Real Estate Investment with reasons:

  1. Bangalore – Infrastructure, Connectivity, IT sector induced demand
  2. Chennai –Rising demand due to fast-growing economy (manufacturing, health, automobile, technology sector), Affordable property rates and good rental rates.
  3. Mumbai – areas like Thane and Navi Mumbai enjoy proximity to Mumbai, Employment Opportunities, and demand for residential accommodations.
  4. Pune- Lot of migrants in the IT sector has drawn steady demand for further investment
  5. Hyderabad – Presence of IT employees raises demand in housing and retail sector, Connectivity to Airport and State Government facilities for investors
  6. Kochi – Government’s initiatives like single window clearance, discounts to NRIs for investing, better infrastructure, educational Institutions drawing migrants, all are leading to property sector growth.
  7. Ahmedabad – Employment Opportunities, Improved Infrastructure, demand for houses, Transparent and easy procedures
  8. Bhiwadi – City is catching up for Investment. Proximity to Gurgaon and International Airport, IT sector presence, Affordable prices, Infrastructure are an advantage.
  9. Thiruvananthapuram – Growing IT sector, City’s tourism potential, Infrastructure, Healthy Lifestyle.
  10. Coimbatore- City is close to many tourist destinations, upcoming infrastructural facilities, growing service sector including IT firms, Flourishing manufacturing and retail industries.

Read: Government Initiatives and NRI Investments in India


In case of NRIs, besides, the monetary reasons, emotional connection with their hometown for settling down in the future is also a major factor which drives their real estate investment decisions.

Indian Real Estate holds a lot of promises for good returns on investment.

Increasing Benefits of Real Estate Investment in India

Real Estate Investment in India

There is truth in the fact that the importance of land has remained same from time immemorial. Brothers fought brothers and kingdoms collapsed in this battle for land, and yet, we forget to learn from history and continue vying for what’s available. The prima facie fact that real estate never loses value or demand, makes it a great investment option, offering better returns than traditional investment ideas. There are a variety of reasons that make real estate investment so advantageous.

  • It provides great returns: Risk is a very important factor when we talk about good returns and that is minimised when real estate is held for a lengthy period of time. However, in other options like the stock market, the risk factor never goes away.
  • Better asset value: With increases and decreases in the market, there can be no value left in other investments, but your real estate investment will always offer tangible asset value. Home owner’s insurance also protects such investment.
  • Tax Benefits: One can get deductions in tax on various things such as mortgage interest, operating expenses and costs, cash flow from other investments and so on. It is always beneficial to contact a firm that deals in real estate to get more information on this, subject to the area where you want to invest. Accounts of rental repairs, utilities, maintenance etc should be maintained to make this job easier.
  • Steady passive income: Other than renting a property, profits can be generated by buying, selling and the ability to build equity on the property. It ensures that you get a passive income on the side, apart from your primary income.
  • It provides a hedge against inflation: With increase in inflation, prices of rent can also be increased with time. However, such a benefit is not necessarily offered with stocks or other investment options.
  • You will be the decision maker: Investing in real estate makes one their own boss and therefore, risk management is easier since the control is in the hand of the investment maker. Other factors will affect and cause changes in your investment, however, since you are the one calling the shots, the risk can be much better calculated.

Other than this, real estate investment in India is a very good early or regular retirement plan. If a person is well researched and knows the basics of how to invest, your property can ensure a steady income all through your years of rest from work. A few things should be kept in mind while doing the same:

  • One should be patient in choosing the property and the agent, to ensure that one doesn’t pay too much for a property and that the returns are as per your expectations and dreams.
  • Only a property with clear titles should be bought, otherwise, it will only lead to a series of court visits thereafter.
  • The price of the property should be checked properly with the local government records. A good real estate firm will easily do this for you.
  • Investment in real estate is never risk-free. However, it is a calculated risk that will offer great returns to you, unlike other investment options.
  • Negotiate your way through the process, for it will save you a lot of additional money and expenses.

Issues with Property Developers

ISSUES WITH PROPERTY DEVELOPERS

A promising development of any country depends on its citizens and authorities that run its government. Since the past few years, the Indian government has been taking substantial steps to get rid of the parasites such as corruption, which were slowly destroying the country’s base and face. One of the major issues that the government is currently focusing on is corruption in Real Estate.

The most prevalent problems in real estate that the people face are illegal possession, fake deals, delayed transfer of assets and funds. These are even more prevalent among NRIs.

The NRIs face such issues when they either invest in real estate in India or when they sell their property in India.

When investing in Property in India

The primary objective of NRIs for investing in real estate in India is to earn maximum returns or security. Unfortunately, this goes down-hill when they have to face challenges such as delayed or non-delivery of property, fake deals or fraudulent builders; incurring massive financial losses.

Some of the issues that investors face are:

  • Issues in the transfer of title of the property
  • Poor quality of the delivered projects
  • Treachery by the seller regarding – showing and selling different properties or not handing over the property at all or submitting fake documents.
  • Purchased land falling under village survey or city survey.

If the area falls under village part and is an agricultural land, it is a huge problem for the NRI because as per the rules of the Indian government, NRIs cannot invest in Farmhouses, Agricultural Land, and Plantation Property.

  • If the area comes under city part, the NRIs are allowed to invest in residential or commercial property.
  • It may happen that at the time of investment the builder does not ask for the stamp duty and registration but later on the NRI may face problems because of the absence of such relevant documents regarding these.
  • Issues due to the lack of all or some of the following terms in the property agreement:
    • date of delivery
    • date of possession
    • the contract amounts
    • regular maintenance fees
  • Purchased building non-compliant with the state laws and bye-laws.
  • Lack of detailed drawings of structural details, electrical fittings, plumbing, drainage and water supply can lead to several problems in the future.
  • Improper or insufficient or forged signature on the agreement.

Even a small negligence can lead to a lot many troublesome circumstances. Though it is challenging to take care of every little nuance, it is crucial to do so, and one should not hesitate from taking adequate help whenever needed.

When Realty Transparency became a Reality

RERA Act

The RERA Act short for Real Estate (Regulation and Development) Act, 2016 is one of the biggest improvisation in the sector of real estate. Real Estate Regulatory Authority (RERA) Bill was introduced by the Indian National Congress government in 2013 and after 6 years of debating, it was brought into effect on 1st May 2016. The rules under the act were to be formulated by the Central and State government within 6 months of the notification coming out, and each state had its own regulator along with a set of rules for the functioning of the regulator. RERA seeks to promote the interests of the consumers as well as builders and boost investments into real estate in an environment of trust and confidence. The transparency of the act ensures a steep drop in illicit activities and customer harassment, and an inclusion of agents in the provision now makes them accountable for their actions.

Making it mandatory for all commercial and residential real estate projects to register with the Real Estate Regulatory Authority India, now disclosure of names of promoters, project layout, the status of statutory approvals, the draft of builder-buyer agreements, land status, names and addresses of real estate agents etc is obligatory. This information has to be regularly updated on the website of the regulator as well. Non-registration of any real estate project can also lead to punishment upto 3 years or a fine upto 10% of the cost of the project. Various provisions of the act help in protecting the uninformed customers, such as:

  • The registration of the regulator can be revoked in case of any misleading or false representation, advertisements etc from his side.
  • Non delivery as per the terms of the contract would lead to a complete refund of the cost borne by the customer along with the pre decided interest rate or pay monthly interest on each delay month to the buyer, if they refuse to take the sum altogether.
  • The prescribed regulator will now have to give security as to quality of construction and provision of services to the customer for 5 years from the date of possession and upon any such reporting of error, the developer will have to rectify it within 30 days of complaint.
  • Before actually getting a registered sale agreement signed, the buyer cannot ask for more than 10% of the property’s cost as advanced payment.

All of these mandates increase the productivity and value of the real estate industry, and set a benchmark for growth and development. The act lays down that each state establish its own Appellate Tribunal that liberates the honest man and disciplines the swindlers.

However, the fly in the ointment is that project delays due to delays in obtaining completion certificates/essential connections from government agencies such as sanctioning authorities are uncatered for in the act.

Nonetheless, the act definitely makes this sector seem more organised and hopeful of immense prosperity and pellucidity.