Complete procedure for sale/Purchase of property in Pakistan

The complete procedure for the sale /Purchase of property in Pakistan 

   

It’s a common phenomenon that selling property is easier than buying property. This is because sellers do not have to pay various taxes to sell the property and do not have to contact many people. After all, the buyers usually come to the property seller themselves.  

There are some stages of selling a property and it is not that difficult.  Let’s take a look at these stages one by one. 

 

1. Early market study 

When you have decided to sell your property, it is wise to first survey the entire market. Get complete information about the market value of your property, what is the market rate of the property, and how, by what means it can be sold at a better rate. 

 

2. Finding an agent 

Contact a good real estate consultant when you know the market value of a property. Often when you do a market study you get the idea that you don’t need an agent and you can sell the property yourself but that is not the case. 

You always need an agent to sell the property. Agents help to solve many difficult issues, like finding potential buyers, Transfer procedures, Tax Calculation, submission overlooking litigation issues, etc. 

 

3. Set the agent’s commission 

Agents work on a commission basis. And the commission is usually 1 to 5 percent. It depends on the property/deal type. You may have to adjust the commission closing time in some other way, but you should sit down with the agent and finalize the commission ratio as well as decide when and how to pay it. 

In most cases, the commission is paid to the agent only when you as a seller receive the full payment. Sometimes it is mutually agreed that once the buyer pays the Advance (Bayana), the agent is paid a certain portion of the commission. Just make sure all of these terms are discussed in advance to avoid complications. 

 

4. Token payment 

Once you find the right buyer, he shall have to pay a token amount. 

This is an amount that shows the buyer’s intention and interest in buying the property. In a way, it also protects the property for the buyer because the seller does not discuss it with anyone else. After paying the token amount, you can give the prospective buyer a photocopy of the original property documents for verification purposes. 

 

5. Document validation 

If the land falls under the jurisdiction of an authority or institution, you will need to submit a request for a visit to the office of that authority with the buyer to verify these documents. 

As a result, Land Authority officials will ask you and the buyer to come to the office on a specific day. The buyer will be shown the records confirming the property in your presence on that day. 

 

6. Initial payment 

Once the documents are verified, the buyer will pay a certain amount as an initial deposit called Bayana. This is usually 10% to 25% of the sale price of the property. At this stage, stamp paper is also signed in which the conditions are fixed by mutual agreement. 

The stamp paper specifies the time in which the buyer will pay the balance and if he has failed to do so will also explain the penalty. If you change your mind about this property after receiving the Bryana, you will be required by law to repay the Beyana as a penalty. 

 

7.No Demand Certificate 

As the payment date approaches, you will need to apply for a No Demand Certificate. It is not possible to transfer property without this certificate, which can be obtained from the office of the private housing society or the city development authority, depending on where your house or land is located. 

This document confirms this. There is no money owed to you. It also includes information on taxes applicable to both buyers and sellers, as well as transfer fees and stamp duties. There is a special charge for applying for NDC which is dissimilar for different developers. Once you receive your NDC, make sure you also give the buyer a copy. 

 

8. Tax payment 

As a property seller, you should know everything about property tax in Pakistan. The seller will have to pay a capital gains tax of 1% of the property value for the tax filer and 2% for the non-filer. CGT applies to properties sold within two years from the date of purchase. 

Before handing over the property, the buyer has to pay a transfer fee, stamp duty, CVT, and TMA tax.  

8. Transfer letter 

Both parties will visit the respective office on a particular day and the buyer will hand over the payment order to the seller. The officer then transfers the property to his name and issues a letter containing the details of the transaction. The registrar then asks the land development authority to make the necessary changes and the title of the property is transferred to the buyer. Pay orders are usually transferred to your account within a day or two and the property is sold. 

 
 

Contributor :- Ghafar Ali Khan, 0332-2185425