I welcome you to the blog on What are the Different stages in a Resale Transaction in Real Estate? There are many prospective buyers like you who are not aware of the exact process in a Resale Transaction while buying a home in the secondary market in Mumbai. The reason is home buying is once in a lifetime thing. The second thing is Ready to Move-In homes are a preferred choice for many buyers. It works on the concept of you get what you see? Hence, the assistance of a Real Estate Agent becomes crucial to take you through the various steps in a Resale Transaction seamlessly.
This blog will try to simplify the process involved. You can use this blog as a handy tool for understanding the next stage. Please do keep in mind, the dynamics involved in buying a home/property in the secondary/resale market is different than buying a home/property in under-construction projects from a Developer.
For under-construction projects, you can check most of the project details on the Rera Website of your respective state. For Eg: In the case of buying a home in Maharashtra you can check the MahaRera Website here. Please make a note that in a Resale Transaction the duration to complete the entire transaction varies from a minimum of 10days to 6 weeks depending on the payment schedule.
Stage 1: Finalising a Home in Resale Transaction
I am directly coming to the stage where you have seen a good number of homes in Resale and are on the verge of finalizing one. The home that you have shortlisted is the closest to your current and future requirements. Since this is a Resale/Secondary Market Transaction in Real Estate of a Ready To Move In Home, you are going to negotiate the price and payment schedule with the current owner of the home. Below are the important things to consider:
1. Final Price Agreed between the Buyer and Seller
2. The Payment Schedule
3. Whether there is a bank loan involved or via self-funding (In the case of a Bank Loan, providing a copy of the letter of eligibility from the Housing Finance Company or Bank to the seller ensures a smooth transaction process. Also, the overall transaction will extend by 2-6weeks depending on how fast the Housing Finance Company or Bank disburses the Loan Amount post Registration.)
4. Date of Registration of Agreement for Sale
5. Expected date of receiving the full and final payment from the Buyer
6. Expected date of possession of the Home
7. Lawyer fees to be borne by the Buyer
8. Chartered Accountant fees to be borne by the Buyer for deducting TDS Payment if the value of the Home is above 50lakhs. This is the current government norm and it is subject to change in the future. At this stage, it’s best to decide to whose PAN Card within the seller family will the TDS be credited. Sometimes there are multiple/joint sellers and multiple/joint buyers. Hence determining it initially is recommended.
9. If a Real Estate Agent is involved, his brokerage fees to be mentioned which will be paid by the Buyer and the Seller.
10. Obtaining NOC from the existing Housing Finance Company or Bank if the seller has taken any loan whose dues are pending.
Once a price is decided between you and the current owner of the home, there comes a time to pay a small amount of advance money to seal the deal. At this stage please get into an MOU i.e. Memorandum of Understanding on a 100/- Rs Stamp Paper outlining the timeline of payments i.e. the payment schedule. This outline will serve as a guideline for making your Agreement for Sale/Sale Deed. The reason for doing a Memorandum of Understanding is to have a document in place for a transaction that has taken place for the home in question.
Also to make things simpler I am enlisting the costs associated with a Resale Transaction for a Buyer below :
1. Final Price Agreed between the Buyer and the Seller
2. Stamp Duty and Registration Charges
3. Lawyer/Stamp Duty Registration Consultant Charges
4. Chartered Accountant Charges for TDS Purpose
5. Society Transfer Charges
6. Brokerage of a Real Estate Agent
7. Home Loan application/processing fees to be paid to the Housing Finance Company/Bank.
Costs associated with a Resale Transaction for Seller:
1. Society Transfer Charges
2. Brokerage of a Real Estate Agent
Stage 2: Introduction in Society of the New Owner in Resale Transaction
Once your Memorandum of Understanding is signed and small advance money is paid, the seller should introduce the buyer to the Co-operative Housing Society Committee. In case if there is a Real Estate Agent involved, the Agent should fix the time and day for the introduction of the buyer in co-ordination with the seller and the Co-operative Housing Society Committee Office.
The reason for introducing the buyer to the Society is to initiate and apply for the No-Objection Certificate (NOC) from the Society. Without having the Society NOC paper, the Agreement for Sale Registration will be difficult. Its a must required document.
Please note that some Societies ask for Transfer Fees at the time of applying for NOC. This stage will vary from Society to Society. Some Societies ask for the Transfer Fees earlier and some ask at a later stage. Generally, in the majority of the cases, the Society Transfer Fees is shared on a 50:50 ratio between the Buyer and Seller. This needs to be decided mutually.
Stage 3: Draft Agreement for Sale in Resale Transaction in Real Estate
Once the process of applying for NOC is done, you will have an idea from the Society on the timeline of receiving the NOC Copy. Based on this timeline, you can initiate the process of preparing the Draft Agreement. The Draft Agreement is prepared by a Lawyer/Stamp Duty and Registration Consultant who will also assist in the payment of Stamp Duty and Registration process. Generally, the Lawyer’s fees are borne by the Buyer.
The lawyer is able to prepare the draft agreement on the basis of the previous agreement for sale copy. The agreement for sale copy has to be handed over to the lawyer to enable him to prepare the Draft Agreement. Make sure that the sharing of the Draft Agreement is done on email ids of both the buyer and the seller. It helps to quickly decide on the Draft Agreement terms if both the buyer and seller revert to the same email by marking a copy to all thus enhancing transparency of terms to be decided and resulting in faster turnaround time.
If a Real Estate Agent is involved, then he has to share the Draft Agreement copy with both the seller and the buyer.
It generally takes 2-3 working days for a lawyer to prepare the Draft Agreement. The Draft Agreement becomes the Final Agreement once all the terms are agreed to in common between the Buyer and the Seller.
I recommend going through the terms and conditions of the Draft Agreement for Sale twice before giving your final nod. It’s absolutely fine to give this process its due time without any hurry.
Stage 4: Stamp Duty and Registration Charges Payment in a Resale Transaction in Real Estate
Once the Draft Agreement is finalized, we proceed to the payment of stamp duty and registration charges. The stamp duty and registration charges vary in different states of India. I am discussing this stage w.r.t Mumbai City in Maharashtra.
You will be given a Stamp Duty and Registration payment account number of a bank with an IFSC code for making the calculated payment by the Lawyer/Real Estate Agent/Stamp Duty Registration Consultant. The amount of Stamp Duty and Registration Charges to be paid will be known to you in advance. It will be communicated via the Lawyer/Stamp Duty Registration Consultant/Real Estate Agent. Once you make the Payment, please share the copy of a successful transaction with the Lawyer/Stamp Duty Registration Consultant/Real Estate Agent. This will enable them to take a confirmation copy from the bank and attach it as a part of your Agreement for Sale papers.
Generally, people are aware of the prevailing Stamp Duty and Registration Charges in their respective localities, and based on the Agreement Value it’s easy to calculate. Agreement Value is the Final Sale Price decided by the Buyer and the Seller.
Going by the current rules, once a building/complex has received an Occupancy Certificate (OC) then GST i.e. Goods and Services Tax is not applicable. The only cost is Stamp Duty and Registration Charges.
Please note you will receive the date and location/address of Registration of Agreement for Sale from the Lawyer/Stamp Duty Registration Consultant/Real Estate Agent once your payment is confirmed which generally takes 1-2days. You can also inform the Lawyer/Stamp Duty Registration Consultant/Real Estate Agent your preferred day to Register the Agreement for Sale in consensus with the availability of the Seller.
Stage 5: Registration of Agreement for Sale in Resale Transaction in Real Estate
You will have to reach the Registration/Sub Registrar Office before/on time on the day to complete the registration process. Please do carry your important documents like Aadhaar Card and Pan Card or other documents like Driving Licence, Valid Passport, Voter ID, and their Photocopy. Also, you will require 2 witnesses to be present with you for the Registration Process along with their address and identity proofs mentioned above both original and photocopy. Depending on the appointments or as we call it the amount of rush at the Sub Registrar Office, it may take a couple of hours or more to get the registration process completed.
Once the registration process is done, it will take 2-3days on average to receive the Hard Copy of the Registered Agreement for Sale. The buyer may also receive a soft copy on his email id of the Registered document provided the buyer’s email id was mentioned in the contact details. Its recommended to make multiple photocopies of the New Registered Agreement for Sale and get it notarized in case the original Registered Agreement for Sale will be given to the Housing Finance Company or Bank for a Home Loan.
In case if you are going for a Home Loan, you will have to submit the Original Registered Agreement for Sale along with all the previous Original Agreement for Sale copies to the Housing Finance Company/Bank to process the loan application. The Housing Finance Company/Bank will ask for NOC in Housing Finance Company/Bank Format from the Society. You will have to diligently follow up with the Society Managing Committee to get the required paperwork done.
The Housing Finance Company/Bank employee/representative will visit the home for inspection before the final disbursal of the Home Loan amount is made to the buyer.
Its always recommended having the Home Loan disbursal amount cheque with you at the time of possession.
Stage 6: Possession of the Home in a Resale Transaction
Coming to the most crucial time that a prospective buyer awaits is the possession or handing over of the keys of the home to the new buyer. There are a few steps remaining before we get the keys :
1. Preparing and Signing the Society Transfer Papers by the Seller and Buyer. Society Transfer Papers are prepared by the Lawyer/Stamp Duty and Registration Consultant.
2. Making sure all the dues are paid to the seller including the full and final payment as per the terms of the Agreement for Sale.
3. Taking note of the Gas Connection Bill, Water Supply Bill, Electricity Bill, Local Cable/DTH Bills if any, Local Newspaper Vendor Bill, pending Society Maintenance Bill or if the seller has paid the Maintenance Bill in advance. These are small things but should be settled with the seller at the time/just before possession of the Home.
4. There will be 3 sets of Society Transfer Papers. Out of 3 sets, 1 set will remain will the seller, 1 with the buyer, and the last 1 will be handed over to the society committee by the Buyer once he moves in along with a copy of the New Registered Agreement for Sale. This will ensure in the forthcoming Society General Meeting, the new home is transferred in your name along with Gas Connection, Electricity Connection, and Water Connection being updated with the name of the new owner. Please note that all the 3 sets will have to be signed by both the buyer and the seller.
5. Please make sure about the set of keys available with the seller i.e. if there are more than 1 set of keys of your home, please ask the seller to hand over all of them to you.
I hope this blog would have given you a brief idea of the Different Stages involved in a Resale Transaction in Real Estate. There are many moving things in a Resale Transaction in Real Estate which requires consistent efforts from the Buyer and the Real Estate Agent. If there is a Real Estate Agent involved, he can take over the majority of the work from the buyer apart from things that require the presence of the Buyer.
If you found this blog of value, please do share it with your friends, family, colleagues, relatives, and on various social media channels.
I have written other blogs whose links I am sharing below :
1. Real Estate Agent: How to Provide Best Services?
2. How to find Project Details on MahaRera Website?
3. Sunteck Signia High – Luxurious Homes for a Quality Life
4. Rustomjee Summit – Your Dream Home in a Thoughtful Way
5. Kalpataru Vienta – Luxury Spaces in the Best Location
6. Savana – Luxury Homes in the Best Locality of Kandivali
7. TW Gardens – Thoughtful Homes in the Heart of Kandivali
8. Chandak Dahisar – Home Spaces Planned in the Best Way
9. Sarova – Enjoy A Life in 55acres in the Heart of Kandivali
10. Oberoi Sky City – Way to Happy Beginnings in a Happy Home
11. Real Estate Broker: How to do Marketing of Properties for Sale?
12. Kalpataru Elegante: What is the project all about in Kandivali?
13. Chandak 34 Park Estate: How good is the Project for Me?
14. Chandak Cornerstone: What is in the Project for Me?
15. Oberoi Maxima: Homes that Care for Your Space from a Brand
16. Oberoi Elysian: A Home that gives you the Comfort to Work or Play
17. Sky City Tower F: Luxury 3BHK Homes in an 25acres Paradise in Borivali
18. Godrej Tranquil: Luxurious 1, 2 & 2.5 BHK Homes in Lokhandwala Township
19. Godrej Nest Kandivali: Best 1, 2 & 3 BHK Apartments in Lokhandwala Township
20. Kolte Patil Vaayu: 1 & 2 BHK in A Secured Complex
21. Kolte Patil Evara: Adorable 1, 2, 2.5 & 3 BHK with City View
22. Kolte Patil Verve: Exclusive 2 & 3 BHK in Goregaon West
23. Dosti Oro 67: Luxury Homes in an Upcoming Locality of Kandivali
24. Mahindra Roots: Luxury 1 & 2BHK in a High Rise in Kandivali East
25. Prasanna Jeevan by Kamla Group: Exclusive 2&3BHK in Borivali West
I started this blog with a Vision to add value in the buying journey of a home buyer. I come with 5+years of experience in Real Estate Sales divided into 2 parts i.e. couple of years of experience in Primary Under Construction Projects of a developer based in Bangalore and 3years as a Real Estate Freelancer in Mumbai. I completed my MBA in Marketing in 2012. Currently, I am based in Mumbai. Hence, most of my articles will cover projects specifically in the areas where I have been functional as a Real Estate Consultant. Going further, I will try to cover as many aspects possible in relation to Real Estate making it simpler for the prospective home buyers to take a decision.