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RIGHT Step by Step Procedure of Resale Deal in RTM Flat

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RIGHT Step by Step Procedure of Resale Deal in RTM Flat

Last updated: June 29 2019
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  • RIGHT Step by Step Procedure of Resale Deal in RTM Flat

    A lot of buyers feeling the Pinch and mishandled by Inexperienced or crook brokers....

    This is the PROPER Way...and even though one may feel free to try to bypass steps...or be over smart ....but in future if he has to resell that property....it will become a bigger problem

    Final All inclusive Sale Price Decided

    Brokers usually charge 1% - Usually Cash - To be Paid Once deal COMPLETE, not a single rupee paid before. He will get all Registry related Documentation done, pay the grease money, advocate, etc

    TDS if property more than 50 Lakhs is 1% and Amount deducted by Buyer from Final payment. TDS Certificate is Given by Buyer to Seller

    Seller has to CLEAR ALL HIS DUES ..which includes Dues from Builder, maintenance agency, RWA, Electricity, Water, Club charges, etc.
    He has to get NOC from All of above and give the Copy to Buyer.
    Original will be submitted in Authority office on day of registry
    NOC from Builder is MUST - Property is leasehold and Builder is lessee and resident is Sub lessee...You CANNOT bypass the Builder.
    Builder usually gives NOC after getting No Dues from His maintenance agency or RWA

    Any Joining charges by RWA, Builder or Maintenance agency for New Owner will be borne by Buyer


    STEP BY STEP

    1. Decision made for Sale Price, Black component, etc.
    Time Window decided, usually between 30-60 days to complete deal

    2. The Seller will "SHOW" All the Originals and provide a "COPY" of ALL Documents related to his property which he has with him. If he lost any document, its his problem to procure it.

    The List usually includes:

    - BBA properly endorsed
    - ALL Receipts properly endorsed
    - Possession Certificate
    - Car Parking
    - Maintenance Agreement
    - Registry and Sub Lease Deed
    - Tri party Agreement (in case land is on loan from Builder side)
    - GPA in case of Power of attorney used for transfer
    - Last Electricity Bill
    - Last Maintenance Bill
    - Last Water Bill
    - ID proof of Seller/s
    - PAN Card of Seller/s
    - Cancelled Cheque from Seller

    3. In return the Buyer will give a Token Money of say a few thousand rupees ONLY (Max.10,000).....NEVER 10% ...and a Time period of 5-7 working days is taken for verification(using the copies provided)

    4. These Copy of property are then submitted in bank (if loan) OR to hired lawyer to check in authority(if no loan), they will take approx 3-5 Working days for Verification and give a Nod to go ahead if all documents found clear. In case any document required ..The Seller has to Furnish it as soon as possible.

    5. The Buyer should now independently approach the builder as well as maintenance agency to ask if ANY DUES on Seller or not. This is done by brokers and can be done in a few hours

    6. The property details are then cross checked in district court to check if any legal case is on it or not (authority will have no details of it). this too is done by broker and takes 1 day

    7. Now the Buyer has made it clear that the property has NO issues:
    - All documents are in order
    - No Legal case in local courts
    - Builder and RWA ready to give NOC (Dues status Known)

    8. Now the TEMPORARY Agreement for sale is done....with buyer and seller...stating the Final amount (Black and White) ...2 Originals...Notarized stamp paper only with 2 witnesses...BOTH OF WHICH WILL BE TORN on the day of registry..

    9. 10% bayana is given by buyer to seller ...ONLY IN WHITE (DD)...NEVER IN BLACK and the time frame for full and final payment decided and clearly stating that its SELLERS Responsibility To furnish the NOC from builder AND Maintenance agency / RWA....in stipulated time. In many cases the Time frame STARTS from the day NOC is furnished by seller

    10. The Seller Would by now procure the NOC from Builder and Maintenance agency
    and Furnish the COPY to Buyer and SHOW the Original.(Original is Submitted on day of registry).

    11. All Documents are now submitted in Bank and Authority , The authority will give a pre approval for transfer And the bank gives the pre approval and now only waiitng for their formalities...

    12. Now with Pre Approvals from Authority and Bank in place (meaning only waiting for the process time of bank and authority) Another 10-20% is given by Buyer to seller..as agreed...all payments in DD only...no cash.

    13. On the day of Registry , the seller will come with ALL HIS ORIGINALS (Incl. NOC) And COMPLETE SET OF KEYS......Buyer and Seller sit in the lawyer office with the bank personal

    The Black component is given by buyer to seller in cash...and balance DD given and in return ALL DOCUMENTS by seller are handed over.

    The Old Temporary agreement is Torn (mentioning black and white).....All transfer documents signed......and then wait for turn to be called by registry office

    14. Once all done......Hand over keys to buyer and Pay the broker his 1%

    REMEMBER -

    1. All White component is taken in DD , and Not Cheque

    2. Always keep Approx.10 Latest Photographs Ready at all times

    3. For A Higher Cash Component or regular deals keep a portable money counting machine, costs a few thousand only and does the job well and safely.

    4. Registry process can take 2 hrs or even whole day, depends on No. of files on that day, or availability of staff. Be prepared

    5. Its Prudent to have someone around without informing brokers, etc close by, Message him to come and handover cash to him and he can leave before registry happens. Usually the Snatchers have inside info about seller and can identify him and wait for him to leave premises to follow, etc.

    Its also a good idea if u decide to carry High amounts of cash yourself, to have someone follow you, to check that no one is following you

    6. When Having Cash , Don't accept any drinks, food from Anyone. Politely decline

    7. Use Your Pen for signing any documents and take your time to check properly

    8. Keep a Hand Sanitizer on the day of registry to remove the Ink after Thumb impression

    9. Keep all cheques in Waterproof Bags Only and submit in bank immediately after leaving registry office

    10. The Broker / Buyer should Give you a copy of the Transfer papers once he gets from authority (takes usually 5-10 days)

    11. Never give Color scans / Copies to anyone, Give B&W scans/copies Only
    Mark the Copies as "Copy" Clearly
    Copies of Registry Documents Are usually submitted Notarized, others are self attested

    12. Its a good practice that once you have sold your flat, inform the RWA, maintenance agency even by an email that you are No longer the owner and the new owner is XYZ who will get in touch with them as per his convenience and from now on, you donot want any communication regd. Bills, etc for the property


    Its simple and straightforward

    and this process IS CLEARLY DISCUSSED AND DECIDED Before A single rupee is given


    In Case of Loan....usually 30 days everything is complete

    In Case of No Loan..Usually 10 days everything is complete


    The Buyer, Seller or broker can NOT pressurize you for doing anything Improper

    Thats ONLY acceptable in case you are willing to take risks in a DISTRESS Sale where HUGE Discounts are offered, and of course you will be liable for any future issues

    If for ANY REASON you withdraw from the deal, its your choice and doesn't need any Major explanation also and MOST CERTAINLY you will NOT be blacklisted from any "broker List" as there is None !!!!!

    People who walk OUT of a deal do before Step 8 as stated above and dont stand much to lose, If they walk out of a Proper deal then Huge costs are incurred and a broker wouldn't have an issue with it as its normal for brokers to mention 2-5% fees instead of 1% for a Deal which is Broken after agreement is signed


    Enjoy
    Last edited November 8 2016, 01:12 PM.
  • #2

    #2

    Re : RIGHT Step by Step Procedure of Resale Deal in RTM Flat

    Good post sir.

    Some questions.

    Suppose i am disposing a property (say in Gurgaon) to buy a property in Noida. What is the best way? First sell property in Gurgaon and then initiate the process of buying in Noida. Or should both selling and buying be done simultaneously? Taking money from party whom i am selling in Gurgaon and giving that money to seller of property i am buying in Noida.

    How to strike suitable Black-white ratio in deal when i am disposing a property to buy a new property to minimize/nullify stamp duty?

    How to negotiate with Party about Black white ratio? I mean, what to do if seller demands big component in Black? Or buyer offers to give big component in black? Isn't that risky?

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    • #3

      #3

      Re : RIGHT Step by Step Procedure of Resale Deal in RTM Flat

      Great post - two points / observations:

      1. How to really deal with backout / delay cases (loan not come thru or property not sold) - polite reminder / stern reminder and then what. I know there are delay / forfeiture clauses but when and how do you really start to implement them or you really don't. Is it then good practice to not touch the money till transaction is closed. What if you get a really dirty party with bad intentions you couldn't scrutinize or judge

      2. How much stress / time should one give on reading or amending the lease / conveyance / sale deed. I have had some really ridiculous and one sided clauses taken out. One recent clause went - the seller takes responsibility of peaceful and vacant possession of the apartment by the buyer NOW AND IN THE FUTURE UNDER ANY AND ALL CIRCUMSTANCE ELSE IS LIABLE TO PAY THE BUYER MONEY BACK WITH INTEREST.

      Arre buyer fails to pay property tax or there is an 'act of god' to seller kya Kare. So had this amended

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      • #4

        #4

        Re : RIGHT Step by Step Procedure of Resale Deal in RTM Flat

        Another small suggestion is that one should pay the dealer 70-80% on the registry date after all cash / drafts are in hand. But keep 20% money till your copy of the registry is not in your hands.

        The day of registry 2-3 days before only you should start telling him to prepare properly and you want no surprises on that day - he should arrange witnesses or tell you well in advance. Carry all docs in a plastic envelope and kept in a briefcase etc. And always keep track of originals as they are passed on.

        Finally never indulge in any bartering or options etc that you didn't decide originally. Some options I have been given:

        1. I am 70 lacs short - I will exchange my flat (which he is unable to sell) in your name - NO
        2. My cash is not coming thru but loan is approved - you please take the cheque amount but cash we will do later (you keep the documents and don't give the keys) - ABSOLUTELY NOT

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        • #5

          #5

          Re : RIGHT Step by Step Procedure of Resale Deal in RTM Flat

          Originally posted by Bharatiya View Post
          Good post sir.

          Some questions.

          Suppose i am disposing a property (say in Gurgaon) to buy a property in Noida. What is the best way? First sell property in Gurgaon and then initiate the process of buying in Noida. Or should both selling and buying be done simultaneously? Taking money from party whom i am selling in Gurgaon and giving that money to seller of property i am buying in Noida.

          How to strike suitable Black-white ratio in deal when i am disposing a property to buy a new property to minimize/nullify stamp duty?

          How to negotiate with Party about Black white ratio? I mean, what to do if seller demands big component in Black? Or buyer offers to give big component in black? Isn't that risky?
          This is my opinion - Zohaib should give a better answer.

          First basic point is cheque amount should be more than circle rate.

          As a seller your funda should be to get as much white as possible (insist on it without breaking a good deal)

          - easy to handle
          - stamp duty is not your purview
          - if you plan well you can almost save a 100% of capital gain

          You can tell the buyer you intend to use the proceeds to buying a flat and builder only takes white (which may be the case)

          As a buyer now - you should pay as much cash as you CAN:
          - stamp duty is your purview
          - cash (if left) is quite unwieldy and we are slowly moving towards a governance model where having large piles of unaccounted cash will be counter productive.
          - cash (unless you are self montored tends to be expended faster on things you don't need)

          You should balance this with how much capital gains you planned to save - spending more white leads to more saving of capital gains but also more expense on stamp duty. So it is critical to balance the two.

          Just my thoughts on this.

          Comment

          • #6

            #6

            Re : RIGHT Step by Step Procedure of Resale Deal in RTM Flat

            Nice posts by veterans.

            Due deligence of buyer / seller is must. This can be done by knowing his work place, company, visiting card with official mail id, residence address, proof of ID/ address. It is far better and easier to deal with a genuine buyer / seller.

            Similar due deligence for broker also desirable. If you are buyer, broker should be with you atleast till you complete the buying process, take physical possession.
            Last edited May 25 2016, 08:10 AM. Reason: ...

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            • #7

              #7

              Re : RIGHT Step by Step Procedure of Resale Deal in RTM Flat

              Nice post zohaib2012;!!!!

              One addition to the above - NEVER get your property papers LAMINATED. Banks do not accept laminated property papers. Thats one blunder I have seen lot of people make. Lamination makes your file nice and clean.....but legally, thats not acceptable.

              Also, you said cash to be paid on the day of the registry only. In-case of no loan situation, this holds good, but when a person is taking a loan and has to have an agreement copy submitted to the bank for its approval, nobody will have a cash component mentioned in that agreement copy which is for banks purpose. Example - Sale at Rs.100/- with Rs.80/- white and Rs.20/- cash. After 10% white bayana and an agreement required for bank loan, would that be for Rs.80/- (total white component) or Rs.100/- (white + cash). In my opinion, along with 10% white bayana, also comes the cash component so that an agreement for banks purpose could be formulated stating only the white amount. Correct me if I am wrong.
              Last edited May 25 2016, 09:50 AM. Reason: User tagging.

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              • #8

                #8

                Re : RIGHT Step by Step Procedure of Resale Deal in RTM Flat

                I wish this thread was started a month ago and i had read it...

                Anyhow, besides what is already given, I have a few basic queries:

                1. Why will seller agree to take the cash component on the day of the registry? He may feel that after he signs on the agreement with lesser amount (only white component) and it is submitted in the bank - buyer may force him to sell his property at the white rate only.

                2. Although everything is written and discussed - but what is seller starts pressurizing the buyer to give cash before the registry - even though it was discussed verbally and noted in agreement. Afterall, no one could go with black component agreement to court and by then your 10% is already with seller. Or goes back on anything else which is agreed - for example - full payment made by RTGS a day before registry - rather than DD - arguing that DD can be stopped too!

                3. The sale agreement that brokers have (or mine had) is usually a small 5-7 point thing which does not clearly spell out anything. What if the seller wants to hire a lawyer and get a stronger sale agreement made?

                4. Lastly, if something goes wrong - how should the seller/buyer proceed with the cancellation of the deal. Knowing this process of how to get out is also very important.

                Comment

                • #9

                  #9

                  Re : RIGHT Step by Step Procedure of Resale Deal in RTM Flat

                  I don't think buyer will provide papers for 10K, I was scared when asked and have refused it....have your all experts in token amount meeting and do all verification .... Just my POV as seller

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                  • #10

                    #10

                    Re : RIGHT Step by Step Procedure of Resale Deal in RTM Flat

                    MANOJa; Modz, if possible, please make this as sticky

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