Skip to main content

Home Seller Risks and Responsibility

 

Home Seller Risks and responsibility

In a sale process, two primary parties are involved: Seller and Buyer. Both these parties have certain rights and responsibilities in order to complete the transaction successfully. The agreement to sell and sale deed is executed on the doctrine of 'Good Faith'. Let's take a look at the key responsibilities and risks of buyers and sellers:

 

Home Sellers Responsibilities

  • Duty of disclosure: The seller is bound to disclose to the buyer any material defect (in the property or in the seller's title thereto), of which the seller is aware and the buyer is not; and which the buyer could not, with ordinary care, discover. There is no duty to disclose such defects of which buyer has actual or constructive notice, but a mistake with respect to a fact material to the property will make the agreement void. Material defect must be such that if the buyer knew it, his decision to purchase the property would have been fundamentally affected. Such defects may also hamper the enjoyment of the property.
  • Responsibility towards buyer's queries: If the buyer raises reasonable questions with respect to the property with or without inspection of the property documents, the seller is bound to answer the same to the best of his knowledge and belief.
  • Agreement to sell: The seller needs to enter into an 'Agreement to Sell' with the buyer when selling a property. The purpose of the 'Agreement to Sell' is to provide a record of the terms agreed upon by both the contracting parties (buyer and seller) for the sale/purchase of a property and to create the right for the buyer to obtain a sale deed for the property purchased. The 'Agreement to Sell' is NOT a document through which the transfer of the title will be carried out. It is a document that precedes a sale deed and thus, does not require to be registered.
  • Looking after property before conveyance: Even after the 'Agreement to Sell' has been entered into with the buyer, the seller is still responsible to take care of the property and cannot be negligent towards the property until the sale deed is executed.
  • Execution of conveyance / sale deed: The sale deed has to be executed by both the seller and the buyer in the presence of separate witness for both parties. Sale deed of immovable property is required to be registered within the time stipulated under the law in the designated office of the Registrar. The registration of sale deed provides clear right to subsequent sale. Therefore upon receiving the total payment from the buyer, the seller must execute proper conveyance of the property and facilitate registration at the stipulated time and place.
  • Possession of the property: Once the formalities from the side of the buyer are completed, it is the duty of the seller to give the buyer possession of the property, notwithstanding a condition in the sale deed that if no possession is given, the buyer may get it himself. Possession has to be given when the property passes to the buyer, which would generally be at the time of the execution of the sale deed; though it may vary depending on terms of the sale deed.
    Normally it is understood that the seller can retain possession till the buyer pays the money. However it has been held that the transferor is not entitled to retain possession even where the purchase money has not been paid fully. If a seller takes a plea that the remaining money has not been paid, the purchaser must show that he is willing to pay the rest of the consideration. The court can ask for proof of this intention on part of the purchaser. 
    If the property is in the possession of the seller, he should vacate it and hand over the vacant possession to the buyer. If the property is in occupation of any other person, then, as far as possible, the seller must get it vacated and give vacant possession to the buyer - more so in case of agriculture land or even where the land is in occupation of a trespasser, unless the buyer has purchased the property with existing encumbrance.
  • Payment of public charges: The seller is bound to pay all public charges (i.e., financial or other liabilities such as tax liabilities to the statutory authorities, government revenue and municipal taxes) and rent accrued and due in respect of the property up to the date of the sale or up to the date of possession, if the parties so agree. The seller is also under obligation to discharge all existing encumbrances on the property or to pay the interest on all such encumbrances due up to the date o sale, except where the property is sold subject to the encumbrances.
  • Delivery of property free from encumbrances: Conveyance of a clear and a good title and delivery of property free from encumbrances is the duty of the seller.

Besides responsibilities, there are various risks associated with a property deal � both for the buyer and the seller. It is advisable to analyze the risks involved before you buy or sell property.

 

Home Sellers Risks

  • Inappropriate valuation of the property: It is quite possible for the seller to wrongly assess the value of his/her property. This value is mainly arrived at by using various sources such as comments from friends, overall property market trends and information from the marketplace. The seller generally wishes to receive the maximum amount through the sale of his/her property, which could become obstacle in achieving a possible sale. The seller should bear in mind that an average buyer is only interested in paying what he/she considers to be reasonable price. Thus, the seller should demand property price according to the market trends.
  • Selling through too many real estate agents: It is advisable to select few agents as the buyers tend to think negatively about a property that is being handled by multiple agents. The seller should consider the agents based on their specialization and market reputation. Further, notify the same property price to all agents to avoid possible manipulation by prospective buyers.
  • Tough access to property: There is also risk of losing potential buyer due to the difficulties posed in the access to the property. A seller should arrange for access to the property to be made as easy as possible.
  • Dubious buyers: There is risk involved in selling the property to a buyer with dubious credentials. It is, therefore, necessary to verify the background and standing of the buyer before getting into a transaction.
Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds

Top 10 Tax Saving Mutual Funds to invest in India for 2016 or Best 10 ELSS Mutual Funds in india for 2016

1. BNP Paribas Long Term Equity Fund

2. Axis Tax Saver Fund

3. Franklin India TaxShield

4. ICICI Prudential Long Term Equity Fund

5. IDFC Tax Advantage (ELSS) Fund

6. Birla Sun Life Tax Relief 96

7. DSP BlackRock Tax Saver Fund

8. Reliance Tax Saver (ELSS) Fund

9. Religare Tax Plan

10. Birla Sun Life Tax Plan

Invest in Best Performing 2016 Tax Saver Mutual Funds Online

Invest Online

Download Application Forms

For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call

---------------------------------------------

Leave your comment with mail ID and we will answer them

OR

You can write to us at

PrajnaCapital [at] Gmail [dot] Com

OR

Leave a missed Call on 94 8300 8300

Popular posts from this blog

Mutual Fund Review: Taurus Tax Shield

    Taurus Tax Shield has seen a turnaround in performance since 2007, but still remains a volatile offering… The fund has seen a turnaround in its performance since 2007 and has delivered impressively during market rallies since then. The portfolio is also more diversified. It contained its downfall to an average level in 2008 but is still one of the most volatile offerings in this category. Bold investors can look at this fund.   Strategy The fund manager invests across the market capitalisation and sectors. The selection of stocks is made on the basis of long-term business prospects and value creation. Fund Insight Launched in March 1996, the fund was a laggard with just two annual outperformances. Concentrated stock bets and high exposure to mid and small caps led to it being hit harder during market downturns. The number of stocks in the portfolio never exceeded 20 and it was not rare to see the top 5 holdings account for around 60 per cent of the portfolio. After b...

Use Mutual Fund SWPs for getting fixed payments

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India)   Investors time withdrawals optimally to save on tax The systematic withdrawal plan, or SWP, could be called the lesser known cousin of the much talked about and publicised systematic investment plan (SIP). There's yet another cousin — the Systematic Transfer Plan ( STP ). In SIP, you invest a fixed sum of money at regular intervals (monthly/ quarterly) to buy some units of a mutual fund scheme. In SWP, as the name suggests, you do the opposite: You redeem some mutual fund units from your portfolio to get a fixed sum of money at regular intervals (monthly/quarterly/half year/yearly). In SIP, you get a higher numbers of units when the markets are down, and lesser in a buoyant market. In SWP, going by the product logic, you redeem higher number of units when the markets are do...

AXIS Long Term Equity Fund - The Best Tax Saver Fund for 2016

  AXIS Long Term Equity Fund - Invest Online   History:   The open ended mutual fund was launched on December 21 in the year 2009. It is benchmarked against BSE 200 and managed by the fund manager JINESH GOPANI. Initially the scheme was called as Axis tax saver fund but later it was renamed as Axis long term equity fund with effect from September 2, 2011. Nature of investment: As far as asset allocation is concerned, 97.52% of the stocks are equity and 0.02% is debt based. The primary focus of the fund is to invest in diversified equity stocks that have higher growth potential. Total asset size of the fund is in the tune of 4,996 CRORE as of June 30, 2015. Performance: The performance of the fund for one year, 3 years and 5 years are 23.6%, 29.9% and 19.1 respectively which are far greater than 6.4%, 14% and 5.6% benchmark figures. It has also preformed fairly well against SBI magnum Tax Gain (G) and HDFC tax saver (G). The growth comparison is enumerated below;                        ...

Health insurance guide - Part I

Insurance, by definition, is morbid. What if I die suddenly? What if my home caught fire? What if I had to undergo expensive medical treatment? What if something that I thought happened only to others befell me? Insurers, who work with large samples, calculate the probability of such an event and, hence, the possibility of them having to pay out a sum of money to mitigate, to the extent possible, the effects of that disaster. However, the possibility of you undergoing some kind of expensive medical treatment during your lifetime is far more likely than you dying suddenly or your house burning down. Given that costs at private healthcare facilities, where you are most likely to land up, is high, and, doubling every four years 10 months or so, the rest of your money life could easily go out of whack if you had to incur such expenses. Just 12 per cent of India's population is covered with some sort of health insurance. Pared to the bone, for a comparatively small price, health insu...

IDFC Classic Equity Fund

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India)   IDFC Classic Equity Fund IDFC Classic Equity is a large-cap equity fund which currently has assets under management worth Rs. 158.52 crore. It was launched in August 2005. The fund is benchmarked against the BSE-200 Index. Performance YTD 1-Year 3-Year 5-Year Since Inception IDFC Classic Equity 0.93 26.61 6.30 1.01 11.65 BSE 200 1.52 17.31 6.00 1.99 12.98 All figures in % as on January 31, 2013; Returns above one-year in CAGR terms ...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now