A piece of time-tested advice is ‘selling of property should be the last resort!’ This is due to the fact that the properties are acquired with huge sums of money, facing great difficulties, and sacrificing some of the needs and comforts of the family. And once a property is sold, it may be almost impossible to replace the same.
A large majority of people think that selling a real estate asset is as easy as encashing a Fixed Deposit! After initiating the sale intent, he/she understands how illiquid is the investment, and in the most unorganized and unregulated resale market, he/she is at the mercy of middlemen, many of whom are uneducated, unprofessional, and unethical in their approach. The worst part is few of them are criminal-minded, impersonators, and have links with anti-social elements.
Most of the time, cash is involved in the deal due to the lower guidance value fixed by the Government as compared to the actual market value of the properties. In a large majority of the dealings, the sale is shown on guidance value and the huge difference between actual sale consideration and guidance value is exchanged in cash. It looks like a win: win situation for both buyer and seller, as by opting to show guidance value, on one side, the purchaser saves stamp duty and registration cost (almost 7% on the differential cost) and the seller saves 20% on the Capital Gains Tax (a windfall profit made out of selling the capital asset). But the huge cash comes with a high risk of handling, such as where to keep the cash safely and how to use the same, where to invest, etc., as cash payments are restricted by authorities. The worst part is since the cash involved is not documented, in case of dispute, both seller and buyer will face a lot of hardships.
Hence when it comes to selling a property, it becomes highly critical to avail of professional assistance from qualified Property Advocates, Chartered Engineers, CAs (Chartered Accountants), Mortgage Bankers, and CFPs (Certified Financial Planners).