By Dr Sanjay Murari Chaturvedi
Selling your plot and not getting desired instant results? read this.
You want to sell your small plot in residential or outskirt of a city and want to sell it instantly. Your broker / agent is not giving you good result as you do not get what you want, consider these factors.
What you are selling?
You are selling plot / FSI and not the constructed ready to move property so stop comparing / expecting price of a ready to move property near by. Old structures / plot / FSI do not fetch highest price for a ready property in your vicinity. Under stand this that one who is purchasing, is for business and would like to earn something. If you do not give him margin, he will not buy. So you are selling plot / potential FSI and not the ready real estate hence do not expect price of highest real estate in your vicinity. Agents / mediators wants you to sell through them only hence they will give you false price so that you don’t sell for less.
Cost of Acquisition and premiums:
The raw land / plot / FSI doesn’t come free. One who wants to develop it needs to pay for TDR, Premiums to the Municipality for permissions. This cost is in addition to the cost of plot a builder want to pay you. Hence the plot you are selling is premature and needs other cost before it starts to be developed.
Cost of Funds:
Whether it is own fund or borrowed funds, a builder bring in funds to develop where cost of construction, TDR, Premiums, professional fee to Lawyers and Architects etc is involved before he starts construction. A ready to move construction requires at least three to four years where such funds cost a huge cost to builder. If builder pay you market value of ready to move in, he will not be interested. Hence to sell the plot, be realistic and see a builder not only pay for cost of plot but also invest premiums, TDR, fees, and construction cost besides his own profit. If he is not getting this, he will not be interested. For quick sale, you must discount these and just see your ready recknor/ Jantri / circle rates for plot and land and not ready to move real estate.
For quick sale where your plot is under litigations, family partition, encroachments and any other encumbrances, you must discount and sell it because opportunity loss is mounting on you as you don’t sell today, it will be opportunity cost. Be realistic and do valuation as per income tax / stamp duty value and discount further for quick sale.