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Home » News » Business » Is this a good time to sell your house?

Is this a good time to sell your house?

As property prices surpass 2008 peak levels, realty experts believe that a correction is possible in the next couple of quarters, especially in Mumbai and Delhi. This offers an opportunity to real estate investors to book profits.

Parvinder Singh Sidhu, a Navi Mumbai-based marketing executive, concurs. Five years ago, Sidhu had bought a second home, a 750-sq-ft flat at Belapur in Navi Mumbai for about 13 lakh. Currently , the flat is priced at 35-40 lakh. With the talk of correction in the property market, Sidhu is planning to sell this house now. “If property rates correct in the future, I could buy a similar property at a lower price,” he says.

Yashwant Dalal, president of the Estate Agents Association of India, says, “If you bought a house only as an investment, you should sell it at the earliest and buy later at lower rates,” says Dalal.

Pankaj Kapoor, MD of Liases Foras, a real estate research firm, believes that if the prices fall, it could take two to three years before they return to the current level.
Your decision should depend on various other factors. Here are some that you should consider.

Property market in your locality/city

What is applicable for city limits in Mumbai or Delhi may not be true for the location where you own property. The residential property market is location-specific and the prices will vary for different areas. Markets where houses are largely owned by investors could be more exposed to steep drops than areas occupied by owners, as investors are more likely to sell at the first hint of a market flux.

How soon do you need the money?

Do not sell your property in a hurry if you don’t need the money urgently. Getting the best deal may require patience or even spend some money to add value to your house. You also need to consider the rental return from the property as it will be a source of steady income.

Price it right

The biggest mistake sellers make is in pricing their property too high. The best way to determine the ideal price for your property is to check with brokers in the locality or by listing it on an online property portals such as or

Consider the taxes

How much you actually get after you sell the property will depend on how long you had held the investment. Vikas Aggarwal, a Delhi-based tax consultant, says that if you sell your house within five years of buying it, you will lose all the tax benefits that you had claimed for loan repayments. “You will also have to pay capital gains tax on the profit. One way to avoid this is to use the sale proceeds to buy a house within two years of selling the previous one, or use it to fund a house you bought a year before,” he says. You can also avoid the capital gains tax by investing in specified bnds issues by Nabard, NHAI and REC that are eligible for capital gains tax savings.

Is the property mortgaged?

Selling a house that has an outstanding loan requires a lot of documentation. So try to pay the loan and then sell the house. If you are unable to do so, you will have to sign an agreement of sale with the buyer outlining the terms of payment. The buyer can either pay you upfront and you can use the money to prepay the loan, or you can take a second loan, pay off the first one and then sell the house. The sale proceeds can be used to pay the second loan.

How to sell

Selling property is much more difficult than buying one. Unless you know of people who are willing to give a good price for your house, a property broker may be your best bet. However, do your homework before approaching one and do not be guided simply by what he says. Brokers usually have a wider reach and are more clued in to the local property market than an individual seller. You can also list your property online. Some realty portals allow sellers to list the property for free for some time. Others may levy a fee of 500 for six months. Over the past couple of years, people have also invested in property, where builders have offered to buy it back at the end of a specified period. Even if you have this option, it will be better to check the open market before approaching the developer.

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