Why home owners should avoid distress sales
Sanjay Nayar, a user asks Magicbricks whether it is the right time to sell his property. Over the last two years, he has been waiting for the right buyer who would give him his property’s worth as per market standards. After a prolonged period, he has been approached by someone who is ready to buy but is keen on negotiation. Nayar wonders whether it is the right thing to do. Open House is teeming with such queries. Every seller is wondering whether it would be a good move to sell or wait.
Well, trend watchers have something to tell you. After all, if you have held your property for long, you are keen on good returns too. Selling in a hurry may not serve the purpose. This is what industry insiders’ term as ‘distress sales’. Property market, like politics has always been subject to speculation. Those who have bought constantly wonder about when is the right time to exit the market. Those who haven’t bought are equally anxious speculating price increases over a period of time. While it may be a good time to buy, it is not be time yet for selling unless you are waiting for some quick cash in hand for an urgent need you cannot afford to defer.
“If you are selling today, you have to be open for a bargain. Active buyers always read market trends. They know it may be good to buy when the supply is more than the demand. Consequently, while they do not compromise on their lifestyle choices, sellers or those who have been investors for long may find themselves in crisis,” says Vikram Pandey who deals with properties in the capital city.
Mahesh Mishra, one such seller narrates his experience. “I bought a plot for Rs 8 lakh in Bidarahalli in Bengaluru. Speculators insisted I should dispose this property as soon as possible because of the uncertainty in the market and second, my status as an outsider in Bengaluru.”
“I shouldn’t have given an ear. I sold it for Rs 10 lakh in two years but that is how much I had put in including additional charges. Today Bangalore Development Authority is undertaking developmental work in Bidarahalli and land values have already escalated two-fold. Moreover, ‘outsiders’ are happily settled in the city and making money out of their investment. I could have made a lot of money too,” adds Mishra.
“As a rule of thumb, it is never a good idea to sell anything when the market is bad and showing no signs of recovery. If there is no alternative but to sell despite unfavourable market conditions, it is not enough to simply list the home and wait for an offer,” says Ashwinder Raj Singh, CEO, Residential Services, Jones Lang La Salle.
“When selling a house on a depressed market, it is very important to understand what is happening in the market. It is important to know the true market value of one’s home, which is often very different from what ones hopes or thinks it is. Undervaluing or overpricing your property while trying to sell it on a slow market is a serious mistake,” he further adds.
So when should you sell? Hold on. There is already some momentum visible in the market although at a creeping speed. The next six to eight months may be crucial after which sales may pick up and you could gain! Keep reading market trends specific to your locality. Grab a free copy of PropIndex.
Don’t let desperation overpower you. Property is all about timing!
Source : Times of India / Sneha Sharon is a part of the Magicbricks- Content & Research team and is a market research enthusiast.