Property acquisition is not always an easy process, especially if you are unfamiliar with Pakistan’s real estate market. Everything looks good and attractive when you come to the market with cash in hand. Real estate is one of Pakistan’s largest industries. Real estate investments can be profitable or unprofitable. You can earn a fortune from a good property, while a bad one can stagnate for years, or you may have to pay some loss to get rid of it. This all depends on your homework, future projections, and sometimes external factors like unfavorable decisions by the Government or the Court or delays in mega development projects.
Before investing in real estate, there are many factors that you must take into account. As an investor, you cannot always make good decisions, but you can minimize the risk of loss by doing your proper homework before a final decision. We wrote this article to educate newcomers to Pakistan’s real estate market on the key points to consider before buying a property.
Make sure you know the sponsor:
A sponsor is an actual person or company behind a project. You must be familiar with them. Research the sponsor’s reputation and the project’s status. Research the sponsor. Initially, block him if he has a bad reputation, whitelist if he has a good reputation, put him on your grey list if he is an anonymous sponsor until you go through the rest of your checklist.
Get to know the project:
You should explore the following information from the sponsor once you are familiar with him and know his reputation in the market:
- A society’s total land area
- LOP according to the relevant development authority
- NOC issued by the relevant development authority
You can cross-check the information that you receive from the sponsor with relevant development authorities, such as the RDA, LDA, and CDA.
Identify the location:
If you consider investing, location is usually the first thing you think of, but it is best to know the background first to avoid any pitfalls. You should visit the society and examine the access roads. A direct approach is highly recommended if society thrives in the suburbs of a city. Examine the land contours and other characteristics of the area. Look for any upcoming federal or private projects in that area.
Find out about the developer:
There is a high probability that its developer will also be good if the sponsor is a credible person or company. Nevertheless, it would be best if you researched the developer beforehand. If the developer has worked on other projects, you should verify development standards. If standards are good, add the developer to your white list. However, place the developer on your grey list. Whenever you decide to purchase a property, you should do your homework yourself. If you cannot visit yourself, you can authorize a trusted person to do so on your behalf. Here are some steps you might want to follow to avoid being scammed by property dealers.
Choose a reputable dealer:
You cannot rely on everyone in the market. Look for known and licensed dealers who have worked in the industry for a long time. Your research will lead you to many agents. Do not be fooled by cunning agents or big offices. Choose real professionals who are trustworthy and reliable. As soon as you have found a trusted real estate agent, move on to your property search.
Check the plot location:
Verify the plot’s location on the ground instead of relying on the map. Get an exact location by using Google maps if it is not developed. Avoid deep plots or rocks. Pick a level plot if possible. Select top sites with a better view if the area is on a hill.
Review market prices:
It is advisable to walk out to check other offers in the market if your dealer has put a price demand on a property. You can visit one or two more agents to check out pricing near your property and use online portals to compare prices.
Verify documents and meet owner:
Request a copy of the plot or property from the owner or dealer once you’ve decided on the property and its price. Verify the documents before paying token money. As soon as you receive the confirmation from the society office, you can proceed with confirmation payments. If possible, pay token money by check or pay order instead of cash.
It is best to ask your agent to arrange a meeting with the seller. If your agent avoids the meeting, you should avoid it. Doing so may guard you against being cheated.
Sign an agreement:
An agreement should be drawn up at the time of token, and all terms should be written down and signed by both parties. Your dealer needs to know how much commission, transfer, and tax expenses will cost you so that you can prepare accordingly. It is important to use a check or a pay order for your transaction. Cash payments do not have an official record.
Get a copy of the sale agreement:
At the transfer time, ask for a copy of the sale agreement. Payment for the plot will appear on the agreement as well as you can see the check number/pay order number or cash amount.