FAQ

FAQ

FAQ – For Property Buyers

Do I really need a Realtor/ Real estate agent when buying a home?

When buying a property, it’s strongly recommended you have a Realtor / Real estate agent to find the perfect property for you. There are many reasons why you should have a Realtor represent your best interests when buying a home. Keep in mind, all Realtors are not the same!
Realtors/ Real estate agents have an extensive network with properties that are never advertised for personal reasons, where you would miss out on these prime properties if you opted not to seek the assistance of an agent.
They are well experienced and would be able to advise you on various pitfalls in different stages of the transaction and guide you through the transaction
They would filter available properties, and present to you only the ones that would match your requirements such as the area, road frontage, road access, neighborhood, house requirements, budget etc.
They would be able to negotiate the best price for you as they are knowledgeable of the up to date pricing of real estate/ housing units
They will have access to the services of lawyers, valuers, surveyors etc. should you require any of them during the transaction.

What information should I give the real estate agent when I am engaging them to find my ideal property ?

You are encouraged to meet the real estate agent when you want him to find you a property that is best for you. This would also build a rapport with the agent, and he will be able to assess your requirement better.
Provide him with the following information

  1. Type of property (House/ land/ apartment/ commercial property Etc.)
  2. Purpose of the property – For house, shop, build apartments, for industry (what type)
  3. Area of the property
  4. Extent of the property
  5. If it’s a house or an apartment – No of rooms, bath rooms, parking, and other utilities)
  6. If it’s a commercial property number of squire feet, number of floors, lift, air conditioning,
    Parking.
  7. Road frontage required
  8. Width of the access roads
  9. Distance from the main road or any town or landmark
  10. Neighborhood
  11. Your budget

What happens when the agent presents me with properties?

The agent may provide you with a list of properties that suits your requirements or would present one property at a time.
If the presented property interest you, you should inform the agent of your interest so that he could make arrangements for you to visit the property.
The agent, most often would accompany you, when visiting the property.

What if I do not like a property that is presented to me?

Just inform the agent that you are not interested in the said property. The agent may ask you for the reasons for your decline. This is to fine tune his search thereby resulting in better suited properties presented in the future.
Please do not feel embarrassed to decline a property that is presented to you. If you do not inform your decision to decline, the agent is unaware and may keep on pressing you for a decision. They will stop searching for other properties as they may think you have selected the presented property.

What if I like a property that is presented to me and I like to buy it?

Please inform the agent of your intent to buy the property. Discuss with him the purchase consideration you wish to pay for the property. You would be required to sign a letter of intent indicating your intent to purchase the property at a specific price subject to all legal and other requirements are in order. This letter would also request the owner for copies of deeds, survey plans and other connected documents for you to process the transaction.
If the owner is agreeable to your offer and once the documents are received, they would be handed over to your lawyer for a title search to see the legal acceptability.
If the property is legally acceptable, you can now buy the property

What are the costs relating to buying a property?

Usually the stamp duty and the lawyer’s chargers for the transfer deed will have to be borne by the buyer.
If the buyer is seeking a bank loan, then all cost relating to the bank loan would have to be borne by the buyer such as valuation fee, title search fee, mortgage and execution fee

Should I pay the buyer in cash?

You could pay the buyer in cash; however, it is much safer if done through a bank draft (Casher’s Order / Pay Order) which is good as cash

Should I have to pay my real estate agent?

It is usually the seller who would pay the real estate agent. However, depending on the complicity of the transaction, the agent may request you for reimbursement of certain expenses incurred by them.
Please ask them in advance for transparency.

Should I talk with a bank before looking at properties? (If you plan to get a bank loan)

The answer to the question is YES! There are many reasons why you should talk with a bank and get to know

  • What is the loan amount that can be obtained for the income you get
  • What are the documents what is required to process the loan
  • What is the percentage of the value the bank would lend
  • What is your contribution for the house
  • How long will it take to obtain the loan
  • What are the cost involved

First and foremost, talking with a bank before looking at homes can help you understand exactly how much you can afford to spend on the property.

Should I buy or continue to rent?

Buying a home can be a solid investment specially during a time where property prices are on the rise. Rent on rented premises too would experience a similar increase over time. Therefore, the person renting out eventually would be required to pay a higher rent every 2 – 3 years. When this rent surpasses your affordability, you would be required to move to a lesser convenient neighbourhood.
Therefore, it is advisable to buy rather than rent when it comes to residential properties.

Can a home depreciate in value?

Generally, real property never depreciates in value, or more so, it is very common for property to appreciate in value. This is why it’s a great investment to consider.

I plan to sell my own house/ property to buy another house/ property, should I buy before selling my current property?

Buying a property before selling your current one.
The biggest benefit to buying a house/ property before selling your current home is that you have a suitable property lined up for occupation specially if the new property is a good buy and perfect for your requirements. This can reduce the stress and pressure of having to find a property once your current land/ house is sold.
But how will you finance this transection if you do not have access to surplus funds. In this case you can ask for a bridging loan from a bank, where the bank gives you a mortgage loan over the new property to be settled with the proceeds of the sale of your own property.

Selling your current house/ property before buying a new one
Selling your current house/ property before buying a new one will put you in an ideal position to negotiate the best price for your new home as your are ready with the cash.
One risk of selling your current home without buying a new home first is the chance of not being able to have a place to live. There are options such as “rent-back” where the new owners of your house can give you the house on rent for a specific period during which time you can you’re your ideal property.

FAQ – For Property Sellers

What steps should I take to prepare my property for sale?

Not properly preparing your home for sale can put the owner at a huge disadvantage. The expression “You never get a second chance to make a first impression” is absolutely true when it comes to selling a property. Make sure that your property is well cleaned, cleared and boundaries properly demarcated. If it’s a house make sure that the walls and floor are cleaned (painted/ polished) wood work is in good condition, remove the clutter and make sure that it does not have unpleasant odors. House should have good light with clean windows and good curtains. Basically, it should give a good first impression.

How much is my property worth?

This is not an easy question to answer. You can always get the advice of your real estate agent. The market value of your property will depend on number of variables such as the locality, distance from main road or a town, width of the access road, road frontage, the shape of the land, the extent etc. If it’s a house, when was it built, squire area, number of stories, number of rooms/ wash rooms, number of car parking slots, type of finishing (basic, semi luxury, luxury, super luxury) and other amenities.
It is always important to seek the advice of your real estate agent for the market value of the property. The agent would be able to advise you on the market value of the property based on a comparative market analysis, so that you would get the best deal for your property.

Can I determine how much my property is worth from an internet website?

No. Most of the online advertising platforms show the price of a property which the buyer would like to have and does not reflect the actual price the property was sold. So, the internet platforms are not good indicators of the actual market value of a property.

Should I price my property higher to leave room for negotiations?

In most matured real estate markets, this is not recommended as the buyers are aware of the market value of properties and a higher listed price would discourage potential buys from making inquiries.
However, in markets like in Sri Lanka where real estate markers are relatively young, buyers are in the norm that the listed prices of property are higher than the actual accepted price of the seller. Therefore, it is better to escalate the price marginally with the advice of your real estate agent which would leave room for some negotiation.

Why shouldn’t I price my home on the high end?

Well, several factors that you should know

  • You might help sell similar homes that are priced lower.
  • Your home may be on the market longer.
  • You could lose market interest and qualified buyers.
  • You might create a negative impression of the property.

It is not recommended to try to sell your property any higher than the appraised value unless demand is high in your area. Ask you real estate agent which price would be right for your property.

What should I do If I get low offers?

Generally, sellers get upset when they receive low ball offers. However, a low offer is always better than no offer. The seller should keep in mind that a low-ball offer could be turned in to a deal if the negotiations are done right.
What you should do

  1. Do not get emotionally upset
  2. Do not antagonize the buyer
  3. Start negotiating by counter offers
  4. Always ask your agent to assist you in the negotiation

Should I have an agreement with the real estate agent for them to promote my property?

Yes. We expect the seller to give us a mandate to sell his property with the right to advertise. We have a simple agreement / letter of mandate to be signed by the property seller to give the such authority to the agent.
Most often common brokers would undertake to sell your property without any agreement. However real estate agents who are professional in their activities would require a mandate/ authority from the property seller to act on their behalf.

Do I have to pay the agent for his services?

Marketing, advertising, showing the property to the prospective buyers, filtering of buyers etc. would be done free of charge. You would be expected to pay a service fee to the agent on a successful transection.
The service fee would be negotiable with certain options

  • Pay a certain percentage (%) of the sales consideration.
  • Pay a certain value for the whole transection or per perch of land
  • Pay the value in excess of the consideration you would want for your property

How will the agent market my property?

We use several marketing / advertising platforms to market your property

  • Our own web site (free)
  • Highly rated and optimized common advertising platforms (free)
  • Social media – Our own page (free)
  • Social media – Through common pages like “Find my Property” which are also administered by us (free)
  • Email campaigns (free)
  • Print media
  • Banners & Posters (On site)
  • Direct marketing to our network of high net-worth individuals and companies (free)
  • SMS marketing

(Please note charges may apply to some methods)

What are the documents that we need to give the agent?

  • Real Estate Agent Agreement / Letter of mandate
  • Copy of the latest deed
  • Copies of other previous deeds
  • Copies of Approved survey plan (within 10 years)
  • Copies of related survey plans in hand
  • Street Line/ Building Line Certificates
  • Ownership / Non-Vesting Certificates
  • Extracts of the land registry for 40 years (Required if the buyer is going on for a bank loan)
  • Any other connected documents

My survey plan is more than 10 years old. What should I do?

Usually a survey plan is accepted for 10 years from the date of surveying the land. If the survey plan is more than 10 years old there are two options to rectify this.

  1. Get the surveyor of the land to certify (On the Plan) that the boundaries are correct in today’s context
  2. Get a new plan drawn

Seller will be able to get the assistance of our panel surveyors

Should I get the new survey plan approved by the local authority?

It is advisable to get the survey plan approved by the local authority, especially if the buyer wish the get a bank facility to buy the property.
We will assist the seller to get the plan approved by the local authority.

What is a “Street Line Certificate”?

Street Lines are marked by the government, when there are plans to widen any road. The street line denotes the extent which the road would be widen. If a street line is passing through a particular land, this means that the owner of this land would have to give a part of his land (Up to the street line) as and when the road widening is done for which the owner would receive compensation as per the government valuation.
Street line certificate would certify whether the subject land if effected by a street line or not. If it is effected the certificate would provide the drawing of the street line on a copy of survey plan.

What is a “Building Line Certificate”?

Basically, all road would have a building line where it indicates the minimum distance a building should be from the center of that particular road.

What is an “Ownership Certificate” ?

All land owners are required to update the ownership name of a particular property in the registers in the local authority office. Ownership certificate indicate the name of the registered owner in the books of the local authority office

What is a “Non-Vesting Certificate”?

In most local authorities, the property owners are required to pay a tax to the local government each year. If this taxes are not paid the local government has the right to acquire such properties to the government. Non-Vesting certificate indicates that all taxes pertaining to the property has been paid and the property has not been vested by the government.

How many days will it take for me to get these local government certificates?

Usually it takes a few days. But we will assist you to get them without much hassle.

What are “Extracts”?

All land transactions are recorded in land registries located in different geographic locations in Sri Lanka. They act as the record keepers of all land transactions and referred to find the ownership/ title of property.
Extracts are the certified copies of registers of the land registry pertaining to a particular property. Usually Banks require clear title for 30 – 40 years. Therefore it is advisable to obtain extracts for the past 40 years

What are the cost involved in selling a property?

You are required to provide a complete set of documents to the buyer for him/her to start processing the transaction. Therefore, the seller would be obliged to pay for any cost in providing all related documents to the buyer.

Why isn’t anyone looking at my home?

In most cases, the reason your property is not being looked at by potential buyer’s is due to the price. Buyers who feel the property is priced too high and will choose to look at other properties before yours, likely finding one before they reach yours. Other possible reasons may be due to your home is not being kept in a good condition & appeal or located in a poor location.

Should I be present during showings of my property to prospective buyers?

It is not mandatory to be present when the agent shows the property to prospective buyers. It is even said that it is better for you to be not there as the prospective buyers would be more comfortable in talking about their concerns on the property in your absence for which the agent can give defensive answers to convince the buyer. If you are in the location, the buyers may not express their concerns, not to offend you, but would carry the negative thoughts with him.

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