The real estate market of Pakistan is at its peak of growth. The market is expanding rapidly, and options for people who are looking for a house to live in, or make investments are increasing daily. And since the market is growing, the returns on investments are truly impressive.
But just like any other growing market. Pakistani real estate business is also filled with numerous frauds and corrupt people which might make your experience worse in this market.
Do you fear losing your life earnings?
Many people often lose savings which they earn their whole lives in these property frauds. Most of the time new and unaware people are tricked. But many old players are also sometimes fooled by these scammers for several reasons.
Here is the best guide for buying a property in Pakistan. This guide contains all the facts you need to know before proceeding with any deal.
Cases are variable in different states but this article contains general aspects you can contemplate while looking for a property.
Buying A Property In Pakistan
There are macro perimeters and things to consider while choosing and buying your property. This is how you can buy property in Pakistan
1. Check out Market values
The first thing you need to do before going for a deal is to do some legwork and inquire about the prices of a specific society or area you’ve decided to buy your plot in.
You can check out for values online or perhaps consult an estate agent and get information about the prices of plots in your desired area.
Knowledge of prices and market value is very important and this information can help you a lot to grab the perfect deal. Any realtor or owner can easily take advantage of your lack of this information.
You can probably end up paying a lot more than the actual price.
2. Know Who’s the seller
Elucidate who is the seller. Like who is the owner of the property. Is it the realtor? Builder? Or some other individual?
It’s pretty important to recognize who is the owner because if the realtor is the owner then he will act biased and will keep his interests prior. The same goes for the builder.
Also, you should not directly deal with the owner of it as a separate individual. Hiring a real estate agent is preferable.
3. Demand NOC and other documents
If you are buying a property in an underdeveloped society or housing scheme. You must check NOC or certification documents from the revenue departments and the related authorities in that city.
You can also go the extra mile and take those documents to the authorities and verify them. It can be fake, people have seen several cases in which people were scammed and the shown documents were bogus.
In Karachi, you can go to the Karachi development authority (KDA). If it is in Lahore, you can go to the Lahore development authority (LDA), etc.
A real estate agent, if hired, is responsible for all the verification and ensures the stability and legality of that property. So always hire a trusted agent and keep an eagle eye for this stuff yourself.
4. Provision of amenities
You should also make sure that the property you are buying has access to all the basic amenities like Water connection, gas line connection, and electricity grid backup. In Pakistan, this is a very significant concern while buying a property.
Most of the times when a housing scheme is registered by the developed institutions and authorities in Pakistan, the amenities are eventually provided.
But it can also take up to years, and you can get in serious trouble if you are looking for a place to live. In Pakistan, you should always seek a property that already has access to all basic needs.
For investors, on the other hand, you can buy a property that does not have connections yet. So that when the connections are accessible, the price will go up. But again it’s highly subjective to situations and areas.
Moreover, you should also consider inquiring about whether the connection charges of these amenities are included in the price of the property or will be asked afterward. These factors should be clarified before the payment and transaction to avoid discomfort and dispute.
5. Use legal documentation
In Pakistan, there are a lot of stamp papers and other documents available which are neither reliable nor dependable.
Usually, good realtors and estate agency companies provide the most authentic and reliable stamp papers and legal papers but you should make sure that proper material is being used.
However, to fill up the documents like sales agreement and transfer application a lawyer or law consultancy provider should be hired. There must be no mistake in the documentation that undergoes in a property deal.
These little mistakes seem negligible but in the long run, if you ever have to go to court for resolution of any matter. These small mistakes can become a nightmare.
6. Discussion of payment deadlines
In Pakistan, the majority of people pay in 2 to 3 instalments for the property. The deadline for each payment or if there are no instalment limitations then the deadline of total payment must be discussed before signing any contract or agreement.
Again this is the work to be done by the real estate agent. Therefore, the key to a perfect and hassle-free property deal is a trusted, experienced and efficient real estate agent.
That’s it. These are the common steps observed in buying a property in Pakistan. The procedure is a little bit different if you are buying rural or agricultural land.
Important Tips To Prevent Frauds
Frauds in the real estate market of Pakistan are quite common. Most of the times people become a target became of their lack of awareness and trusting everyone blindly.
Here are some tips you can use to prevent the common frauds in buying a property.
1. Visit A law firm
A law firm is a company of business that provide advice related to your rights or liabilities in a property deal.
A law firm will guide you about what documents a property must have to be legal.
What are the rights of a seller, what are the rights of a buyer and so forth.
The main intention to consult a law firm is to gain as much knowledge about Property dealership as possible.
2. Hiring a trustworthy State Agent
In Pakistan, numerous real estate agents and realtor companies are present. But you should always choose a trusted agent that is well experienced, ethical, and honest.
Most of the time the agents in Pakistan work as dual agents. A dual agent is obliged to work unbiased for the equal interests of both parties involved in a deal.
The job of a real estate agent to make a deal according to the interests of both parties and keep the deal as transparent as possible. He is also liable to maintain all the legal documentation.
3. Do not buy a property based on a sales agreement
Several times people sell the property based on the sale agreement and pay the rest of the remaining amount by selling that property to another person with interest.
Don’t buy a property that is not owned by the seller. This method is not legal and you can be scammed easily if the person backs off.
The sales agreement has no legal value as a certification of ownership. It can be proof for a property deal but not the ownership.
4. Don’t go for the cheapest property
Properties in different areas have variable market values. Even in a single society, based on various reasons, the prices are not uniform.
If you find a person selling his house got a low price, remember that he would be well aware of property prices in that area. There will be a reason he is selling his house at a low price. He might mention it, but he can also hide it.
It could be improper documents, poor house construction or designing, third-class material, etc. Sometimes people do sell their house at a relatively low price because of an urgent need for money. But this is very rare. If you are going for a cheap property then stay cautious and do all the inspections of the house. From documents to material check everything.
5. Document your payment deadline
Deadlines in Property dealings are very important. If not followed properly, you can lose the property or your given money can be forfeited.
Always write down deadlines in the sales agreement so that you have reliable evidence and there is no chance of a dispute. Verbal commitments are not legal and you can get in trouble if you followed a verbal commitment and disobey the written deadline. The other party holds the right to charge you for your disobedience.
In case you need to go to court, the only deadline that is written will be considered original and authentic. So no matter how much a person is promising you, write the deadlines that are decided.
6. Pay through Bank Order
In Pakistan, it is observed that the majority of payments are some by cash. Millions of rupees are transferred through cash. These transactions are untrackable and there is no material proof or evidence that this transaction took place.
Pay the amount of the property through Bank payment orders so that there are reliable proofs that you paid the amount to the seller.
In case the seller is corrupt and backs of, you can derive proof to prevent frauds and save your valuable capital.
Laws regarding property buying and transfer in Pakistan
Following are the laws and acts that regulate property dealing and ownership in Pakistan
- The Transfer of Property Act,1882;
- The Punjab Tenancy Act,1887;
- The Government Tenants Act,1893;
- The Land Acquisition Act,1894;
- The Registration Act,1908;
- The Colonization of Government Lands Act,1912;
- The Sindh Tenancy Act,1950;
- The Khyber Pakhtunkhwa Tenancy Act,1950;
- The Provincial Land Revenue Acts of 1967;
- The Baluchistan Tenancy Ordinance,1978;
- The Land Record Manual;
- The Land Administration Manual; and
- The Settlement Manual.
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