By Petronus Realty
Most of the confusion in a property transaction comes from not knowing who is being paid by whom. It is worth ten minutes to sort that out, because it explains almost every piece of advice you will be given.
Three prices, not one
The asking price is what the seller has listed. The circle rate, or guideline value, is the government's minimum valuation for the purposes of stamp duty — you cannot register below it, whatever you actually paid. The transacted price is what the flat changed hands for. Portals and news reports mostly quote the first. Only the third tells you anything about the market.
In a soft market the gap between asking and transacted widens, which is why average asking prices can look flat while sellers are quietly taking less. Ask for recent registered transactions in the same building. They exist and they are public.
Who gets paid, and by whom
- A developer sells its own inventory. Its sales team works for the developer.
- A channel partner, which is what we are, is appointed by a developer to sell a project and is paid a commission by that developer on completion. The buyer pays nothing.
- A broker in a resale transaction is usually paid by both sides, commonly one to two percent each.
- A buyer's agent is paid only by the buyer, and is still rare in India.
None of these arrangements is improper, but they are not interchangeable. Knowing which one you are talking to tells you whose interest the advice protects when the two diverge. We state ours in writing on every listing.
Why supply reacts slowly
Housing supply takes years to respond to demand — land acquisition, approvals, financing and construction run to three or four years on a well-run project. That lag is why prices overshoot in both directions: by the time the supply arrives, the demand that triggered it has often moved to another micro-market. It is also why a launch wave in one corridor tends to soften prices there three years later.
For a buyer, the practical consequence is that the best time to negotiate is when a lot of inventory is being delivered at once, not when a lot is being launched.
We will show you the registered comparables for any project we introduce, including the ones that argue against buying it.