Owning a property has a lot of perks. You can either live in the house, rent it out or sell it when you see a profitable deal. If you are planning to sell property, you should first look at the real estate market. Do your research and find out the value of your property. It is recommended to set your price a little higher than the market rate. When someone is the owner of a property, they basically own the title of the property. If you want to transfer property, it basically means to give the title of the property to someone else. It does not always mean selling the property. It could be a gift, mortgage or lease. Now, who is eligible to transfer property? The answer is simple. Whoever is old enough to have a national identity card (CNIC) — 18 years and above. There are also different laws for buying and selling property in Pakistan. We shall now discuss in detail the concepts of token money and bayana.
So, what is token money? Token is a small amount of money that has to be paid by the buyer as an indication of serious intent to purchase a property. Token money is paid on mutual agreement between the buyer and seller about the selling price. In most cases, the deal is facilitated by an agent, who possesses the verified contact details of the seller.
If you are dealing with an agent who is registered with the respective society where a property is located, the agreement details are written on the agent’s letterhead. This includes information about the token money, the name of the buyer, plot number, name, the size and price of the property, and the time frame in which the buyer has to make the remaining payment. Now, the next question you may ask is whether token money is refundable or not?
There are two types of token: conditional and confirmed.
The token given and received on soft terms and conditions is a conditional token. When a buyer decides to acquire a certain property, they offer a small amount ranging from PKR 25,000 to PKR 100,000. If, for some reason, the deal falls through, there is no penalty and the same amount is returned to the buyer.
After paying the conditional token amount, the buyer then can verify the ownership of the property from the respective housing society to make sure the seller is the actual owner. For this step, the seller grants permission in writing, which allows the respective authority to share the ownership details and legal status with the buyer, whose name and CNIC number is also mentioned on the application. A copy of the plot owner’s CNIC is attached to the application.
Documented token money, in which the terms and conditions are mutually set between the buyer, seller and the agent (if there is an agent mediating), is called the confirmed token. This agreement includes terms such as the time frame in which the bayana needs to be paid, the selling price of the property and the penalty in case one of the parties backs out. If the buyer fails to meet the bayana deadline, he loses his token money; if the seller backs out from the deal, he is legally bound to pay double the amount of the token money to the buyer.
If the buyer is in a position to purchase the property at hand within a week or two, the confirmed token also acts as the bayana. The confirmed token is usually an amount higher than conditional token and less than the bayana. So, once the token amount is paid, bayana is the next step. It’s just like the token money, only that it is officially written and signed.
Bayana is a formal agreement written on stamp paper with related conditions set by both the buyer and the seller. It is usually paid one week after the token money. Terms include the time frame for the property transfer and the payment of the remaining amount, which is often between 10 to 30 days but can be more.
Ideally, the bayana amount should be one-fourth of the total price. The longer the time frame to clear the remaining amount, the higher the bayana. During this time, the seller applies for the No Demand Certificate (NDC). This certificate is given by the respective housing authority in the presence of both parties. The property is transferred right away and the seller receives the bank draft.
If the deal falls through after the bayana due to some problems on the seller’s end, they are legally bound to pay double the bayana amount as penalty. If the buyer backs out, they lose the bayana amount.
Popular housing societies and security measures for sellers
DHA Karachi is a popular housing society. It recommends sellers to include a special clause in the agreement according to which if the buyer fails to make the balance payment within the due date, then the seller can confiscate the advance money. In the same way, if the seller refuses to transfer the property, then they will be liable to return double of the advance (bayana) received. As per DHA Karachi’s guidelines, even if sellers sign the agreement in front of DHA’s designated officer, they own the property unless documents are officially transferred. In case of a dispute with the buyer, the property can again be revalidated in your name within the specified period. However, you can not claim over the property, once you have transferred the documents to the buyer. For more details, you can also take a look at how to sell and buy property in Pakistan.
Remember, buying and selling property involves a lot of risks. Make sure to go over our guide to avoid common real estate scams. For similar tips and information, stay connected to Zameen Blog, the best property blog in Pakistan.