A Beginner's Guide to Investing in Nepalese Property
The Himalayas, with their breathtaking beauty, offer untapped investment potential. Situated in the heart of the world's highest mountain range, Nepal presents a unique opportunity for investors to explore its burgeoning real estate market. As the country emerges from a turbulent past, its property sector is experiencing growth driven by tourism, government infrastructure projects, and a growing expatriate community. For those looking to diversify their portfolios, investing in Nepalese property can be a profitable venture. However, navigating the complexities of foreign property investment can be challenging, especially in an unfamiliar region like the Himalayas. This beginner's guide provides a comprehensive roadmap for investing in Nepal's promising property market, including tips on obtaining a home loan. It covers local laws and regulations, identifies lucrative investment opportunities, and offers insights to help you make informed decisions as a first-time buyer. 1. WHY INVEST IN NEPALESE PROPERTY? Nepal, nestled in the Himalayas, offers untapped opportunities for investors. As the country emerges from its tumultuous past, its economy is poised for rapid growth, making it an attractive destination for real estate investment. The Nepalese property sector offers a blend of affordability, potential for high returns, and a growing demand for quality housing and commercial spaces, making it an attractive option for those interested in buying property in Nepal. With government policies promoting foreign investment, the door is open for international investors to capitalize on Nepal's burgeoning economy and take out home loans to buy property. The tourism industry, a significant contributor to Nepal's GDP, is also on the rise, increasing demand for hotels, resorts, and other tourist infrastructure. Additionally, Nepal's strategic location between India and China makes it an ideal hub for trade and commerce. As urbanization continues, the demand for modern housing, office spaces, and retail centers is increasing, creating lucrative opportunities for investors. The relatively low cost of land and construction, combined with high rental yields, makes Nepalese property an attractive option for diversifying investment portfolios and securing home loans. Whether you're a seasoned investor or just starting out, Nepal's property market offers a compelling proposition for those interested in real estate property in Nepal. 2. AN OVERVIEW OF THE NEPALESE REAL ESTATE MARKET The Nepalese real estate market is experiencing significant growth driven by economic development, tourism, and foreign investment, offering numerous opportunities for those interested in buying property in Nepal. The capital city, Kathmandu, is the epicenter of this boom, with new developments in areas like Thamel, Boudha, and Patan offering ample opportunities for buying property. Tourist hotspots like Pokhara and Chitwan are also seeing a rise in luxury resorts, hotels, and vacation homes. The Nepalese government actively encourages foreign investment, introducing policies and incentives to attract international investors. With a low cost of entry, a growing economy, and high demand for quality properties, the Nepalese real estate market presents a compelling opportunity for investors looking to buy real estate property in Nepal. 3. UNDERSTANDING THE LEGAL FRAMEWORK FOR FOREIGN OWNERSHIP Understanding the legal landscape governing foreign ownership in Nepal is crucial for successful investment. The Nepalese government has implemented regulations to ensure foreign investment, including the buying of real estate property, benefits the local economy. Foreign nationals are permitted to purchase property in Nepal, but certain restrictions and requirements must be met. The Foreign Investment and Technology Transfer Act (FITTA) and the Immigration Act govern foreign ownership. Under these laws, foreign investors must obtain a license from the Nepal Rastra Bank (NRB) and register their investment with the Department of Industry (DOI) to engage in real estate transactions. Foreign investors must maintain a minimum balance of Nepalese Rupees (NPR) in a Nepalese bank account to fund their investment. There are restrictions on the types of property that can be owned by foreigners, with certain areas, such as those near military bases or national parks, being off-limits. However, the government offers various incentives and tax breaks to attract foreign investment. By understanding the legal framework and working with local experts, foreign investors can navigate the process successfully. 4. POPULAR LOCATIONS FOR INVESTMENT IN NEPAL Understanding popular investment locations in Nepal is crucial for making informed decisions and negotiating with sellers effectively. Kathmandu, the capital city, is a hub for tourism, commerce, and industry, making it attractive for investors seeking high returns in real estate property. Neighborhoods like Thamel and Boudha are ideal for commercial property investments due to their high foot traffic and amenities, making them prime locations for buying real estate property in Nepal. Pokhara, a picturesque lakeside town, is popular among tourists and locals. Its natural beauty and growing popularity as a trekking and adventure destination make it excellent for investing in hotels, resorts, and vacation rentals. Chitwan, near the Chitwan National Park, attracts eco-tourists and wildlife enthusiasts, creating demand for residential and commercial properties. Other locations like Bhaktapur, Patan, and Nagarkot offer cultural heritage, natural beauty, and investment opportunities. These areas are known for their rich history, stunning architecture, and breathtaking views, making them ideal for tapping into the growing tourism industry. 5. TYPES OF PROPERTIES TO INVEST IN: FROM APARTMENTS TO RESORTS Nepal offers a diverse range of property types for investment, catering to different interests and budgets. Apartment complexes in urban centers provide rental income and long-term appreciation, meeting the housing demand from locals and expats. Commercial properties like office spaces, retail shops, or restaurants offer steady rental income. Investing in resorts, hotels, or guesthouses can be lucrative, given Nepal's growing tourism industry and increasing ghar rentals. Owning a picturesque resort in the Himalayas, catering to travelers and adventure-seekers, can translate to significant returns. Holiday homes or villas in scenic towns can generate substantial income during peak tourist seasons and serve as personal retreats. The type of property you choose depends on your investment goals, risk tolerance, and preferences, whether you're considering real estate property for personal use or commercial purposes. Nepal's property market offers various opportunities to suit unique needs and aspirations. 6. THE PROS AND CONS OF INVESTING IN NEPALESE PROPERTY Investing in Nepalese property has advantages and disadvantages. The country's real estate market offers growth opportunities with a growing economy and tourism industry driving demand for accommodation and commercial spaces. Nepal's natural beauty and cultural heritage attract travelers and expats, promising a steady stream of potential renters or buyers. However, challenges include developing infrastructure, bureaucratic red tape, and natural disaster risks like earthquakes and landslides, which can impact property value. Nepal's cash-based economy can make it difficult for foreign investors to repatriate profits. Despite these challenges, the rewards can outweigh the risks with the right guidance and support. 7. RESEARCHING THE MARKET: WHAT TO LOOK FOR AND HOW TO DO IT Thoroughly researching the local market is crucial for successful investment, especially when dealing with real estate transactions, securing home loans, and understanding payment processes. Gather information on market conditions, including demand and supply, prices, and rental yields. Analyze demographics, infrastructure, government policies, and regulations. Consulting local experts, attending property exhibitions, and networking with other investors can provide valuable insights. By doing due diligence and understanding the market, you'll be better equipped to make informed investment decisions and avoid potential pitfalls when buying property in Nepal. This will help you find the perfect investment opportunity that meets your needs and goals. 8. FINDING THE RIGHT PROPERTY: TIPS AND TRICKS Finding the right property in Nepal requires a clear understanding of your investment goals and thorough research. Identify whether you're looking for a rental property, vacation home, or long-term investment, especially if you are a first-time buyer in Nepal. Consider factors like proximity to tourist hotspots, access to amenities, and the local economy. Inspect properties for damage, wear, and tear, and potential renovation costs. Hire a local expert for a property inspection to ensure the deed is in order. Be flexible and patient, as the Nepalese property market can be unpredictable. Consider discussing potential changes with the seller to better navigate the market. 9. WORKING WITH LOCAL REAL ESTATE AGENTS AND LAWYERS Working with local real estate agents and lawyers is crucial for navigating Nepal's property market. A reputable agent provides insights into the local market, facilitates communication, and assists with negotiations. A local lawyer specializing in property law helps draft and review contracts, ensures legal compliance, and conducts property due diligence. Local experts minimize risks, miscommunication, and costly mistakes, guiding you confidently through the real estate property in Nepal market. 10. FINANCING YOUR INVESTMENT: OPTIONS AND CONSIDERATIONS Financing options for Nepalese property investment include securing a mortgage from a Nepalese bank, partnering with a local developer or investor, and considering overall costs like registration fees, property taxes, insurance, and maintenance. Weighing financing options and considering market challenges and opportunities ensures a successful investment. 11. MANAGING YOUR PROPERTY FROM AFAR: TIPS FOR OVERSEAS INVESTORS Managing a property in Nepal from afar requires a reliable local property manager, meticulous record-keeping, and staying informed about local market trends and regulations. Regular communication with your property manager and stakeholders is essential for addressing issues promptly. By being proactive and organized, you can successfully manage your investment from a distance. 12. TAX AND RENTAL INCOME: WHAT YOU NEED TO KNOW Understanding the tax and rental income landscape in Nepal is crucial for anyone interested in buying property in Nepal. Non-resident foreigners face a 10% withholding tax on rental income, deducted by the tenant. Property owners must file annual tax returns to comply with regulations governing real estate in Nepal. Nepal's low property tax rate ranges from 0.2% to 0.5% of the property's value. Nepal's growing tourism and expat community create strong rental demand, offering decent rental yields. Researching the market, understanding competition, and setting realistic rental expectations ensure profitable investment. 13. POTENTIAL RISKS AND CHALLENGES TO BE AWARE OF Potential risks of investing in Nepalese property include political instability, developing infrastructure, language barriers, bureaucracy, natural disasters, changing laws, and corruption. Being aware of these risks and mitigating them ensures informed investment decisions. 14. CONCLUSION: IS INVESTING IN NEPALESE PROPERTY RIGHT FOR YOU? Investing in Nepalese property offers potential growth and profit but requires navigating a foreign market and unique challenges. With a growing economy and affordable property prices, Nepal presents significant opportunities. However, investing requires courage, patience, and perseverance. Understanding the market and following expert advice ensures a successful investment journey in the Nepalese property market.
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Don’t Get Caught: Top 5 Real Estate Scams to Watch Out For in Nepal
The thrill of buying or selling a home can quickly turn into a nightmare when scammers come into play. The real estate industry in Nepal is a prime target for fraudulent activity, with unsuspecting individuals and families losing significant amounts of money each year to cleverly crafted scams. From fake online listings to deceitful wire transfer schemes, the tactics used by scammers are constantly evolving, making it essential for buyers, sellers, and real estate professionals to stay one step ahead. In this post, we’ll shine a light on the top 5 real estate scams to watch out for in Nepal, providing you with the knowledge and tools you need to protect yourself and your investments from these nefarious schemes. Whether you’re a seasoned real estate pro or a first-time buyer, this guide will help you navigate the complex world of real estate with confidence and caution. 1. INTRODUCTION TO REAL ESTATE SCAMS In Nepal’s real estate market, where trust and transparency are paramount, scams and fraudulent activities can be devastating for buyers, sellers, and agents alike. The dream of owning a home or investing in lucrative property can quickly turn into a nightmare when scammers come into play. With the rise of online transactions and anonymous interactions, the real estate industry has become a breeding ground for clever scams and deceitful tactics. From fake listings to fraudulent wire transfers, these scams can result in significant financial losses, damage to reputation, and even legal consequences. As the real estate market in Nepal continues to evolve, it’s essential to stay informed and vigilant about the latest scams and fraudulent schemes. In this article, we’ll expose the top 5 real estate scams to watch out for, empowering you with the knowledge to protect yourself and your clients from falling prey to these deceitful tactics. 2. SCAM #1: PHONY REAL ESTATE AGENTS AND BROKERS One of the most insidious real estate scams in Nepal involves phony real estate agents or brokers. These scammers often pose as legitimate professionals, complete with fake licenses, certifications, and even elaborate websites and social media profiles. They’ll promise unsuspecting buyers and sellers the world, touting their “expertise” and “years of experience” to gain trust and confidence. But behind the façade, they’re simply thieves waiting to strike. These con artists might claim to have access to exclusive listings, promise unusually high sale prices, or even offer to help with financing or other services. But once they’ve got their hooks in you, they’ll start making off with your money, personal information, or even the deed to your property. They might even create fake documents, contracts, and other paperwork to make their scam seem legitimate. The worst part? These scammers are often incredibly convincing, and it’s not until it’s too late that victims realize they’ve been had. That’s why it’s crucial to thoroughly research any real estate agent or broker before working with them, and to always verify their credentials and licenses. Don’t let these scammers catch you off guard – stay vigilant and protect yourself from this common real estate scam. 3. HOW TO SPOT A FAKE REAL ESTATE AGENT When it comes to buying or selling property in Nepal, it’s essential to work with a reputable and licensed real estate agent. However, scammers are getting increasingly clever, and it’s not uncommon for them to pose as legitimate agents to dupe unsuspecting clients. So, how can you spot a fake real estate agent? One red flag to look out for is an agent who is pushy or overly aggressive in their sales tactics. Legitimate agents will provide you with all the necessary information and let you make an informed decision, whereas scammers will try to rush you into a deal. Be wary of agents who are evasive or secretive about their credentials, such as their license number or professional affiliation. A legitimate agent will proudly display their credentials and be transparent about their experience and qualifications. Another warning sign is an agent who only communicates with you through email or text message, and is hesitant to meet in person or over the phone. This could be a sign that they’re trying to hide their true identity or avoid being traced. Additionally, be cautious of agents who ask for upfront fees or deposits, as this is not a common practice in the real estate industry in Nepal. By being vigilant and doing your due diligence, you can avoid falling prey to these scammers and ensure a smooth and successful transaction. 4. SCAM #2: FORECLOSURE RESCUES AND LOAN MODIFICATION SCAMS Foreclosure rescues and loan modification scams are a particularly insidious breed of real estate fraud in Nepal, preying on the desperation and vulnerability of homeowners who are struggling to make their mortgage payments. These scammers promise to help homeowners save their homes from foreclosure, but in reality, they’re only looking to line their own pockets. Here’s how it typically works: the scammer will approach the homeowner with a promise to negotiate with their lender to reduce their monthly payments or even erase a portion of their debt. In exchange, the homeowner is required to pay a hefty upfront fee, which the scammer will promptly pocket. Meanwhile, the scammer will do nothing to actually help the homeowner, leaving them in an even more precarious financial situation. In some cases, the scammer may even convince the homeowner to sign over the deed to their property, effectively stealing their home. It’s a devastating outcome for homeowners who are already under immense stress, and it’s essential to be aware of these scams to avoid falling victim. 5. RED FLAGS TO WATCH OUT FOR IN FORECLOSURE DEALS When it comes to foreclosure deals in Nepal, it’s essential to be extra cautious and watch out for foreclosure relief scams. Scammers often prey on unsuspecting buyers and investors who are looking for a quick profit or a good deal. To avoid falling victim to these scams, it’s crucial to know the red flags to watch out for. One major red flag is when the deal seems too good to be true. If the price is significantly lower than the market value, it may be a sign that something is amiss. Be wary of sellers who are pushy or evasive, and don’t provide clear documentation or information about the property. Another red flag is when the seller demands a large upfront payment or insists on a wire transfer. Legitimate sellers will not ask for this, and it’s a common tactic used by scammers to get their hands on your money. Additionally, be cautious of sellers who claim to have a “special connection” or “inside information” that will give you an edge in the deal. These are often just tactics to build trust and get you to let your guard down. By being aware of these red flags, you can protect yourself from falling prey to foreclosure scams and avoid financial disaster. 6. SCAM #3: RENTAL PROPERTY SCAMS Rental property scams are a common type of scam in Nepal’s real estate sector. Imagine finding the perfect rental property online - a beautiful, fully-furnished apartment in a prime location at a steal of a price. You’re thrilled to have snagged such a great deal, but before you can even sign the lease, the “owner” is pushing you to wire the deposit and first month’s rent to a mysterious offshore account. Red flags should be waving wildly, but in the excitement of securing a great rental, it’s easy to overlook the warning signs. This is exactly how rental property scams work. Scammers will create fake listings on popular rental websites, complete with stolen photos and descriptions of properties that don’t even exist. They’ll often claim to be out of the country or unavailable to meet in person, making it difficult for you to verify the property’s legitimacy. Their goal is to get you to send money without ever seeing the property or meeting the “owner” in person. By the time you realize you’ve been scammed, the money is gone, and the scammer has vanished into thin air. Don’t fall prey to these rental property scams - always be cautious when dealing with online rentals, and never send money to someone you’ve never met. 7. HOW TO AVOID RENTAL PROPERTY SCAMS When it comes to rental property scams in Nepal, it’s essential to be vigilant and take a proactive approach to protecting yourself. One of the most common types of rental scams is the “phantom rental” scam, where fraudsters pose as property owners or managers and advertise a rental property that doesn’t exist or isn’t available. They’ll often request a deposit or rent payment upfront and then disappear with your money. To avoid falling prey to these scams, it’s crucial to do your due diligence. Here are some tips to help you stay safe: * a. Research, research, research: Look up the property owner or manager online and check for reviews, ratings, and testimonials. Be wary of any red flags or inconsistencies. * b. Verify the property: Physically visit the property if possible, and take photos and videos to document its condition. This will help you avoid scams where the property doesn’t exist or is not as advertised. * c. Be cautious of too-good-to-be-true deals: If the rent is significantly lower than similar properties in the area, it may be a scam. * d. Never pay upfront: Legitimate landlords and property managers will not ask for payment before you’ve signed a lease or moved in. * e. Use secure payment methods: Paying with a credit card or using a secure online payment service can provide an added layer of protection. By being aware of these common scams and taking steps to protect yourself, you can avoid falling victim to rental property scams and find a safe and secure place to call home. 8. SCAM #4: INVESTMENT SCHEMES AND PONZI SCHEMES The allure of easy money can be a tempting trap, especially in the world of real estate investing in Nepal. Scam #4, investment schemes and Ponzi schemes, prey on unsuspecting investors who are eager to rake in big returns with minimal effort. These fraudulent schemes promise unusually high returns, guaranteed investment returns, or “can’t-miss” opportunities, all with the goal of parting you from your hard-earned money. A typical investment scam might involve a smooth-talking promoter who convinces you to invest in a seemingly legitimate real estate project. They’ll show you impressive brochures, well-designed websites, and even fake testimonials from “happy investors.” You’re promised high returns with little risk, and perhaps even told that you’re one of the few chosen ones to benefit from this exclusive opportunity. But once you hand over your money, it disappears into a black hole, along with the scammer. Ponzi schemes, on the other hand, rely on a constant influx of new investors to pay returns to earlier investors. The scheme works well initially, with early investors receiving their promised returns, often convincing them to invest even more money and to recruit friends and family into the scheme. But eventually, the house of cards collapses when new investments dry up, and the scammer absconds with everyone’s money. It’s crucial to be wary of any investment opportunity that seems too good to be true, and to thoroughly research any real estate investment before committing your money. Remember, if it sounds too good to be true, it probably is. 9. HOW TO IDENTIFY AND AVOID INVESTMENT SCAMS When it comes to identifying and avoiding real estate investment scams, knowledge and vigilance are your best allies. Here are some tips to help you spot and steer clear of these fraudulent schemes: * a. Do your due diligence: Thoroughly research any investment opportunity, including the company, the individuals involved, and the project itself. Look for reviews, complaints, and any red flags that might indicate a scam. * b. Verify credentials: Ensure that the promoters and companies involved are licensed and registered with the appropriate regulatory bodies in Nepal. * c. Be skeptical of high returns: If an investment promises unusually high or guaranteed returns, it’s likely too good to be true. Real estate investments, like any other investments, come with risks, and no legitimate investment can guarantee high returns with no risk. * d. Watch out for pressure tactics: Scammers often use high-pressure sales tactics to get you to invest quickly without doing your research. Don’t fall for these tactics – take your time to make an informed decision. * e. Consult with professionals: Seek advice from trusted financial advisors, lawyers, or real estate professionals before making any investment. * f. Use secure payment methods: Avoid paying with cash or wire transfers, as these are difficult to trace and recover if you’ve been scammed. Instead, use secure payment methods such as credit cards or bank transfers. By staying informed and cautious, you can protect yourself from falling victim to real estate investment scams and make sound investment decisions that will help you achieve your financial goals. 10. SCAM #5: TITLE FRAUD AND DEED SCAMS Title fraud and deed scams are some of the most alarming types of real estate fraud, as they can result in the loss of your property without you even knowing it. In these scams, fraudsters steal your identity or forge documents to transfer ownership of your property to themselves or a third party. They might use these stolen identities to take out loans against your property or even sell it without your knowledge. One common method used by scammers is to identify properties that are free of mortgages or liens, as these are easier to transfer without detection. They’ll then forge documents, such as a deed or power of attorney, and file them with the local land registry office, effectively transferring ownership of the property to themselves. Once they have control of the property, they can take out loans, sell the property, or rent it out, all while leaving you to deal with the consequences. It can be incredibly difficult to undo the damage caused by title fraud and deed scams, which is why it’s essential to take steps to protect yourself and your property. By staying vigilant and proactive, you can reduce the risk of falling victim to these devastating scams. 11. PROTECTING YOUR PROPERTY FROM TITLE FRAUD To protect your property from title fraud and deed scams, it’s essential to take proactive measures. Here are some tips to help safeguard your property: * a. Monitor your property: Regularly check your property records at the local land registry office to ensure that no unauthorized changes have been made to your property’s title or ownership. * b. Secure your personal information: Protect your personal information, such as your Social Security number, passport, and other identification documents, to prevent identity theft. * c. Use a title protection service: Consider using a title protection service that monitors your property’s title for any unauthorized changes or activity. * d. Be cautious with power of attorney: Only grant power of attorney to trusted individuals, and be specific about the powers you are granting. * e. Keep an eye on your mail: Be alert for any suspicious mail, such as bills or notices for loans or services you didn’t apply for. * f. Report suspicious activity: If you suspect that your property’s title has been tampered with or that you’ve been a victim of title fraud, report it to the authorities immediately. By taking these steps, you can help protect your property from title fraud and deed scams, ensuring that your investment remains secure. 12. CONCLUSION AND FINAL TIPS FOR STAYING SAFE In conclusion, real estate scams are a serious threat to buyers, sellers, and investors in Nepal. By staying informed about the common types of scams and taking proactive measures to protect yourself, you can significantly reduce the risk of falling victim to these fraudulent schemes. Here are some final tips to help you stay safe: * a. Always verify the credentials of real estate agents, brokers, and investment promoters. * b. Do your due diligence and research any property or investment opportunity thoroughly. * c. Be cautious of deals that seem too good to be true or require upfront payments. * d. Protect your personal information and monitor your property records regularly. * e. Seek advice from trusted professionals and consult with them before making any significant real estate decisions. By following these tips and remaining vigilant, you can navigate the real estate market in Nepal with confidence and protect yourself from scams. Remember, knowledge is your best defense against fraud, so stay informed and stay safe.
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Things to Ask your Real Estate Agent
Good communication with your real estate agents helps you to establish specific details about the type of property you are looking for and to truly understand the process. For good communication to flow you need to talk through every side of a question or consideration with your real estate agent. Miscommunication often leads to a bad relationship between client and agent, which is why there are sets of questions that you can ask your real estate agent when buying or looking for a house/property. Starting with the first and basic question, Q.1 What area do you primarily do business in? ● This is the first question you as a client should first ask because it might get lost in the shuffle of other secondary questions. There are two parts to this query; one that your agent will know the area you’re interested in and two- your agent would also want to confirm they want to spend time researching your preferred neighborhood.This question reassures you that your agent is familiar with the area and you’ll also get to know his/her knowledge in the target market. Q. 2 How long have you been in business? ● You need to make sure that your agent is capable and has some experience. He/she doesn’t need 10 or 20years of experience but you don’t want to be their first transaction either. You as a client can’t teach experience so first and foremost, make sure your agent has been around the block a few times! Q. 3 Why did you get into real estate? ● You need to understand how and why they work the way they do because you will spend a lot of time together when you’re on the search or property so this question will uncover your relator’s motivation to get up every day and serve you as a client. Most agent-client communication breakdown over time due to lack of communication and hence questions like these bring the opportunity to empathize with each other.Also, when it comes to negotiations, showings, or communication in general, you need to understand where your agent is coming from and why they choose to become one. Q.4 How many clients do you have? ● You want your agent to have enough time to dedicate to you and your search, but at the same time, you also want to make sure that you are not the only client your agent has. Why not??? Well, what happens is when the deal gets sideways which happens in many cases and transactions, and when you’re thinking about backing out, you wouldn’t want to make the situation difficult for your agent or you. At the end of the day, agents also have to put food on the table and that’ll be difficult for the client as well. ● But in another scenario, what if your real agent has 50 clients? Well, that is not a bad thing. It probably means that the agent is successful and has efficient systems and transactions but always prefers your agent who has few clients that only you as their client. Q.5 Who will be working with you or your team? ● Nowadays, the team model is very popular. The team model has a showing agent, an administrator- who handles all the paperwork, and there’s the lead buyer’s agent who oversees everything and helps you negotiate at the end. So be sure you know what type of relationship you are signing up for. Q. 6 What sets you apart from the other real- estate agents? ● It is very difficult to see the difference between two real estate agents and it is also very difficult to see the value that a real estate agent brings to the table. Ask your agent, What they do differently or what sets them apart from many other real estate agents. They should be prepared to give you an immediate answer. Your agent should have the best answers to tell you how they are different. Q. 7 How do your fees work? ● Most of the time the fee that you pay your buyer’s agent is already figured into the sales price and has already been set by the seller which means there’s no extra out-of-pocket expense on your end as a buyer.Sometimes though buyer’s agents will have administrative fees also known as desk fees that your buyer’s agent will charge and pass down to you at the closing of the transactions or the deal. In the case of Nepal, for more authenticity and genuinity in the real estate agent’s rate, it is suggested to work with agents who are registered real estate agents in Nepal. The Government of Nepal provides certifications to licensed real estate agents, and you will be 100% secure while working with them. Q. 8 After hearing my needs, what do you think is the best strategy moving forward? ● After you have an in-depth conversation with your agent they should have a clear picture or the best idea to proceed or to find the type of property you prefer at the best rates. Always look for more than an automated search. See how creative and efficient your agent is, the things to look for are; 1. Recommendation to go for an open house 2. Recommendation to send out a direct mail 3. Or just to go and check the house via door knocking But all in all, after a deep conversation you should seek a plan from your agent in moving forward. Q. 9 How will we communicate? ● In everything we do, communication is the key so whether you are buying a house or selling one, it is very much necessary to also have clear communication on what medium you and the agent will be using. Some prefer emails, some phone calls, so don’t forget to ask for their preferences of medium for you to contact each other efficiently. By doing this not only you will avoid miscommunication but it will also be best for everyone’s expectations to be met. Q. 10 And lastly before you hire an agent, don’t forget to ask, “ What questions do you have for me?” ● Your agent should also be making sets of questions like;1. How long have you been looking for a house or property?2. Have you seen anything you like?3. Have you written any offers on the property?4. What is the budget? Preferences? And so on.If your agent doesn’t bombard you with any question it means they’re not prepared and seem unprofessional.Any question is better than no question to not sound ignorant and shows that they care for the clientele.Remember you don’t want a passive agent, you want a proactive agent who is genuinely interested to help you find the house of your dreams or close to your preference at least!
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Qualifying For Home Loans In Nepal
Are you wondering how to qualify for home loans in Nepal? Well, you have landed on the right page where we have answered some of the frequently asked questions regarding qualifying for home loans. Pre-approval eligibility, qualifying for home loan calculators, required documents you’ll need, average loan rates etc and much more information regarding home loans are here below. First, the eligibility criteria for qualifying home loans; ● You must be at least 21years and should not exceed 60 years at the time of maturity. And the retirement age must be more than the tenure of the loan. ● The home loan is provided to any individual who has a regular, adequate, and stable source of income. Some financial centers such as banks also give home loans to salaried and self-employed individuals. ● The home loan in Nepal is only provided to Nepalese Citizens. ● You should always look out for home loans for property within the municipal area. Many financial centers are hesitant to finance house/land which does not lie in a municipal area. However, urban VDC is considered with proper justification. ● The land or house to be constructed/purchased/renovated/extended/modified should have motorable road (8 feet wide in minimum) access. Such roads should be seen in the blueprint or be verified by concerned authorities (e.g. ward office). ● Your Work experience is needed for salaried and self-employed individuals. ● In the case of business income, the financial statement of the company should be audited. ● You must have a Permanent Account Number ( PAN ) for a loan above 50 Lakhs. ● You should be able to provide fixed asset collateral as primary security. Second, what are the required documents for qualifying home loans? 1. For identification: ● Two passport size photo of applicant/co-applicant ● Photocopy of citizenship certificate and passports of the applicants ● Photocopy of Tax/PAN/VAT certificate along with registration certificate 2. For proof of income: ● Original Salary certificate ● Photocopy of Tax/PAN/VAT certificate ● Original salary certificate which needs to be recent- not more than ten days old. ● Photocopy of contract agreement ● Photocopy of rent contract (optional) ● Original bank statements of the past three months (optional) ● Photocopy of financial statements (Past three years) if you are self-employed. 3. Other documents required for qualifying home loans are; 1. Photocopy of pension book/ID stating the name of the pensioner, amount, and validity period. 2. Photocopy of rent contract if you have any 3. Original bank statement of the past six months 4. An original letter stating coheir of the seller from the local authority- ward 5. An original quotation of housing company 6. Photocopy of blueprint also known as Napi Naksha 7. Photocopy of Certificate of construction from Municipality/VDC in case of purchasing already built house (Nirman Sampanna Pramanpatra) 8. Original Private Sale Agreement in case of Private Sales 9. Photocopy of Memorandum and Articles of Association 10. Photocopy of Detailed break down of cost estimation from the applicant’s consultant 11. Photocopy of Land ownership certificate (Lalpurja) 12. Photocopy of Latest land revenue receipt (Malpot Receipt) 13. Photocopy of Blue Print of building approved from Municipality/VDC (Naksha Pass) 14. Photocopy of Land Transfer Deed (Rajinama) 15. Original Four Boundary Disclosure (Char Killa Pramanit) 16. Approval letter of the municipality for the construction of the house (Ghar Nirman Izazat Patra) 17. Approval letter of the municipality for extension and renovation/modification (if needed) of house For salaried applicants, the corporate guarantee should be supported by the resolution of the Board of Directors. Original certificates should be presented for verification while submitting this form. The salary certificate must be on the office’s letterhead having a seal and must contain the net salary, designation, years of service, date of retirement or expiry of a contract, and type of employment (permanent or contract). It should be signed along with the name and designation of the signatory. The bank can demand any additional documents at its discretion. Different financial centers such as banks, cooperatives have different loan schemes and that is why it is advised to study loan schemes of your preferred financial centers before processing home loans. Some banks and cooperatives even have a home loan calculator on their website for you to check your eligibility for a qualifying home loan.And for average loan rates, as per Nepal Rastra Bank data, during the one-year period from mid-April 2019 to mid-April 2020, the average interbank lending rate fluctuated from 5.28 to 2.13 percent. Most financial centers easily finance your home loans for these purposes along with their respective loan rates; 1. For construction & purchase of house/flat 2. Repairs / renovation / Modifications to the house/flat 3. Purchase of land to construct houses/buildings for residential purposes. But, What will increase your chance of qualifying for home loans? Well, fret not! You just need to assure your preferred bank of two things: ● That you can legally pay the loan back, which means you should have a valid and adequate income stream. ● If you or the guarantor or can’t pay the loan back in time, the bank will acquire the asset and sell it. Because home loans can be risky, the financial centers take extra attention while assessing your home loan plans. All in all, you need to assure your financial center that you will be utilizing the money to buy the property or real estate and nothing beyond that. How much will the bank cover for your purchase and what is the tenure of home loan in Nepal? The loan percentage depends on the bank you chose, so contact your preferred banks and inquire about their loan percentage. Some will cover 80% and some could only cover just 20%. As for the current. The tenure of home loan again depends on your preferred financial centres. But most of the financial centres provide home loan tenure within the range of 15-20 years and some even up to 50 years. As for the loan limit scenario in Nepal, the minimum loan limit for home loans is Rs. 0.50 Million (5 Lacs) and for purchase of land alone- Maximum Rs. 3.0 Mil. (30 Lacs), but this also depends on different financial centers and their home loan plans/schemes. For example, Standard Chartered Bank of Nepal has a minimum 50% equity contribution with a maximum tenor of 18 years and a maximum loan amount up to NPR 35.00 million. Similarly, Everest Bank has a residential housing Loan up to Rs. 1.50 crore with a margin of a minimum of 10% (in case of construction) however, the total margin including the cost of land/existing building is less than 25%. And minimum 25% of bank value in case of outright purchase of house/flat of the tentative Bank Value and minimum 40% of bank value in case of Land purchase. They have residential housing loans for more than 1.50 crore There are plenty of options for home loan applicants. With the rise of interest in real estate in Nepal, many financial centers are being more involved in the business. Almost every major bank in Nepal has a ‘home loan,’ or mortgage loan service and they have been proven to be of huge assistance to people.
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Real Estate Laws in Nepal
Real estate laws in Nepal are governed and impacted by the state. The history of real estate laws in Nepal goes back to the comprehensive peace accord (CPA) of Nepal. On 21 November 2006 landowning was included in the 3rd section of CPA that aimed conflict management and political, social and economic transformation, discouragement of absentee land ownership, land pooling, and utilization of land use policy for uplifting agricultural production. There are particularly two articles mentioned in the interim constitution of Nepal that focuses on land reform. First, Article 3.7 which is provided for a policy to introduce scientific land reform by ending feudal land ownership, and second, Article 3.10 says to provide land and other economic resources to the landless and land-poor. In retrospect, the 2017 election’s manifesto of three major political parties proclaimed to resolve all land-related issues through scientific land reform. The following are some of the key legislation governing real estate laws in Nepal: a) Ownership and possession of property law: Ownership and possession of property law in real estate deal with the ownership and possessory right of the property. It deals with the acquisition, competency, and repeal of such rights over the property to avoid the dispute related to the rights of owners and possessors. This law is backed by the compensation and resolve to handle the matter of ownership and possession of the property. b) Transfer and acquisition of property: The provisions under the property law have provided the explicit right for the transfer of personal property whereas the joint property or property in common cannot be transferred without obtaining the consent of all who inherits such property. The possible remedies have been provided so that the transfer of property without violating the rights of the person. c) Government, Public, and Community property: The property law also exists to the government, public, and community property. It is strictly restricted to transfer the government, public, and community property in the individual’s name which is the key factor that needs to be taken into consideration while dealing with such matters. d) Trusts: Trust property refers to assets that have been placed into a fiduciary relationship between a trustor and trustee for a designated beneficiary. Trust property may include any type of asset, including cash, securities, real estate, or life insurance policies. Trust property is also referred to as 'trust assets' or 'trust corpus.' In Nepal, the concept of Guthi has been practiced from time immemorial and the procedures related to its registration are well provided in the provisions of law. The trusts are established in Nepal mainly for the protection of cultural heritage and social welfare programs. e) Registration of deeds: Why is it important to have a properly recorded deed? Once you sign your deed, your property is considered transferred from the seller to the buyer. However, for you to be covered to protect yourself from future claims on the title, you should record the deed. The procedures of registering the deeds and their time of validation have been provided to secure the proprietary rights of people. Furthermore, due to the high boom in the real estate scenario of Nepal and the upsurge in the loan, Nepal Rastra Bank (NRB) had issued some regulatory directives to banks and financial institutions to limit the loan flow in real estate. The Monetary Policy of 2010/11 is one of them, it has provided some guidelines for real estate financing. Paragraph 59 of the policy urges banks and financial institutions to curb down the real estate and housing loan to a specified limit. This is to reduce the risk associated with the high concentration of loans in a single sector. Similarly, paragraph 98 of the policy has reduced the limit in housing and residential lending. It has also restricted lending to the 10 percent limit in land purchase and plotting (NRB, 2010). Also, According to The Lands Act, 2021(1964), these are additional laws and regulations related to the process of buying and selling property in the context of Nepal, formulated by the Nepal Law Commission. 1. Sale and disposal of Land: ● The prescribed authority shall sell or dispose of, as prescribed, the land acquired or confiscated under this Act to a local person of that Village Development Committee or Municipality from which that land has been acquired or confiscated. In making such a sale or disposal, priority shall be given to the freed bonded labor, downtrodden (Dalit), indigenous, and nationalities (janajati), out of the local landless people. ● The land obtained on such sale and disposal shall be registered in the name of such person, as the landowner thereof. ● The prescribed authority may give the land according to Sub-section (1) to the former landowner, tenant, or any other person until the sale or disposal of the land for tilling under any terms and conditions. 2. To maintain registration book of lands: ● “ The prescribed authority shall register in the registration book, as prescribed, the land sold or disposed of under Section 2137…………… and then forward a copy thereof to the Land Revenue Office or the Land Administration Office, in the case of a District where the Land Revenue Office does not exist; and the Land Revenue Office or the Land Administration Office shall make the transmission of the land accordingly.” 3. To receive the value of land: ● A person who obtains a land on the sale and disposal thereof under Section 21 shall pay the value of that land in such sum as to be set at the prescribed rate of that land in cash in a lump sum as prescribed or in installments in such times as prescribed from time to time. Interest on the sum of value at the rate of five percent per annum38 for the period of payment shall also be charged on and collected from a person who makes payment in installments. Provided that, if a person desires to pay the whole amount payable by that person or one or more installments or any portion thereof at some time in advance of the time limit prescribed for making payment of installment, that person may make such payment. ● “The prescribed authority shall get the amounts to be collected under Sub-section (1) deposited, as prescribed, in a separate account opened at a ……………..39 bank.” ● If a person fails to make payment of any amount of installment payable under Sub-section (1) within the time limit but appears to make payment thereof no later than one month after the expiry of the time limit, the prescribed authority shall receive the amount of installment, by imposing a fine in a sum to be set by Ten percent of the amount of installment. ● If a person fails to make payment of any amount of installment payable under Sub-section (1) even within one month after the expiry of the time limit, the concerned land as well as the amount of installment, if any, already paid for the value of that land shall be confiscated, by order of the prescribed authority. 4. Formation of house and land valuation committee: ● The Government of Nepal may, for purposes of the Act, form a house and land valuation committee (hereinafter referred to as the “committee”) comprising governmental and non-governmental members by a notification published in the Nepal Gazette from time to time for each urban area specified under the Act. ● The committee formed under sub-rule (1) shall comprise of at least one governmental or non-governmental engineer or overseer. ● After any committee formed under sub-rule (1) has completed its functions under these Rules, the Government of Nepal shall, by a notification published in the Nepal Gazette, dissolve that committee. 5. Prohibition on sale and disposal of land: No person who obtains a land on the sale and disposal thereof under Section 21 shall sell and disposes of, or otherwise convey the title to, that land to anyone else or partition it and mortgage it to or furnish it as security with anyone except a bank until the amount of value payable under Section 22 is paid in full or until the elapse of ten years after the date on which the person is entitled to hold that land, whichever occurs later. 6. Punishment: ● If one obtains a land by producing a false statement at the time of sale and disposal of the land according to Section 21, the land shall be confiscated by order of the prescribed authority. ● If a person who obtains a land on the sale and disposal of the land according to Section 21 sells or disposes of the land or conveys the title thereto or partition it or hypothecates or mortgages the land or crop yield thereof in contravention of any matter contained in Section 23, ● such transactions shall be void and the concerned land, as well as the amount incurred by the purchaser of the land, shall also be confiscated by order of the prescribed authority. 7. Confiscation of land obtained by producing false statement or in contravention of Rules: ● If Government of Nepal believes that any person has obtained any land that has been confiscated or devolved on Government of Nepal under this Act, by producing a false statement or by way of sale and disposal in contravention of the Rules framed under this Act, Government of Nepal may cause any officer to hold necessary inquiries into such land. ● If it is found after the inquiries held under Sub-section (1) that any person obtained the land by making a false statement or by way of sale and disposal in contravention of the Rules framed under this Act, the Government of Nepal may confiscate such land and re-sell and redispose of the same, as prescribed. Real estate laws protect buyers from unscrupulous sellers who might attempt to misrepresent the property to a potential buyer and it could also protect the environment from a buyer who wants to make alterations that are damaging to the land or natural environment. We suggest you research and dig deeper before buying and selling property!
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Housing Trend 2024
The COVID-19 pandemic impacted the real-estate arena with a massive exodus. We see too many “to-let” signs with a vast number of tenants vacating out. The uncertainty looms around and because the country's economy is on back gear, people are hesitant to start new businesses or buy/ sell property! However, during the year, 2020, definitely did come up with challenges but the time spent inside during the strict lockdowns across the country probably caused many people to rethink how they live. That is why many people see a unique opportunity in the housing market. Rather than acquiring a new personal residence, they are looking to buy property to rent out. Nevertheless, let’s look at the current housing market trends: 1. Fixed Interest Rates The Nepal Rastra Bank has directed the banks and financial institutions (BFIs) to maintain fixed interest rates for the loans that have at least one year or more repayment period. This provision applies to all individual loans, including home loan/housing loan, auto/vehicle loan, and hire purchase loan, given with more than a year’s repayment period, that have monthly or other periodic repay provisions. The BFI's of all classes, commercial banks, development banks, and finance companies should now change the term of references of the individual loan dispensed with monthly/tri-monthly/periodic repayment options to implement stable interest rate at the request of the customers. 2. The arrival of the Initial Environment Examination (IEE) and Environmental Impact Assessment (EIA) The central bank has further clarified its provision regarding Initial Environment Examination (IEE) and Environmental Impact Assessment (EIA) while lending to the projects and industries. While lending to the projects and industries, the BFIs must ensure that the former has obtained the approval of IEE and EIA reports of the respective projects from the respective agencies. In the case of projects that do not need IEE or EIA, the banks must analyze them by themselves. 3. Loan-to-value ratio lowered in the Capital-Kathmandu The NRB has raised the ceiling for a home loan to Rs15 million from the existing Rs10 million. The NRB has defined home loans as credit extended by banks and financial institutions for the purchase of a house or an apartment for residential purposes or to rent it out. Such credit should be extended based on the income source of the borrower. The NRB’s latest directive has also revised the loan-to-value ratio for credit sought to purchase real estate in the Valley to 40 percent. The loan-to-value ratio for credit sought to purchase real estate outside of the Valley has remained unchanged at 50 percent. This was done by the NRB to discourage the expansion of real estate and housing businesses in the Kathmandu Valley only and to enable the sector to grow in other parts of the country. 4. Potentially Buying at the High There are, of course, risks to consider in this real estate market. We are seeing significant numbers of people moving out of cities and into the suburbs or smaller urban areas. As a result, certain property markets are at all-time highs. The rental price has gone down but there have been no discrepancies when it comes to prices of land or buildings that have been put on sale. 5. Real estate sales go down According to the Land Revenue Office (LRO), other businesses have started returning to normal since June,real estate business has declined by more than one-third, The real estate turnover in Kathmandu declined by 35 percent in June as compared to the turnover in February. As per the Land Revenue Office, there were transactions of 1,234 units of houses and land in January and 1,269 units of houses and land in February. However, only 861 transactions in June! Times are challenging for the real estate scenario in Nepal. But these are all the trends you need to look out for in this current time of crisis. Take Control of the Trends With a Top-Notch Real Estate Agent Whether you are selling or buying, you can take advantage of the current trends by partnering with a professional real estate agent. Our team will match you with agents we recommend in your area.
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Owning a Property in 2024
Owning a property comes with many responsibilities and taxation is one among them. Your property could be your land, an office, shop, building, house, etc. If we look into the History of property taxation in Nepal, the first elected government introduced this tax under the finance act 1959. It was implemented under the property tax act in 1960. Due to ineffectiveness in collecting revenue. It was replaced by an urban house and land tax later. Urban house and land tax were introduced in 1962 for collecting Revenue from the urban house and land property. Initially, Bhaktapur, Biratnagar, Birgunj, Nepalgunj, Rajbiraj, Janakpur, and Butwal in 1963/64 and Bhairawa, Pokhara, Palpa and Hetauda in 1973/74. However, it was been again replaced by an urban house and land tax in 1995/96 Tax is classified into two groups i.e direct and indirect tax. Property tax falls under the category of direct tax in which tax is collected by the nation from the concerned individual. According to the data of Land Tax Rules, 2020 published by the law commission of the government of Nepal, there are the following processes in the tax implementation; First, the committee does the valuation of house and land of the urban area by inspecting various places and on the basis of the principles set down by the government of Nepal and submit it to the Government of Nepal, Ministry of Finance through the Department of Tax. The valuation is based on the area your property is rural or urban, and the facility accessible and available such as electricity, the distance between school, banks, and other daily basis services. After the valuation, the taxpayer consults with a tax officer who evaluates and assesses the figure of the tax as per that valuation. The Tax assessment order has to indicate a brief description of how the tax has been assessed. In evaluating the house and land of any person under Section 7 of the Act and assessing the house and land tax thereon, the Tax Officer has to take into consideration the following matters: (a) The secret report, if any, made by the tax inspector or anyone else, (b) Survey maps or deed of public inquiry of such house and land received from the tax inspector or anyone else, (c) Any other such basis as may be considered appropriate by the Tax Officer In case, where the Tax Officer has imposed a penalty and fine on any person under the Act, he/she has to give a time-limit of Thirty-Five days to recover the amount of penalty and fine from such person; and in cases where no receipt of payment of the amount is not received even within that time-limit, the Revenue Office or the authority prescribed by Government of Nepal shall upon a notice given by the Tax Officer recover such amount by confiscating, if necessary, the property of such taxpayer in accordance with the procedures mentioned in the prevailing Nepal law In a nutshell, when the urban house and land tax is levied on the value of the property, depreciation is also taken into account, at rates ranging from 0.05% to 1.50% per year, depending on the type of construction of the house. According to the fiscal bill 2077/78, you have to pay 0.01 percent tax on a house or land or any other property worth Rs. 1 crore. The tax is paid to the metropolis. For metropolises, the property tax is one of the most reliable sources. Similarly, if you have property worth more than Rs. 10 crores, you have to pay tax 0.60% of the value. Due to the COVID-19 pandemic, a 10 percent exemption in property tax has been decided by the government and the tax will have to file by the end of push month 2077. The exemption is valid until COVID-19 crisis settles and will no longer be available after the solution of the crisis is found in the foreseeable future.
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Step By Step Introduction To House Buying Process
Are you looking for the right house but confused where to begin? Well, don’t worry, this blog will step-by-step guide you to the basics of buying a house. The first step is to do the research. Anything you do, research is the quintessential aspect of your life. In the case of buying houses, the research includes finding out an available property, listing them, and seeking professional help from real estate agents who will review potential buyers and help you set up a meeting with the sellers. The second step is finding and hiring the right and knowledgeable real estate agents and Vastu professionals who can understand your preferences and help you give expert advice and verification. It is always a great idea to rely on real estate agents for hassle-free house buying. And if you are a firm believer in Vastu, seek help from Vastu professional After choosing professional agents, the next step is to have proper knowledge and ideas about where to find a property. The location of your preference for the house is very important as with location comes the facilities and the neighborhood. Facilities include services of necessities like 1. Drinking water, 2. The sewage system, 3. Hospitals, 4. Schools, 5. Parks and markets. The location should make your life convenient so it is more than necessary to buy a house favorable for you. Next comes the step of knowing the house you are about to buy. The history of the house is a prior-information to get from the seller before finalizing the deal. It is directly related to the rentability and re-sellability in the future. In Nepal, according to the latest household survey by the Central Bureau of Statistics, urban households spend about 45 percent of their income (Rs 431,337) on foodstuff and 18.7 percent on rent alone. The survey, however, does not include questions related to a family’s monthly installment for buying a house or a flat. So, proper interrogation about the age of the house and foundational elements like pillars should be done. This will open the door for the tenants which can help you to earn extra. Information about these will help you to add revenue purposes in the future. Transparent communication with the parties involved is another important step while buying a house. Of Course, you will be meeting many people, many referrals, and in all this, two-way communication is the key. For clear-cut information with the sellers, your agent, and other involved parties, open communication is a must for avoiding disputes, money laundering, or any sorts of confusion/ misunderstanding.
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Step By Step on Introduction To House Selling Process
The House selling process is as intricate as buying one, therefore it is more than necessary to take some time, do proper research, and go through all the processes without the rush. For selling the house for the maximum profit within reasonable time research is the first and foremost criterion. If you encountered this blog while researching then you are already on the right page. Here are step by step introduction to the house selling process in Nepal. ●Find the right agent with right listings Agents can be of many types, your friends, families, colleagues anyone whom you are asking to spread the word for selling your house but for professional help, you need to find a real estate agent who will list down and review potential buyers and help you set up a meeting. This is an important step because finding the right agent boils down to make the other following steps easier. ● Choose a competitive listing price The real estate agent you hired will be responsible for conducting market analysis to recommend the best possible price for your house which will help you to sell it within a reasonable amount of time. ● Preparing the house for buyer inquiries Again, the real estate agent you hired will do the job of explaining your house’s estimated costs to the interested buyers and if you haven’t hired one then prepare yourself and your house to tend to potential buyer’s queries, and showcase the house. ● Marketing plan In a world where everything is online these days, why should selling the house follow the traditional method right? So, consult your real estate agent first, utilize an online platform, and figure out how to advertise your horse for sale. Post pictures of every nook and cranny of your house so that interested buyers can go through a virtual tour before meeting up. Remember descriptions of your house play an equally major role as the photographs of your house so formulate well-descriptive, authentic information of your house when you put up your house for advertising. ● Prepare yourself for negotiation Once your house is in the interested buyer's eye, be ready for receiving multiple offers. Always consult with a real estate agent and make a plan to deal with counter offers while negotiating. A counteroffer in simple terms is the seller accepting the buyer's offer to one or more changes. The changes usually include sales price, earnest money deposit, asset buying along with the house, and closing date, etc. Working with your real agent is best while negotiating and accepting the best possible counteroffer. ● Be prepared for the escrow period The escrow period is when the buyer and seller await or decide on the closing and move-out date after reaching a purchase agreement. You will decide on an escrow period when you finalize your deal with the buyer. ● Schedule an Appraisal An appraisal contingency needs to be prepared and along with that preparation, your house also needs to be prepared before the Appraiser comes. Discuss with the real estate agent properly about receiving appraisal because sometimes a buyer can decide to cancel the deal/contract so a contingency appraisal needs to be prepared. ● Deliver seller disclosures Any problems with your house should be disclosed upfront. This creates transparency and an honest business relationship between you and the buyer of your house. To deliver any disclosures that your buyer needs to know about the house you are selling. ● Attend to the inspections of the buyer After the purchase agreement, it is more than necessary to attain the property inspections which helps buyers to confirm that they are indeed purchasing the house that is truly in the condition for which it appears. Once the inspection is done and the buyer is happy with the house he/she is about to buy, you move onto the next step and that is closure. ● Closing the deal After the end of the escrow period, a lot of paperwork takes place. For the documentation and paperwork, your real estate agent will help you. The necessary documents according to the Government of Nepal, Department of Land Management and Archive, are divided into three sections; 1.First for the Deed Registration (Likahat) Process A. Submit an application form in LRO with following minimum supporting documents: a. Existing Land Ownership Certificate, b. Land Tax Receipt for last fiscal year/current month from VDC/municipality, c. Recommendation letter about Building and Road access from local bodies, d. Copy of Citizenship certificate of both buyer and seller, e. Recommendation letter from Guthi (trust) office if the land is under Guthi, f. Two copies of photographs. B. LRO verifies all documents, Signature and thumb impression with the official record, called 'Moth Shresta', C. Send the request to the Survey Office for parcel splitting if required, D. Calculate of Revenue and Capital Gain Tax(CGT) if more than 30 lakhs, E. Calculate discount, if any applicable, F. Deposit of deed registration fee, CGT (if applicable) by Applicant, G. Registration section attach the receipt with the application, H. Verify and approve the deed registration by an authorized land officer, I. Moth section updates the record and issues a printed land ownership certificate or handwritten land owner certificate, where DLIS is not implemented to the landowner, J. Send the Record (Misil) in the Archival Section (Tameli) for record reference. 2. Second for the Namsari process A. Submit an application form in an LRO with following minimum supporting documents: a. Land ownership certificate of the dead person, b. Land revenue clearance receipt, c. Copy of Citizenship certificate, i. Birth certificate and parent’s citizenship certificate in case of a child. d. Relationship certificate with the dead person by local bodies,e. Death certificate, i. Migration certificate if migrated, ii. In the case of a missing person and second marriage (for women only) recommendation should be submitted. f. Photographs. B. LRO verifies all documents, Signature and thumb impression with the official record, called 'Moth Shresta', C. Calculation of fee if applicable. If Namsari after 35 days of the death, a certain fee (fine) is applicable, D. Verify and approve the Namsari by an authorized land officer, E. File sent to Moth section for ownership record update, F. Moth section updates the old record and issues a newly printed land ownership certificate or handwritten land owner certificate, where DLIS is not implemented to the new landowner, G. Send the Record (Misil) in the Archival Section (Tameli) for record reference. And finally for the process of Dakhil Khariz (Da.Kha.) A. Submit an application form in an LRO with following minimum supporting documents: a. Land revenue clearance receipt, b. Copy of Citizenship certificate, i. Birth certificate and parent’s citizenship certificate in case of a child. c. Related documents to Dakhil Khariz – the decision of court, auction, and the decision of other government agencies, d. Related other files, B. LRO verifies all documents, Signature and thumb impression with the official record, called 'Moth Shresta', C. Verify and approve the Da. Kha. by an authorized land officer, D. File sent to Moth section for ownership record update, E. Moth section updates the old record and issues a newly printed land ownership certificate or handwritten land owner certificate, where DLIS is not implemented to the new landowner, F. Send the Record (Misil) in the Archival Section (Tameli) for record reference. After all the documentation and accomplishment of these processes, your house will be officially sold.
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Post- Pandemic Safe Property Showing Guidelines
'New Normal' are the buzzwords as we cycle around the crisis of global pandemic. The education system, various businesses, government, media, everyone is renewing their modalities to sustain and continue their values. In all this why should real estate follow the pre-COVID patterns and processes and remain static? Various new guidelines have been developed for realtors to cope and pivot the strategies with the new normal. Here are important safety guidelines the stakeholders of real estate are advised to follow when showing the property or doing any real-estate related activities. First, let’s begin with do’s; 1. Update the information on your advertisements. Include all the precautions like wearing a mask and personal protective equipment (PPE) suits when setting an appointment and strict visiting hours for an open house. 2. Allow your agent to enter the property with only two guests or potential buyers 3. The conversation or meeting between you and the real agent or the possible buyers should only be done after disinfecting the property and prioritizing the supply of personal protective equipment (PPE). 4. Post a sign which is visible to the potential buyers about the hand wash/sanitizer, mask, and PPE suits (if available) before entering the property. 5. Require all guests to wear face masks and gloves while showing the property. 6. Plan a predefined route to follow while touring the property and keep distance allowing an ensure and safe interactions. 6 feet apart is the suggested distance between each individual. 7. Place hand sanitizers in strategic locations throughout the house and minimize the need to touch the surfaces. 8. Always record the information of the potential buyer and their property touring dates. 9. Look for alternative technology to meet with buyers and set up appointments. Many realtors are relying on virtual showings. Evidence has even shown that virtual showings are 2.4 times more likely to be completed than in-person showings. If you don’t already have technology that enables you to conduct your leasing flow remotely, consider implementing digital tools sooner rather than later. For the don'ts; 1. If you, the real estate agents or the potential buyer is having health issues and it is best suggested to not conduct any sort of meeting or appointments. 2. Do not let too many potential buyers enter the property at the same time or simultaneously. Always organize a separate schedule for different appointments or visiting hours. 3. Do not allow guests an extended time while touring the property, keep the appointments short and precise. These are some of the steps that can help reduce health risks and potential liability while property touring or showing to the clients and potential buyers. Currently, various kinds of gatherings are suggested to be limited so following above mentioned preventive measures can help to continue leverage business processes and adapt to new normal.
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Convert Your House Into Home With the Help of Vastu Shastra
Vastu Shastra has always helped people to balance the energy of their home. The energy flow in the house greatly affects you and your loved ones well being. Vastu Shastra helps you to balance positive energy flow with the intricate construction or positioning of assets. Keeping the importance of VastuShastra in mind, here are a few tips to look for while constructing your house or for moving into the already built one. 1. The Entrance According to Vastu Shastra, the main entrance of your house should face the north, east, or in the north-east direction. The main door to your home should be constructed with superior quality wood. Its hould tower above the other doors in your house, and look the most appealing. ● Avoid placing a fountain, or any other decorative water-centric element, outside the main door. ● Avoid placing a shoe rack or dustbin outside the main door. ● There shouldn’t be a bathroom near the main door. ● Ensure the main entrance is well lit. ● Avoid painting the main door black. ● Decorate your door with beautiful nameplates and auspicious to rans. ● Avoid placing animal statues or figurines near the main door. ● Ensure your main door opens in a clockwise manner. ● Avoid houses with the main door located on the side of the structure. The front door is the main mouth of life-nurturing chi (energy). It is best if the mouth is easy for energy to find. A house with a door on the side is like a face without a mouth. Look for all these attributes while buying the house or give the makeover to your house if you have recently bought one. 2. Kitchen in the southeast According to Vastu Shastra, the Lord of Fire—Agni—prevails in the southeast direction of the home, which means that the ideal placement of the kitchen is the southeast direction of your home. If for any reason,you are unable to do so, the north-west direction will work. 3. Living Room Preferences The living room should face east, north, or north-east. Alternatively, a north-west-facing living room is also favorable. Heavy furniture is suggested in the west or south-west direction of the living room. All electronics and appliances should be installed in the south-east section of the living room. If there is a mirror in the room, ensure it is placed on the north wall. 4. Balance for the Bedroom Vastu Shastra says that a bedroom in the right place can enhance positive energy and even improve relations between couples. Ideally, the bedroom in a south-west direction brings good health and prosperity. Avoid a bedroom in the north-east or south-east zone of the house as the former may cause health issues, while a bedroom placed in the latter direction may cause quarrels among couples. The bed should be placed in the southwest corner of the bedroom, with your head facing west. Avoid placing a mirror or television in front of the bed. Your reflection must not be seen in a mirror when in bed as it causes fights and other domestic disruptions.Paint your bedroom walls in neutral or earthy shades as it radiates positive energy. Avoid painting your walls black. Avoid having a temple, paintings depicting water, or a fountain in the bedroom as it could cause emotional outbursts. Use mood lighting and burn aromatic oils to create an oasis of calm. 5. Look for Garage facing the street If you are looking for a garage built into the house, a house with garage doors facing the side or rear of the house is preferable to garage doors facing the street. When garage doors are the main feature of the front of the house, occupants of the house find themselves on the go all the time. 6. Avoid houses that are mostly glass. It is difficult to place furniture in those houses so that people feel comfortable. People are most comfortable and empowered when they can sit or sleep in spaces where they have a solid wall behind them and a full view of the main door of the room. The above points can be kept in our mind while constructing a house or buying one. Energy has a lot to do with your healthy mind and body. Therefore Vastu shastra is very important to convert your house into your home.
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Cash Vs Finance
There has always been a debate over Cash offer versus Financing while closing a deal or a transaction in the process of home buying and selling. What to choose between these two processes has always been subjective and pertains to an individual's financial status. Here are basic differences between Cash v/s Financing for a clear cut choice one can make before involving yourself in the prowess of the real-estate arena. First, What is a Cash Offer? In simple language, by its name itself, a cash offer is the process where all the transactions and deals are made in cash between buyer and seller. It means no process of mortgage loans involved whatsoever from the beginning of the payment of deposits to the closing of the deal. A seller always expects to receive cash in exchange for his/her property from the prospect buyer rather than getting involved with financial contingencies or the mortgage loan process. Seller always hopes for a buyer who is financially capable or who has sufficient funds to buy the property because transactions done in all-cash negates delays related to any housing loan or any other finance fortuity. Transactions in cash offer the possibility of closing the deal quickly which is why many sellers even settle down the deal to cash offers lower than listing price. Because the contract binds both the parties- seller and buyer, it is always smart to decide and have a clear cut conversation about the transaction first, as one party cannot change the contract without either one’s consent. That’s why when the seller finds out that the buyer needs financing, sellers are most of the time not willing to change the terms of the contract. Sometimes what happens is when the buyer changes cash offer into mortgage contingency, the seller may refuse the whole offer and keep the buyer's deposit because of the breach of contract and move onto another buyer at a different, much higher price. This happens when buyers think that no one will notice the material change but due to digital and institutional sellers these days, the rules for transactions are transparent and rigid. In many cases, buyers have lost their deposit, payment for appraisals and inspection, and eventually lost the deal of property because they couldn’t agree to the seller’s preferred payment. What’s the next option then? The answer is Financing. On the one hand, a cash offer is only suitable to buyer’s with sufficient funds whereas, on the other hand, a buyer who cannot pay cash has several financing options such as; 1. Government loan 2. Conventional loan 3. Private money loan 4. And hard money loan ❏ Government-insured loans out of four options have significant limitations and rules. In the case of Nepal, Nepal Rastra Bank being the central bank of Nepal has a key role in the regulation of real-estate financing. These are the major directives issued by Nepal Rastra Bank in the real-estate sector; ● Loan against the collaterals of real estate or housing/land should not exceed 60% of the fair market value of the collateral ● No banks and financial institutions should exceed 25% and 40% of total loans on real estate and real estate and residential housing loans respectively ● The real estate loans and real estate and residential housing loans should be brought down to the following proportion of total loan within the stipulated time frame: Real Estate Loan: 15% by the end of FY 2068 and 10% by the end of FY 2069 Real Estate Loan and Residential Housing loan: 30% by the end of FY 2068 and 25% by the end of FY 2069 ● Borrowers can restructure/reschedule the real estate loan for up to one year if they have paid 25% of the principal and interest. • If the real estate/residential and housing loans are not brought within the limit in the stipulated time, the amount exceeded should be given the risk weight of 150%. ● Residential loan against the house/land should not exceed the two-third of the fair market value of the collateral ● Reclassification of real estate loan into 1) residential housing loan, 2) commercial complex and residential apartment construction, 3) trading complex already built 22 and which have begun earning and 4) other real estate loans. ● The real estate loans should be brought down to the following proportion of total loan within the stipulated time frame: Total of categories 1), 2) and 3): 30% and 25% by the end of FY 2068 and FY 2069 respectively Other Real Estate Loan: 15% and 10% by the end of FY 2068 and FY 2069 respectively. Totals of 1), 2), 3) and 4): 30% and 25% by the end of FY 2068 and FY 2069 respectively. Directive 21/067/68, Amendment 2067/12/04 (18-03-2010) ● Borrowers can restructure/reschedule the real estate loan for up to one year only if they have paid due interest. ● Relaxation of real estate loan definition so that the personal home loan of less than Rs 6 million may not be included in the real estate loan. The home loan can be provided by only one bank or financial institutions to one family only once Source: www.nrb.org.np ❏ A conventional loan is related to different commercial banks, development banks, and financial institutions. Different banks have different schemes catering to housing loans based on their foundation. Generally, conventional loans come with competitive interest rates, extended loan tenures, and other flexible features. According to a 2016 report, banks and financial institutions (BFIs) have come up with easy home loan schemes. BFIs are now offering home loans as low as 6.49 percent interest rate. Various banks have already introduced schemes for house and land purchases. Some of the banks of Nepal like NIC Asia offered the lowest home loan interest rates at 6.49 percent which was valid for a limited period. NMB Bank has its ‘Saral Ghar karja yojana’ starting at a 6.66 percent interest rate with a maximum repayment tenure of 25 years. Machhapuchhre Bank is offering a home loan scheme at 7.5 percent. People in the regular income group who can repay the debt are eligible to apply for the conventional loan. The minimum amount that the bank credits is Rs 500,000 up to Rs 10 million as per the valuation of the property. Interest rates are based on the floating market and subject to change. Bankers assume that the interest rate will not change at least for the fiscal so the buyer’s looking for a conventional loan should be updated with the interest rate banks are offering and go for what works out best for them keeping their financial status in mind. ❏ A Hard Money loan is the most flexible option of financing out of all these options as the money is lent from an individual or company and not a bank. It is also known as the “last resort” or “short-term bridge loans”. A hard money loan relies on collateral rather than the financial position of an applicant. The funding time frame for this is short. Collateral for this sort of loan is usually property and there is room for negotiation between the borrower and lender. The higher cost of a hard money loan is offset by the fact that the borrower intends to pay off the loan relatively quickly—most hard money loans are for one to three years—and some of the other advantages they offer. ❏ A private Loan is another financing option that is signed and accepted under the three “C”s of financing - Collateral, Credit, and capacity for repaying. The lender will examine first the affordability of the borrower and run a fact- check if the borrower can pay the loan in time. Private lenders prefer paid interest and negate foreclose on the collateral property. Out of all the options mentioned above Private loan is the quickest but also the most expensive financing option. In conclusion, a buyer has all these options available in short of cash but various factors such as credit score and home appraisal may cause the bank to reject the loan application. These factors make a financed offer usually less attractive to the seller, as compared to a cash offer. If you decide to purchase a house with a loan, make sure you can easily afford the principal and interest payments each month. If you decide to go with cash, make sure you'll still have enough to cover ongoing costs like property taxes, homeowners insurance, renovation fees, and other fees each month.
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