Property Buying Payments
Payments of buying a property in Pakistan is completed in different stages. This article will guide you through the correct procedure in Pakistan for making property transfer payments successfully. You will gain knowledge about token money, advance and details on when to pay the entire payment during property buying transaction.
When the final purchase decision has been made between the buyer and the seller then it can be initiated through a formal process by submitting a portion of the transaction amount to the seller which is referred as the Token Money in Pakistan. This amount is the binding that the buyer has shown interest in good faith and wants to continue with the transaction between the two parties. This is usually considered conditional amount. If, for some reason, the deal falls through, there is no penalty and the same amount is returned to the buyer.
There is no fixed rate to determine this token money amount. As a condition both the buyer and seller can decide the token amount and the rest of the payment schedule as per their mutual consent. This token amount is just a minor part of the down payment that will be received later on with the full payment of the property.
Read More: Sample of Conditional Token Receipt
Advance Payment (Bayana)
The advance payment is also referred as Bayana Amount in Pakistan. Normally when the purchase decision has been finalized the Bayana should be paid immediately or an agreement should be concluded between the two parties to formalize their transaction. This agreement is usally known as Sale Agreement (Part Payment).
It is mandatory to mention the Bayana amount in the agreement that has been written down.Unfortunately as this agreement is not a formal document that is to be submitted or verified by the government, therefore it does not have any value under legal obligations and can not be considered valid when dealing with default issues officially.It can only act as a proof of payment that can be shown in the court in case of a hearing. The Bayana is normally 10% of the total value of the property and should be paid by the buyer to the seller.
Since there is no form of legal assurance or refund option available for the Bayana, therefore the buyer tends to lower the token amount as far as possible to buy him some time whereas the seller might prefer the opposite as he may take a higher advance amount and then the full payment at once later on.
Read More: Sample of Sale Agreement (Part Payment)
Full& Final Payment
It is also important to make sure that all the monetary arrangements have been made so that the transaction can be processed successfully. After the token money has been paid to the seller, the transfer process has began and all the legal formalities should be authenticated and completed. In case the buyer is purchasing the property through a bank loan, the seller can verify the arrangements through checking the official loan documents so that he has assurance that the buyer will pay the rest of the payment in due time without any hindrance.
It is also important to note that paying the token amount or Bayana does not transfer the ownership rights to the other party as the rest of the payment is still to be paid in full. Also the credibility of the parties acts as a validation of prompt payment in the future and avoids any hassle in the transaction procedure. The time periods of rest of the payment should also be specified in the agreement made between the two parties. When the full payment has been made than only the ownership rights will completely be transferred to the buyer and the seller will not have authority over the property anymore.
This article describes the usual practices carried during the payment process. You can find more relevants articles on our Property's Blog and Article section.