What Is Agreement Value of Property

When it comes to buying or selling real estate, one term that you may come across is the “agreement value.” This term is commonly used in the Indian real estate market, and it refers to a specific value that is agreed upon by the buyer and seller of a property. In this article, we will take a closer look at what the agreement value of a property is and how it is calculated.

Definition of Agreement Value

Agreement Value is a term used to describe the value of a property that is agreed upon by the buyer and seller of a property at the time of sale. It is the value that is mentioned in the agreement of sale between the buyer and the seller. This value may or may not be the same as the actual market value of the property. Sometimes, the agreement value is higher or lower than the market value of the property.

Calculation of Agreement Value

The agreement value of a property is usually calculated based on the market value of the property. The market value is the price that is usually paid for similar properties in the same neighborhood. However, the agreement value can be different from the market value due to various factors.

One of the factors that can affect the agreement value is the location of the property. A property located in a prime location is likely to have a higher agreement value than a property located in a less desirable location. Similarly, the size and condition of the property can also affect the agreement value. A large and well-maintained property is likely to have a higher agreement value than a small and poorly maintained property.

Another factor that can affect the agreement value is the demand for the property. If there is high demand for a particular property, the agreement value is likely to be higher than the market value. On the other hand, if the property is not in high demand, the agreement value may be lower than the market value.

Importance of Agreement Value

The agreement value of a property is an important factor in determining the stamp duty and registration fees that the buyer and seller have to pay during the sale of the property. These fees are calculated based on the agreement value of the property. In some cases, the stamp duty and registration fees can be higher than the actual sale price of the property if the agreement value is higher than the market value.

Conclusion

In conclusion, the agreement value of a property is the value that is agreed upon by the buyer and seller of a property at the time of sale. It is usually based on the market value of the property, but it can be different due to various factors. The agreement value is an important factor in determining the stamp duty and registration fees that the buyer and seller have to pay during the sale of the property. Therefore, it is important to understand the concept of agreement value when buying or selling a property in India.