Open file trading is a method of real estate trading in which the seller of a property hands over the original documents related to the property to the buyer before the full payment is made. In Pakistan, open file trading is a common practice, especially in the sale of plots in housing societies.
Here are some key statistics related to open file trading in Pakistan:
- According to a report by Jang Group and Zameen.com, open file trading accounted for approximately 75% of all real estate transactions in Pakistan in 2020.
- The same report found that open file trading was most common in the sale of plots in housing societies, with over 90% of all such transactions using this method.
Pros of open file trading:
- Faster transactions: Open file trading allows for faster transactions as the buyer can begin the process of transferring the property ownership without having to wait for the full payment to be made.
- Convenience: Since the buyer has access to the original documents related to the property, they can begin the process of transferring ownership without having to go through the hassle of requesting documents from the seller.
- Flexibility: Open file trading allows for more flexibility in terms of payment schedules, as the buyer can make partial payments while the transfer of ownership is being processed.
Cons of open file trading:
- Risk of fraud: There is a risk of fraud in open file trading, as the buyer may not make the full payment after receiving the original documents. This can leave the seller with no recourse to recover their losses.
- Lack of legal protection: Open file trading is not legally recognized in Pakistan, which means that buyers and sellers do not have the same level of legal protection as they would in a traditional real estate transaction.
- Lack of transparency: Open file trading can lack transparency, as buyers may not have access to all the information they need to make an informed decision about the property.
In conclusion, open file trading is a common practice in the Pakistani real estate market, especially in the sale of plots in housing societies. While it offers some benefits in terms of convenience and flexibility, it also carries some risks in terms of fraud and lack of legal protection. It is important for both buyers and sellers to carefully consider the pros and cons of open file trading before engaging in this type of real estate transaction. It is also advisable to seek legal guidance to ensure that the transaction is conducted in a safe and secure manner.