The Indian real estate market has witnessed several challenges in the past few years wherein developers are stuck with huge unsold inventory and delayed delivery. This prevailing situation provides a better opportunity to buyers to purchase a piece of property from investors/ sellers as most of them are looking to sell at a lower profit margin. In simple terms, resale means that the property is being sold again and is not a new one. One, therefore, needs to be cautious before getting into a resale transaction and it is always recommended to have a good licensed broker that can help in carrying out the transaction.
“Generally, buyers consider buying a resale home in a strategic location provided they have adequate cash resources at disposal. However, one needs to ensure that one is investing one’s money in a property that can generate better returns in the future. Although the prices of resale houses will be on the higher side compared to under-construction homes, but they are considered the safest investment in the prevailing market conditions,” says Avnish Yadav, Deputy General Manager, Residential Services, Colliers International India.
Here are 10 important points that you should keep in mind before buying a resale property:
1) Market Knowledge: The market value of the property keeps on changing as per the supply and demand available in the market. One should conduct an in-depth research about the market before making a decision and gather information from the local brokers to understand the market in detail.
2) Budgeting: There are numerous costs associated while buying a resale property such as the total cost of property, registration cost, transfer cost, broker fees, loan, and taxes. One should also bargain hard with the seller to buy the property at a good price.
3) Home loan: The buyer should always finance the property by taking a home loan through a bank as they conduct all the initial legal and technical checks for the property that can help one with first screening of legal support.
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4) Location: It is considered an important criteria while choosing a resale property. “As the price of a resale property is generally higher than a new property, one should be aware about the current and future developments in the location while zeroing in on the property. Additionally, one should ensure that all basic necessities like hospital, school, transportation, shops are in the offing. This not only helps to maintain a better lifestyle but also ensures appreciation of the property in the future,” informs Yadav.
5) Due Diligence: One should buy a resale home after conducting an in-depth research about the property. The due diligence check includes verifying title records and ensuring that the property specification emulates with the claims. “One can also have additional safety while applying for a home loan from the bank. Some buyers get the property part-funded even if they have adequate funds to buy the property,” says Yadav.
6) Age of property: One should not invest in a property that is more than 15-year old as older construction comes with its own repairing and higher maintenance cost. Besides, it becomes difficult to avail a home loan for such properties.
7) Services and Interiors: If one is paying a premium to buy the resale property, one should ensure that everything is in working condition, such as lift, swimming pool, gym etc. Internal fixtures also need to be closely examined, else one will end up spending a lot more in making that house livable.
8) Documentation and Procedures: All the documents that are required for a primary property residential sale are also needed for the resale transaction. Some of these include ownership document, title clearance, bill payment, property tax payment, approval plan, receipt of registration fees, etc.
9) Terms & Conditions: All the terms and conditions related to payment, commitment of pending work, taxes and other details that were discussed during the negotiation should be in writing and signed by both the parties so that the transaction can be concluded smoothly.
10) Valuation report: It is always advisable to have a valuation report so that one is aware about the amount he will pay to the seller. “Even the financial institution will consider the valuation report for loan disbursement. Moreover, one should also avail the services of a good broker, if possible, that can help you in finding the right location, checking legal documents, doing negotiation, carrying out the resale transaction and getting the property registered or transferred in one’s name,” says Yadav.