Pros and Cons of Buying a Resale Home
Are you buying your first home? There might be a lot of confusion. One of the first questions that might pop up in your mind is whether to go for a newly constructed one or buy a resale home.
An important reason why many look into resale areas is because of the difference in rate compared to new houses, but there is more to know than just that if you are considering buying a resale flat.
Let’s see into the pros and cons of buying a resale property:
Pros of buying a resale property
Affordability:
As we discussed above, this is the major reason people prefer resale houses. It has a low down payment and cheaper interest rates making it suitable for buyers with low to moderate-income levels. In Mumbai Metropolitan Region, the average house price rose by 1% y-o-y to INR 9490 per sq.m. So it’s obvious people search and prefer resale flats in Mumbai and all over India.
Available in the desired locality:
Trying to buy a newly constructed house or land in a popular area is not as easy as it sounds. It might take a long time before you land on one which suits you. Whereas when you go for resale houses, it is much more easily available. Resale properties are usually located in a neatly-formed neighborhood. Hence, it is very much suited if you have a big family.
Room for negotiation:
As you will be buying from a person and not a company, there is always room for negotiation. The negotiation not only will be from the main amount but also can be in the form of furniture which the old owner is willing to leave. If he decides to leave even two ACs in two bedrooms, you have saved about Rs.50,000, which is a good deal.
Advantage of Tax Benefit:
According to the Income Tax Act, up to Rs.1 lakh can be exempted on principal EMI which can be availed under 80C, and up to Rs.5 lakh availed under 24B, when it comes to resale houses.
Save up on EMI and Rent:
If you are buying a newly constructed house, you might have to wait and meanwhile pay rent for your current house for a time till the house is fully constructed, which need not be the case in buying a resale property. You can save additional interest on EMI being paid for the house under construction.
Cons of buying a resale property:
Requires extra maintenance:
Generally, any resale house needs extra maintenance. Buildings that are older than five or ten years are something you should run away from. Even after checking the age, the building necessitates multiple repairs and renovation works to be suitable for you. There might be certain technologies that would not have been installed before which you might need to adjust or add on to the renovation works. With a new home, all these worries and mix up have no place.
Need to adjust with certain styles:
No matter how much renovation you do, you can’t change the entire style or the layout of an already built house. You have to come to peace with that fact. You might have to sacrifice a few personalized aspects you wanted in your dream home if you are going to settle for a resale house.
Clear out dues:
Before fixing the house, you must look into the mortgage payment history and be thorough that the house is free of all past dues and fees. The old owner might not even know it, and it can accidentally fall on you which can be inconvenient. You might also want to clear out all the details in maintenance or leakage works that the previous owner missed out on to inform you.
Tricky:
Buying a resale property is more than just like the house. This has more paperwork and formalities than buying a new one like environment clearance, title clearance, society incorporation certificate, allotment letter, sale deed, NOC, etc, Usually hiring a lawyer is advisable. There will be verification of lethal documents like an occupational certificate, a title deed, approval from municipal authorities, etc, Not that buying a new house won’t have paperwork, but this carries more risk and stress.
Precautions:
These are important points that you might want to keep in mind to keep yourself from any legal problems or future inconvenience if you decide to proceed with buying a resale property:
- Be sure of the building’s age and calculate the repair works.
- Be sure and double-check all the documents with the help of a lawyer.
- Make sure there are no fee dues.
- Be ready to negotiate, and get yourself a good deal.
- As this will be located in a formed neighborhood, make sure you’ve got good and manageable neighbors.
- Verify all the amenities that might be missing compared to present houses.
Checking the pros and cons, choose what is suitable for you.
