In our earlier article we had already outlined the pros and cons of going for an under construction or ready-to-move-in/ resale property. We understand that it is indeed a difficult decision take on whether to choose a new property or an equally tempting option available on the resale market. So in this article we will give you some top tips if you have decided to buy a resale property – both in a gated community or otherwise.
But first of all, if you have decided to buy a stand-alone property, which was constructed a couple of years back, you need to be extra careful because you will be dealing with a single person, whom you necessarily may not know beforehand. So, find out all the antecedents of the house before you give the token amount, forget signing of the agreement!
Age of property: When you are buying a resale property, first find out the age of the property. The ideal age of a property is 1 to 5 years which can be stretched to 10 years. It is good to bear in mind that older the property, more you will have to spend on its maintenance. Moreover if you are taking a loan, the down payment could be more in case of older properties. In addition, banks usually lend only on properties which are relatively new. The tenure of the loan also decreases with the age of the property so buying a relatively older property will hit your credit eligibility.
Know the builder: When you have shortlisted the property, find out who the builder was. This will give you a fair idea of the material used and the quality of construction of the house. Try to visit a couple of the builder’s past projects and look at the current condition of these properties.
Know why the owner is selling: It is very important to know why the owner is selling. Are there any problems/ issues which the area usually faces like availability of basic amenities, etc. that have forced him to sell the property or is it a family dispute related to the property in question?
Amenities in the vicinity: Ideally when you look for a location to buy your house, it should have good social infrastructure, availability of adequate public transport and sufficient economic activity to sustain development and growth. So if you are not familiar with the location where the property is, do a recce of the area to get a feel of the advantages and disadvantages of the location of the property. How far is the shopping center?, Does the area witness long bouts of power cuts?, Are there any good restaurants/ cafes nearby?, Are people like housekeepers, cooks, cleaners easy to find, etc. If you are planning to use the property as a holiday home where guests would come and stay, these things will really matter and will reflect directly on your rental rates.
Clearances and documents: All the documents that are applicable for an under-construction property sale would be required for a clear resale property transaction, as well. The owner from whom or the developer you will be buying should be able to produce all original documents. If you are going to take a loan, the lending bank would do its own due diligence and establish the availability of all required documentation. However, if you are buying with your existing personal funds, it is highly advisable to do so through a lawyer experienced in property transactions. If the property is within a gated community you should establish the existence of a proper society and get the copies of the original sale deed and the society share certificate from the homeowner association. Other documents which you must ask the seller to give you are a letter from the homeowner association/ developer (whichever the case may be) that reflects details such as the number of floors in the building (in case of an apartment/ condo), the construction year, the property’s built-up area, etc. Legally the transaction cannot proceed without them.
Up-to-date tax payments: The most important aspects of buying a resale property are transfer and re-registration of the property in your name. For this you need to approach the local authority. However you might hit a roadblock if the seller has not cleared these dues when he had bought the property. So before you give your final approval and to protect yourself from any additional costs, make sure you get hold of the all the receipts of the dues paid by the owner till the date when the sale agreement will be signed. If the property is in a gated community and is managed by the homeowner’ association, the seller will also need to give you a NOC from the association saying that there are no pending dues. Property taxes, electricity and water bills, maintenance charges till the date of signing the sale agreement have to be cleared by the seller.
Conclusion: The primary benefit of going in for a resale flat would lie in buying a home in a location where no new supply is coming in or when you have personal cash resources or want to be able to start living in the place right next day. Resale properties ideally come with a higher price tag than under construction properties in the same area. However if the idea to buy a ready-to-move-in resale property is because you want to furnish it and convert it into a holiday home and start earning immediately, it does makes sense.