Resale property offers benefits to home buyers

As property prices soar to higher skies in all the major cities, it is becoming more and more difficult for potential home buyers to find a home which is within their budget. Even as the home sales have taken a hit in recent years across the cities, there has been no sign of property prices slowing down.

At a time when property prices seem to be evading the reach of an average buyer, hope comes in the form of resale market. As compared to the prevailing rates of the real estate market in India, resale market offers properties at a discounted rate and one gets the chance to buy a home for himself/herself at a much cheaper rate.

Resale property market

Resale market is one that often eludes attention but which may provide you the chance to acquire flats at a substantially lower rate than the market price. These flats are not old ones or ones belonging to decade old projects. It may be the ones that have been empty since launch and developers may give them away on big discounts.

There may be other logic behind the huge discounts on resale properties. Many investors buy flats during the initial stages of a project and they are on the look out to earn profits by selling the flats off at a discounted rate. In most occasions, they offer flats at a rate lower than that quoted by the developer so that they can sell off the flats faster and earn a quick profit. Hence, if you are looking to buy a home, it could be your lucky ticket.

Another reason for developers to offer discounts is that they offer home buyers a discount of up to 20% during soft launches, i.e., the buyers are offered a hefty discount before the construction commences. The investors in such cases make a huge profit even if they sell off the flats at a discounted rate to the market price.

As per the norms, home loan principal repayment benefit of up to 1 lakh under Section 80C is reversed in case a buyer sells off the house within 5 years of buying it. Hence, a cash crunched owner may sell off a house before he/she starts paying EMIs. In that cases, the new buyer stands a chance to buy a home at a discounted rate.

Benefits of resale property

First benefit for you as home buyer is that you can avail a hefty discount in most of the cases. In Mumbai, you can avail a discount of up to 5% to 7% in case of resale properties. In Gurgaon the discount rate may be as high as 14%-17% in some projects. In Bangalore, too, whereas a new property would cost you around Rs 6000 per sq ft in localities like Sarjapur Road, the resale properties come at around Rs 4800 per sq ft.

However, there are other benefits of buying resale properties. In case of a resale property, the flat is in ready to move in state or nearing completion. Hence, there would be no possibility of the builder fooling you with fake promises regarding interiors or layout of the house.

Concerned issues of buying resale properties

While going for a resale property, make sure that you have at least 25%-30% of the property price available with you. The down payment asked in case of resale properties is higher than what is asked by the builder and you may also have to pay a substantial amount in case.

The main focus is to check thoroughly if all the property documents are in place. Be sure that the property is registered in the name of the present owner. Also, make sure that the seller has no unpaid dues and taxes till date.

You have to bear additional cost other than the property price – registration fee and transfer cost. You would need to pay a fee to the relevant authority to get the utility connections on your name. Also, although these homes are quite new, you may want to carry out renovations and modifications as per your wish. So, you need to include these costs in your final budget as well.

If the property is mortgaged, then obtain a letter from the corresponding bank stating that once the loan is fully paid, it agrees to forgo the property documents.

Last but not the least, check if the property is not a disputed one and also enquire in to the probable reason behind selling the house as there may be issues like neighbourhood or water scarcity.

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