Planning on buying resale property? Sure, you could bag a great deal, but there are certain important factors that you need to be wary of. Remember, you are more likely to bag an awesome resale deal in a residential area with excessive residential units as compared to areas where the supply is scarce.
In any case, there are a few things that you need to consider when buying resale property. For example, if you’re looking to purchase a ready-to-move-in apartment, don’t forget to take into consideration the cost of repairs, plumbing, fitting, electrical wiring, etc., especially if the building is an old one. In fact, it may be quite difficult to get a loan if the constructed property is over 20 years old.
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Resale properties are generally sold by primary owners or by investors. If sold by the latter, the house is likely to be in an unused condition. However, please note that one needs to research carefully before buying a house in the second-hand market.
Although you may get a more affordable deal if you buy a second-hand property, you certainly need to be cautious. Here’s a handy list of everything you need to be wary of.
One of the most important things that you need to check before buying a resale property is the documentation. Make sure that all the relevant and required documents are in order.
Don’t forget to check the property title, which will give you information about how old the property really is and how many owners it has had since the time it was constructed. Verify all documents, including the sale deed, encumbrance certificate, no objection certificate, latest property tax receipt, possession certificate and occupancy certificate.
When you check the property title to know more about the property, make sure you also confirm that no other individuals have any claim to the property. You certainly wouldn’t want to be stuck in the middle of a property scandal. If the property was not registered when it was purchased, there will be an additional cost of paying the stamp duty and arrears at the current rate.
It is always advisable to get legal help when verifying all the documents. Remember, better safe than sorry! Make sure you insist on the ‘chain of documents’, which includes partition deeds for the land and the agreements for buying and selling the property.
Also, ensure that all permissions such as a conversion order issued by the concerned authority are in order.
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Quotation and Inspection
Once you zero in on a locality or a property, try and get a rough estimate of the cost of the property you’re interested in. You could talk to brokers and locals from that area or even browse through various property portals online.
In fact, you ought to visit the property in person to ensure that there are no discrepancies. If you came across the said property on an online portal, it’s an absolute must to visit it in person. By doing so, you will get a clear picture of the locality.
What if the property is located a long way away from main roads or public transport depots? What if the property overlooks a dumpster or a graveyard? Are basic necessities like hospitals, schools, grocery stores etc nearby?
While getting an estimate will certainly help you understand the real value of the property, a personal inspection will go a long way towards helping you decide whether you want to make a purchase or not.
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Now that you have evaluated and inspected the property you’re interested in, it’s time to put on your negotiation hat!
Make sure you keep in mind the current market rate of the property and put in some research to find out more about the characteristics of the property, the surrounding locality or the amenities available in and around it.
Find out as much as you can about the building structure, its plumbing and wiring. When buying a resale property, it is advisable to go in for a property that is less than 10 years old. Why, you ask?
Well, you will find that a property that isn’t too old will be more affordable than new properties in the same area. Also, since the property isn’t that old, you won’t be looking at high repair costs. If you are looking at an older property, don’t forget that it may be difficult to get a loan. Hence, you will need to pay a high down payment.
Make sure you check if the building has a power backup, especially if the property you are interested in is located on one of the higher floors. If you are planning on moving to a city where power cuts are frequent, power backup is an absolute must. If the building doesn’t provide it, then this will be an additional cost.
Also check if the house comes with a parking space. If yes, find out if you have to pay an additional charge for it or not. Many buildings and residential complexes charge extra for a parking space. While checking all this, don’t forget to find out about the property’s security systems and features.
If the building lacks one or more of the basic necessities, then you could negotiate or bargain for a lower price.
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As a resale buyer, you need to check if the property has any existing loans against it. Ask the seller if the property is already mortgaged or not. Collect all the necessary documents from the seller and check with the bank for any unpaid loans.
The bank will authorise the sale once all existing loans are paid off and thus, you can get the original documents of the property. Also, you need to ask the owner to procure a document from the bank which confirms that the bank agrees to hand over the original documents and a no-dues certificate to you after the full repayment of the loan, if any.
Meanwhile, you should start checking your loan eligibility and find out if banks are willing to finance the property that you are interested in. If yes, find out the percentage of the property amount the bank is willing to fund.
The age of the property will play a major factor in determining the loan amount that you are eligible for. Usually, getting a loan sanctioned for a property that is over 20 years old can be quite difficult.
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Maintenance charges are charges paid towards maintaining common areas such as car parking, gardens, lobbies, lifts, staircases, swimming pools, security rooms, gyms etc.
The amount paid towards maintenances depends on the amenities provided by the building society. The maintenance amount can either be a pre-fixed amount or is calculated on a ‘per square feet’ basis.
While some buildings levy the same maintenance charge on all residents, some societies levy maintenance charges on residents based on the size of the property they hold. The maintenance paid is used to take care of expenses like security, common area electricity, water charges, sinking fund etc.
If the resale property that you are interested in is relatively new, the maintenance charges are likely to be on the higher side since most of newer constructions offer numerous amenities.
However, if the resale property that you are looking at is fairly older without many amenities, the maintenance charges are likely to be low. So, take maintenance charges into account while buying a property, since they could eat into your budget.
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Now that you know what to be wary of when buying a resale property, you will certainly be more prepared when the time is right.
On a parting note, we’d like to add that, when you are interested in buying a second-hand property, don’t just look at one property in a given project. Make sure that you check all other properties that are up for sale in the society that you are interested in. For all you know, you could end up with a much better deal.
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Also, don’t forget to take a look at our amazing Home Loan offers that could go a long way towards funding your dream home.