Buying a new home is never easy – especially if you are buying for yourself to stay. There are so many factors you need to consider; price, location, EMI burden, locality, facilities, proximity to schools, distance from office etc. It is especially difficult to predict how an area will develop in the near future. Developers would always want us to believe that every area has a lot of potentials, that a dozen new tech parks and half a dozen schools will be in the vicinity and that buying the home in the project they recommend will have an unlimited upside!
The problem for a home buyer, however, is of uncertainty. Often infrastructure projects get delayed, new tech parks do not come up, roads get repeatedly waterlogged and the whole logic behind buying in an ‘upcoming’ locality fails.
This is where buying an apartment or a house on resale makes sense. A resale property is one where the seller is not a builder but a home owner; the seller has been living there already/ rented it our already and is now looking at selling it. A lot of people are averse to the idea of buying a resale house because they assume that it might have a lot of problems. While there are ways around this, let's look at the advantages and disadvantages of buying resale property.

Advantages

• What you see is what you get: In a resale property, everything with regard to the condition of the house is clear. You can go and inspect it, you can identify issues (if any); overall, you can take an informed decision based on how the house is.
• All (well, almost all) benefits or problems of the locality are visible: Are the roads bad, is there a tech park nearby, are there malls nearby, how many schools, how many hospitals – everything is known. There are few shocks or surprises!
• GST ! GST ! – This is a big plus in Pune! Until GST was implemented, the tax component (service tax + VAT) was 6% of the property value in Pune. So, if the base rate was 50L, the total amount (other than stamp duty) was 53 L for the customer. However, after GST, this rate is 12%, which means the customer would now have to pay 56L! A 3L increase! The good part – this increase is valid only on under-construction properties. It is not valid for resale properties!
• RERA – This is meant to help home buyers. But unfortunately, builders are trying to be extra careful post RERA and delaying the whole process of sale! This makes waiting quite frustrating. In a resale flat, you get a completed project anyway. So, no delays!
• Saving on rent – This is one immediate financial benefit. Since you stop paying rent, you are converting your wasteful expenditure (rent) into useful expenditure (EMI) that goes towards an asset. You also get tax benefits on the interesting part of EMI.

But wait, it cannot be all positive, can it? Surely there must be some disadvantages.

Disadvantages

• Limited appreciation – One big problem with resale flats is that the value appreciation is limited. New flats appreciate much faster in the early years as compared to a resale flat. In fact, when you buy a resale flat, you pay the appreciated value! However, if your main focus is to move in and start living in the flat, then this part is something you should not be too worried about.
• It might not exactly be fancy construction – New flats are all fancy (Italian marble, multi level parking and what not). A resale flat, being a few years old, might not have all those fancy things. But then again, if you are looking for a solid roof over your head rather than something to show off, it shouldn’t matter much!

So, all in all, it is not such a bad idea to consider resale properties. Yes, to safeguard yourself, do the following things:

1. Home inspection – Get a qualified home inspector to check for faults/ defects/ issues so that you can get these repaired before you purchase.
2. Title search – Ascertain that the seller has a clear marketable title. Get a good lawyer to do this.
3. Sale agreement & sale deed drafting – Get a good lawyer to draft all documentation on your behalf. Will save a lot of hassles later.
4. Home loan – Finally. Shop around to get the best possible home loan rates. Do not assume that some nationalized banks will always give you the best rates. If you feel the task will eat up a lot of your time, approach a loan agent to do it for you. Loan agents earn commission only after the loan is disbursed, so they will do their best to keep you happy!
Good luck with house hunting! And remember, a resale property is always a great option!