Buying a pre-owned house? Here's what you should consider

Are you planning to buy your dream home but want immediate possession rather than waiting for the completion of an under-construction property? Then, the pre-owned house could be the most viable option as buying a pre-owned house allows you to get a ready-to-move-in living space in the neighborhood of your choice.

“Resale property can be an economical bet compared to opting for a ready-to-move-in property due to factors like better loading factor, seller’s urgency, depreciation, age of the property, the definite final cost of the asset, etc. Also, the new property rates are higher than the old property in most of the micro-markets,” explains Pankaj Kapoor, MD – Liases Foras.  So, if you are thinking of buying a resale property, you should keep these important factors in mind:

Transfer fees & Re-Registration cost: While buying a resale property, you will have to pay transfer fees, stamp duty, and registration fees. The cost of registration or stamp duty is an extra cost you have to pay to the government to transfer ownership of the property which you also pay in case of the new property. Hence you need to evaluate the cost as in some cases it can be a hefty amount.

Existing Loan: Generally, people mortgage the property and take loans against it. You should check if any existing loan is pending against the property. Always ask for the original documents of the property before buying. If the seller only has photocopies, then the originals are with the lender. If you are applying for a home loan yourself to purchase your resale property, make sure you work with your own lender to conduct proper checks on documents.

Age and Condition of the Property: It is an important factor you should consider before buying. You should not buy a flat that is older than 10 years as it gives multiple structural problems and may require extensive repairs, renovation, or even redevelopment in some cases. Apart from this, it will be difficult to get a home loan on an old flat.

Document Check: You should ensure to check the sale deed, encumbrance certificate, NOC (No Objection Certificate), possession certificate, latest property tax receipt, and occupancy certificate. Your document checklist should also include ownership document, title clearance, old energy bill payment, property tax payment, approval plan, etc. This document check will help you to avoid legal problems and financial burden at a later stage.

Valuation of Property: It is important to do background research and check the property’s market price as will impact your buying if you are planning to take a loan. Go through the current price trends and get an estimate or seek a professional to help to evaluate the second-hand property. To get a better idea you can also check the price of the new property in your area.

Brokerage: Purchasing a resale property is usually done through a property consultant, which means that you may have to pay consultancy or a brokerage cost. If you buy a new property from a developer, you don’t need such a charge is payable.

Payment Terms: It is important to consider payment terms before buying a resale house or flat. Many owners ask for upfront payment. Under this condition, you should be in a position to make an early payment to the owner.

Renovation and Repair cost: When buying a resale house, you may need to paint, refurbish or even renovate it as it may need maintenance or you just want to make the changes to fit your style of living. Make sure you do a proper assessment of these costs before you buy the house.