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Benefits and drawbacks of purchasing resale properties

Benefits and drawbacks of purchasing resale properties

When the primary real estate market is experiencing a decline, the resale market is an excellent place to find deals. The resale market also provides a wide range of choices, such as properties that are ready to move into, as well as adaptable payment plans and quick possession. However, just like everything else, resale properties also have some pros and cons. Let’s go over the advantages and disadvantages of buying resale properties in greater depth.

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Advantages of Resale Homes

As opposed to new homes, which are constructed in the suburbs, resale homes are typically old homes that were constructed inside the city when there was available space. A resale property is typically situated in an established neighbourhood, making it simpler to reside there.

You can avoid paying the extra interest on the EMI for a house that is still being built when you buy a pre-owned home. You must keep making EMI payments and interest until the home is finished. You can choose from a variety of choices on already-built homes and avoid paying rent.

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Nothing could be more lucrative than buying a flat for a significant discount over market value. Additionally, the resale apartments are finished and have a ready to move in designation.

One of the biggest benefits of buying a resale flat is the tax relief you get once you take ownership. According to Sections 80C and 24B of the Income Tax Act, interest payments on home loans may be deducted up to Rs. 1.5 lakh and the principal amount may be deducted up to Rs. 1 lakh each. This improves the financial viability of using a home loan to purchase property for a subsequent sale.

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Resale or refurbished homes are typically more cost-effective than newly built homes. If the home is an independent unit of property, its value will be based on the property’s location. On the basis of the building’s age, interior design, and furnishings, you can also bargain for a reduced price.

Disadvantages of Resale Homes

You can bargain for the instalment payments when purchasing a new home and incorporate them into your financing plan. However, if it is a resale home, you will need to pay the entire sum up front, which is not reasonable for everyone.

It is challenging to find out about new listings because the majority of resales occur through word-of-mouth or solitary networks, with little to no promoting done on behalf of the seller.

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Due to the lack of market transparency, it may be difficult to determine a building’s true value, which makes negotiating proposals slightly harder.

Buying a house can sometimes consume a person’s entire savings. It can be very disappointing to learn after purchasing a resale property that it was not worth the money or required more work.

In general, insurance coverage costs for resale homes are cheaper than those for new homes. The age of the structure is a factor that most private insurance companies consider when calculating insurance coverage. Additionally, insurance companies give very little reimbursement in situations where there is a theft or natural disaster. If you encounter the same, this could be a problem and leave you in a helpless position.

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 Things to consider before purchasing a resale home:

  • Make sure a lawyer reviews the property’s ownership papers, and make sure you maintain a duplicate of them.
  • Developers occasionally charge a fee for the transfer of property between proprietors. Always try to bargain since this charge is negotiable.
  • Before you move in, look over the smaller details like any hidden flaws or defects in the home and try to have them fixed. It’s possible that the prior owner inflated the asset’s worth by using less expensive materials, which is a problem. Therefore, before purchasing a resale home, always look for problems and attempt to solve them.
  • When a vendor sells to you, you must ensure that they have no outstanding debts to the builder or the bank.
  • Before you purchase the house, talk to the neighbours in the area and tour the neighbourhood.
  • Retrieve a current account summary for the property that specifically lists any late fees or interest owed to the prior owner.

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When purchasing a home, there is no such thing as 100% certainty, but by taking a few safety measures and doing your research, you can make the most of the circumstance. You must do extensive research and closely consider the benefits and drawbacks of every option before investing in any kind of resale property. If you keep these factors in mind when purchasing an upgraded house, you can make a wise choice.

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