Points to re­mem­ber when buy­ing a re­sale house

Buy­ing a house in an old project can be a good in­vest­ment if the prop­erty is in a strategic, high-de­mand location with low or no new supply

HT Estates - - Front Page - Om Ahuja

The pri­mary ad­van­tage of go­ing in for a re­sale flat lies in buy­ing prop­erty in a strategic location with no new supply. If one has per­sonal cash re­sources at one’s dis­posal and is not re­ly­ing on a home loan (a home loan on a very old prop­erty can­not be taken for granted), buy­ing a house in a project that is at least 20 years old can be a good in­vest­ment bet if the prop­erty is in a strategic, high­de­mand location with low or no new supply. This would mean that the project would come up for re­de­vel­op­ment, en­sur­ing a tidy profit for the owner.

The pro­ce­dures

All the doc­u­ments ap­pli­ca­ble in the case of a pri­mary res­i­den­tial prop­erty sale would be re­quired for a clear re­sale flat trans­ac­tion, as well. The seller should be able to pro­duce all orig­i­nal doc­u­ments.

The buyer should es­tab­lish the ex­is­tence of a proper so­ci­ety. The orig­i­nal sales deed and the so­ci­ety share cer­tifi­cate are most im­por­tant, since the trans­ac­tion can­not pro­ceed with­out them. Also, the buyer should bear in mind that in the case of a re­sale prop­erty, proper trans­fer and re-regis­tra­tion is nec­es­sary.

The doc­u­ments re­quired for regis­tra­tion of res­i­den­tial flats, apart from the sale deed, in­clude a let­ter from the so­ci­ety that re­flects de­tails such as the num­ber of floors in the build­ing, the con­struc­tion year, the apart­ment’s built-up area and the num­ber of lifts in the build­ing.

Also re­quired is an as­sess­ment bill to the so­ci­ety from the mu­nic­i­pal­ity in ques­tion, a no-ob­jec­tion cer­tifi­cate from the col­lec­tor if the build­ing ex­ists on col­lec­tor’s land, a copy of the prop­erty card, and a re­ceipt for the pay­ment of regis­tra­tion fees. In ad­di­tion, the buyer of a re­sale flat should ask for a clear own­er­ship his­tory if the res­i­den­tial prop­erty has changed hands be­fore.

The lo­cal reg­is­trar will es­tab­lish the au­then­tic­ity of these doc­u­ments. If one is buy­ing the prop­erty via a home loan, the bank will do rou­tine due dili­gence.

Re­sale prop­er­ties cheaper?

Are re­sale prop­er­ties al­ways cheaper? Not nec­es­sar­ily. In the larger cities, new res­i­den­tial prop­erty supply is scarce or non-ex­is­tent in many cen­tral lo­ca­tions. In such ar­eas, there would not be a ques­tion of dis­counts on re­sale prop­er­ties. Dis­counts are more preva­lent in ar­eas where the mar­ket is more com­pet­i­tive. That said, re­sale prop­er­ties are sold ei­ther by the pri­mary own­ers or by in­vestors. As such, there is a higher pos­si­bil­ity of flex­i­bil­ity in pay­ment terms.

The chal­lenges

There are cer­tain chal­lenges that a buyer of a re­sale flat may face. These could in­clude lack of a proper chain of doc­u­men­ta­tion, es­pe­cially in cases where the prop­erty has changed hands more than a cou­ple of times. If the prop­erty is more than 18 or 20 years old, it is pos­si­ble that it was never for­mally reg­is­tered in the first place. Reg­is­ter­ing it at the cur­rent point in time would put the onus of pay­ing the stamp duty in ar­rears on the buyer.

There may also be ad­di­tional ex­penses for re­pairs to ma­sonry, plumb­ing, elec­tri­cal wiring and fit­tings. Also, ob­tain­ing a home loan for a prop­erty which is any­where close to 50 years of age can be a chal­lenge.

Fi­nally, one should bear in mind that In­dia’s res­i­den­tial prop­erty mar­ket is con­stantly evolv­ing. In an older build­ing one is un­likely to find the fa­cil­i­ties and ameni­ties that are avail­able in the newer projects on the mar­ket.

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