The famous saying by Franklin D. Roosevelt “Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world” is currently supremely relevant in these unprecedented times. Home ownership is a common desire and it is a ‘once in a lifetime’ decision for many, it’s therefore advisable that you choose wisely.
When it comes to buying a home, while most of us would prefer buying a new property, there many who would opt for a resale as there is a perception that it is cost effective. Let’s evaluate this by looking at the points to consider before you decide.
Pros of new
One of the biggest advantage of a new house is the fact that it’s new – a fresh start for you to create memories with your loved ones. Besides, a new property will also be built as per the latest trends in terms of well-planned layouts, smart utilisation of space, fixtures used, provision of ventilation, fire alarms, safety features etc. Also, overall the development will provide experiences catering to all age groups and support holistic living. A home in development that offers good social infrastructure tends to provide good return in the
Buying a brand new house, especially one which is ready to move with a reputed developer is the best thing to look out for in the current scenario with interest rates lowest in last 15 years and govt. relaxations on the stamp duty. It might seem little expensive compared to resale flat in the same area, but the difference may not be significant if you take into account the recent relaxations in payment and the risk of clearance or transparency involved
in resale purchase.
With a new house in a development by a reputed developer, you can be assured that the project is RERA approved and all the related paperwork is done and permissions are in place. There will also be transparency in the whole deal, with no hidden costs involved.
When buying a new house from developer, you can get more choices of inventory, taking into account the view you want, your floor preferences, your parking needs, tower location, etc. These properties are much better and convenient as compared to those of landowners where you don’t get much of a choice.
Getting financing for your new property is relatively straight forward. As long as you meet the criteria set by the financial institutions, you will get the loan amount that you need to make the purchase. Many developers also have tie-ups with these lending institutions, thus making it easier to avail loan. Additionally, you will also benefit from flexible payment terms, which means you may not need to pay he developer the entire amount up front, in one go.
A new development will be built using the latest technology advances, as well as adopt sustainability measures like rain water harvesting, solar energy for light, waste water management, etc. in the long run, these will prove to be cost effective.
Sometimes, when you invest in an under construction project, you may have to wait for possession, and it can even get delayed or stalled. Chances are that when you purchase a property that’s part of a larger development, all the amenities may not be ready. Hence, it becomes necessary for you to check the entire project’s completion date and got with a reputed developer who is assured to deliver.
If you are looking to invest in an upcoming area, the possibility is that the area may not be developed as you want. Hence, it is best to look for projects that consist of basic utility services such as grocery shops, ATMs, medical, hospitals, and schools. Also, there should be commuting facilities offered by the developer to the nearest mode of local transportation or commercial hub.
Pros of resale
An old flat may comparatively be affordable than buying a new flat. The cost may vary depending on the age of the property and location.
To move into an old flat, you will not have to wait for too long. It can happen right after every paperwork that is required to be done is complete. Moreover, once you shift to a resale flat, all amenities which are available and come by default with the flat would be ready for you to use.
Cons of resale
One of the biggest point of consideration when deciding between resale vs. new is the evaluation of paperwork like title clearance, allotment letter, sale agreement, NOC, environment clearance, sale deed, society incorporation certificate, among others. There is more risk involved as it could be in conflict (termed as bad debt). You’ll require a lawyer for checking all the legal and technical documents, this includes title deed, land use, approval
from municipal authorities, occupational certificate etc. This will be an added expense.
You will have to look into mortgage payment history and avail a NOC from the bank to avoid undue troubles post-purchase. The old home loan on the resale unit should be either foreclosed or transferred to the buyer for executing a sales deed. In case of an existing bank loan, the title documents are with the bank and they get released only when the loan is foreclosed. This generally takes 2 to 3 months of time. Further to ensure that there are no outstanding dues for the unit, a NOC is required from the developer/society as well. There should be no outstanding dues to like maintenance, other charges, etc. One also needs to pay a transfer charge (around ₹25,000) for receiving the NOC.
Getting a loan sanctioned for a resale unit could be tad difficult, since financial institutions are often vary of giving loans to finance older properties. They will be far more stringent about the paperwork and may not offer the entire loan amount that you may require.
Depending on the age of the property, you may find the flat may not be as well ventilated or lack smart space utilisation, you may also need to look at major repairs in terms of plumbing, electrical and other civic work. You may also want to refurbish the flat to your liking. This will add to your costs. Further, the development may be lacking in terms of the lifestyle amenities.
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