Although the real estate segment has experienced stagnation in past few years, secondary market for resale properties has observed a constant growth during the same period, as revealed by the studies. This trend reflects the higher inclination of buyers and investors towards ‘resale’ property, or secondary property.
But, buying a resale property is a matter of great prudence and involves loads of groundwork before finalizing a property. Following are the few steps that can actually help you escaping last minute hassle and guide you on how to buy a resale property.
- Take help from Experts: A local good real estate agent is well-versed with the price trends as well as various sellers in the market looking out to sell of their property. He not only bridges a gap between a buyer and seller, but also help in the paperwork and procedures related to buying a resale property. To consolidate legal viability, a lawyer must also get consulted,
- Documentation of Property: It is good to consult a real estate agent or lawyer, but you should also indulge yourself into documentation check of the secondary property. Whether seller is the owner or he has just been given power of attorney for the property, all these aspects must be checked carefully. It is important that all the original papers for the resale property must be in order. Each and every document should be stamped properly else you may have a trouble in procuring loan for the same. Even the further transaction of this property may attract troubles as well.
- Check on Existing Loan: It is important to ensure that the resale property must be mortgage-free. As the bank only consider loan once against a property, if the seller has already procured a loan from bank, you shall not be able to obtain the loan.
- Eligibility of Loan: Few banks follow a norm of not lending for buildings older than 10 years. As the bank ensures that the amount of loan must always be less than the valuation of the property, banks may not be likely to take a risk on account of older buildings as their valuation is more vulnerable to downward movement.
- Proper Valuation of Property: It is highly recommended to avail the service of property evaluation before approaching any bank for loan.
- Down Payment: You may require to pay as much as 20% of the property price as down-payment in case of resale property.
- Society Flats: In case of flats in societies, the transfer of ownership may attract substantial cost. So it is prudent to inquire about such costs before investing in any resale property in societies and cooperatives.
Buying a resale property not only saves a lot on high rents, loan against them also save on taxes by providing deductions on account of interest paid. But you need to analyse all the aspects of resale property before investing into it.