Buying a new home versus a resale one is an age-old debate that never seems to conclude. While some buyers are particular about a new home, there is still a good percentage of people that prefer a resale unit. The reasons?
“Well, in highly-developed micro-markets, it is often difficult to find good options in the primary market. Due to the scarcity of land in these areas and high cost, owning a home in prime areas become a tough task. This is where resale units come into the picture,”
If you too are confused between a new and resale home, you have come to the right place. In this post, we will present you a comparative analysis of the two types to help you make an informed decision.
Let’s begin by understanding the pros and cons of a new property.
One of the most significant advantages of buying a new home is the availability of choices. Since there are an array of options available in the market, one can select a unit based on their preferences. A new home also comes with the latest fixtures and fittings, which can ensure hassle-free performance for a longer period.
Further, new properties score when it comes to the technological aspects in a house. The condition of resale properties may be good but may not feature the latest technologies used these days. Also, new homes, in comparison, are more user-friendly and space-optimised.
In tandem with the go green attitude of today’s buyers, most new properties feature an energy-efficient structure.
In terms of finances, while buying a new property, one has to pay about 10-20% as the upfront cost and remaining as the construction progresses. This gives buyers some spare time in hand to manage finances in a better way.
Lastly, with RERA in place, under Clause 14 (3), developers are liable to fix any structural defects for five years after handing over the possession.
So, are there any cons of a new property? Not really. But in case of an under-construction property, one may face construction delays due to numerous reasons.
As mentioned earlier, with the unavailability of land, most central localities in metros don’t have enough space for a new residential project. In such cases, a resale property emerges as a viable option.
Resale property is like an open book. One can check the entire property for any flaws in construction like cracks and leakages. Moreover, one can completely evade the risk of project delay, as there is no waiting period. Immediate possession help buyers in saving rent money. You can also avail tax benefits on the EMIs if you take immediate possession of the resale house.
In a resale property, one can also easily verify legal titles and can be assured of the legal status of the property.
Another interesting benefit is that you get a clear idea of the kind of residents and neighbours. There is also better clarity on the maintenance charges.
Are resale properties cheaper than new ones?
Not always. This depends on the age of the property, location, and amenities. Often, an under-construction unit in a new project is cheaper than a resale unit.
While it may be slightly cheaper, but one must consider the cost of renovation and refurbishing.
Further, unlike a new property where developers offer flexible payment schemes to buyers, in a resale property that might not be an option. A prospective buyer will have to arrange for finances at a short duration.
However, there are scenarios where buyers can get a good deal on a resale property.
Stealing the deal: Many investors buy a unit in a new project merely for investment purpose. And as they enter at an early stage, they usually get a pre-launch or new-launch price benefit. While exiting the project, such investors generally offer a property at a much competitive rate than a developer. In such a scenario, one can steal the deal.
Further, there are many cases where the owner of the property is in a hurry to sell the property. This could be because of various reasons like city or country change, upgrading to a bigger property, etc. In such case also, buyers can grab a good deal.
What about home loans?
Home loan for a resale property is quite similar to that of a new one. However, the list of documents would be lengthier as one has to present documents stating a change in ownership. And if the property is already on loan, then one has to submit those documents as well.
While most banks and housing finance corporations give loan for resale properties, there are often restrictions on the tenure for repayment. When compared to a new property, the bank may insist on a higher down payment for the home loan. Also, some lending institutions do not give loans on homes that are more than 20 years old. Even if they agree, the tenure for repayment would be much shorter.
And there you have it! We’ve covered the basics of what you should know about new and resale properties. Now all you have to do now is to analyse your requirements and finances and take a call.