Points to remember before purchasing a Re-Sale property

Who does not wish to live in a house of their own? Buying a new flat
will take a long time, so some of us may wish to settle for buying a
resale property. However buying a resale property could involve many
legal and other procedural requirements. It is prudent to first
understand the various procedures and safety measures for buying resale
property to avoid hassles in future.



Buying Resale Property –A Guide



Consult Experts:



It may be ideal to engage a good real estate agent to locate a resale
property. He would be in a position to locate sellers as well as guide
you regarding the price of such properties in different localities. They
would also be in a position to tell you about the seller of the
property. Most real estate agents charge a fee and also help with
registration, payment of stamp duty and other paper work involved in the
purchase of resale property. In addition, taking the help of a good
lawyer would also help to make sure that things are clear legally also.



Title of the property:



It will help engaging experts like real estate agents and lawyers to
help you, but it is always better to be well-informed yourself when
entering into deals for buying resale property. The first step in this
regard would be to establish the title of the seller; whether he is the
real owner of the property or has been given the power of attorney to
transact the deal. All the documents with regard to the property need to
be clear. In addition you need to make sure that all the original
documents with regard to the property that were given by the builder or
original developer are in order.



Documents:



Buying resale property seems great, but it could become a big problem if
the documents regarding the original purchase and subsequent transfer of
title are not properly stamped. Firstly it could pose great problems
especially if you want to apply for a loan for purchase of the resale
property. Subsequently it could prove to be unacceptable in case you
wish to transact further on the property.



Existing Loan:



It is also necessary to make sure that the property documents are not
lying mortgaged in the bank's custody against a loan taken by the
seller. The bank will consider a loan only once the loan taken by the
seller is repaid and the documents released.



Loan Eligibility:



Buying a resale property would definitely provide you with a bigger
space in case of older properties. However it is best to note that some
banks may not lend money on buildings older than 10 years. This may be
due to the reason that they may not want to take the risk of the price
of the property going down. Banks also make sure to ensure that the
bank's outstanding loan should always be lower than the value of the
property in the market.



Property Valuation:



Next it is imperative to note that the loan amount is highly dependent
on the cost of the property. Technical experts would evaluate the
property. However it would be useful to yourself avail the services of a
property valuer at a small fee before approaching the banks. The
bank's property valuer may valuate the property at a much lower
rate. They would also like to safeguard their interests against the fall
in the price of the property in future.



More Down Payment:



Most banks wish to make sure that you be responsible for the maintenance
and good upkeep of the resale property. So banks would expect you as the
purchaser of the resale property to pay a certain percentage of the
price as down payment. You may have to pay about 20% of the price as
down payment; property of 50 lakhs requires 10 lakh as down payment.



Age of the property:



This down payment could be more in case of older properties. In
addition, banks usually lend only on properties that are unto 50 years
old. The tenure of the loan also decreases with the age of the property.



Flat Society:



The bank may grant the loan and you may make the down payment, but there
could be another problem. It arises out of the need for some Flat
societies that require the payment of a heavy price for change of
ownership. It is best to consider this cost also when coming to a
conclusion while purchasing resale property in cooperative and other
societies.



Conclusion:



Buying resale property would give you a chance to settle in your own
house fast and save you of high rents paid and the need to frequently
shift your place of living. Taking a loan from the bank could give you
tax deductions on the interest paid soon. You would not have to wait
till the possession as in the case of new flats. It is always prudent to
be well informed about the various details of the resale property.