Pros and Cons of Buying Pre-Owned Homes and Apartments

Buying a home or apartment is a decision very close to the heart. Whether we’re planning to live there or rent it out, we tend to look for a place that is homely, yet practical.

Over the past few years, we’ve seen several large-scale residential projects coming up in localities that we’re interested in. So, shopping for a home or apartment has never been easier!

There is a question we need to ask ourselves, though. Do we purchase a brand new property, or go for a pre-owned home/apartment? In this article, we’re going to look at the pros and cons of buying a pre-owned home or apartment.

Pros

First, let’s look at the advantages of buying pre-owned homes and apartments.

Lower Price Tag:

One major attraction for residential properties on the second hand market is the price tag. Being a second hand property, the price quoted will be relatively lower than the developer’s price.  In certain cases when the seller need to dispose the property urgently, they reduce the rate to sell the property fast.

Lesser Waiting Period:

While a new home/apartment might take years for project completion and possession, you can get possession of a second hand property in a matter of months. You will not not have to wait long to move in, and you will not have to pay the rent and EMI simultaneously.

No Development Risk:

When you go for a new home/apartment, there is considerable risk of the project being delayed or not getting completed at all. A pre-owned residential property eliminates that risk as the project is already completed, or at least nearing completion.

More Amenities:

In most pre-owned homes and apartments, the seller has already developed the place. The interiors, wood furnishings, cupboards and some appliances are already in place for the new owner.

Cons

There are some disadvantages of buying a second hand residential property too.

Cash Payment:

In most cases, the sellers of pre-owned property demand a certain amount by cash, so they can circumvent the capital gains tax. This is illegal as it is kept off the books, and the amount cannot be accounted for through a home loan.

Immediate Payment:

When you buy into a new residential project, you often have a staggered payment plan. You don’t have to pay the entire amount immediately. But with a second hand property, you will have to pay up the entire cost within a short period.

Project Risk:

If the residential property is fairly new, there is a high risk attached to it. There is no guarantee that the builder will deliver all the amenities that were promised to the first buyer. There is also the probability that the project may get stuck in the final stages.

High Maintenance Costs:

An older building will have a higher maintenance cost. There may be more repairs, and some hidden defects may come to light only after you purchase the property.

Things to Check Before Purchasing a Pre-Owned Home or Apartment

1. Check the developer’s account statement to verify how much the original owner has paid and what is still pending.
2. If the building is still under development, verify who has to pay the transfer fee.
3. Take a look at the original documents with the help of a lawyer to ensure that it indeed belongs to the seller.
4. Check if there is an existing home loan taken on the property. If yes, make sure the closure has been done and title deed has been released.
5. Find out how many banks are offering loans for the project. Banks usually run a variety of checks before they offer home loans.

We hope this article has given you a bird’s eye view of what it takes to buy a pre-owned home/apartment. You will have to weigh the pro and cons of the second hand property and then come to a final decision.