How Buying a Resale Flat in Pune could be a Profitable Deal
Property buyers in Pune are often torn between the choice of a new flat and the many – and often equally tempting – options available on the resale market.
It is a commonly known fact that effective investment in residential property requires a location which meets certain parameters. Fundamentally, the area should have good social infrastructure, availability of adequate public transport and sufficient economic activity to sustain development and growth. The chances of finding a new property that meets all these parameters today are rather slim, since the best locations are already densely developed and often saturated. In such a scenario, looking at the resale market invariably yields some options.
The primary advantage of going in for a resale flat would lie in buying a home in a strategic location where no new supply is coming in. If one has personal cash resources and is not reliant on a home loan, buying a home in a project that is 20 years or more in age can be a good investment, if the property is in a strategic, high demand location with low or no new supply. This would mean that the project would come up for redevelopment, ensuring a tidy profit to the owner.
Documentation & Procedures
All the documents that are applicable for a primary residential property sale would be required for a clear resale flat transaction, as well. The seller should be able to produce all original documents. If the property is to be bought via a home loan, the lending bank would do its own due diligence and establish the availability of all required documentation. However, if the intending buyer is using existing personal funds, it is highly advisable to do so through a lawyer experienced in property transactions.
The buyer should establish the existence of a proper society. The original sale deed and the society share certificate are most important, since the transaction cannot proceed without them. Also, proper transfer and re-registration is necessary.
The documents required for registration apart from the sale deed, include a letter from the society that reflects details such as the number of floors in the building, the construction year, the apartment’s built-up area and the number of lifts in the building.
Also required is an assessment bill to the society from the municipality, a NOC from the Collector if the building exists on Collector’s land, a copy of the property card, and a receipt for the payment of registration fees. In addition, the buyer should ask for a clear ownership history if the property has changed hands before. The local registrar will establish the authenticity of these documents. The challenge here is the possible lack of proper chain of documentation. If the property is over 18-20 years old, it is possible that it was never formally registered in the first place. Registering it at the current point would mean paying stamp duty with arrears.
Is Resale Always Cheaper?
It is commonly assumed that resale properties cost less than units in a new project, or that sellers would be more open to negotiation on the price. However, this is not always the case.
New residential property supply in the larger cities is scarce or non-existent in many central locations. In such areas, there would no a question of discounts on resale properties. Discounts are more prevalent where the market is more competitive. But there is a higher possibility of flexibility in payment terms.