Fresh Purchase vs Resale Property Advantages and disadvantages
Are you planning to buy a house and are confused about booking a fresh property or purchasing a resale house? Buying a home requires a lot of research and considering several contributing facts. While both options have several benefits, there are some side effects that come along. PropTmart lists the advantages and disadvantages of fresh and resale properties to help you make an informed decision.
Buying real estate is no cake-walk. The decision from whom to buy a home is as important as timing the purchase. While booking a property, you may have to choose between buying a fresh unit from a developer and buying from an owner – essentially known as the primary and secondary markets, respectively. Both have their advantages and disadvantages and you must make an informed decision based on the nuances involved in each of these options.
Advantages Fresh Purchase Property:-
An under-construction fresh unit may allow you to get customized payment plans, most popular being the construction linked plan. The ease of payment is the biggest advantage of buying an under-construction unit from a developer.
Since the unit is new and unused, you will not have to worry about the chipping paint or nail holes. You can make changes to your unit from scratch.
Post the implementation of RERA on 1 May, 2017, all under-construction and new units are mandated to be registered under RERA. Buying a fresh property will ensure transparency of information and transactions. Moreover, the Appellate Tribunal under RERA will also protect your interest in case of delay or default from the developer’s end.
Advantages of Resale Properties:-
During market slowdown, you have the power of negotiation and may end up getting handsome discounts in the secondary market. Investors may slash rates in order to make desperate attempts of exiting real estate. Even genuine sellers could cut prices in order to percolate the developer’s market.
Ready-to-move options are more easily available in the resale market. You could purchase an apartment which is close to possession and occupy it within a few months.
Disadvantages Fresh Purchase Property:-
Booking an under-construction fresh unit comes with the risk of delayed possession. Though RERA ensures safety of homebuyers, you may end up paying both EMI and rent in case of a project delay.
Buying in the primary market would attract Goods and Services Tax (GST) of five percent of the total cost of property. You would be spared of this levy in case of a ready resale property.
Disadvantages Resale Property:-
The secondary market usually requires a lump-sum payment, or a few installments over a short period of time. Arranging for immediate and hefty down payment could become a challenge for you.
Involvement of a broker in a resale deal could also mean additional expenditure for you. Brokers usually charge a fee equivalent to 1-2 percent of the total transaction value.
Older properties with Occupation Certificate as on May 1, 2017, are excluded from the ambit of RERA, thus making them a risky real estate investment.
Some developers charge a Transfer Fee* on resale of a property.
*Developers charge a Transfer Fee to handover the ownership of property from the first buyer to the next. It usually ranges between Rs 200-1000 per sq ft.
We strongly advise to consult local property dealer and doing a thorough market research prior to investing in real estate to make an informed decision.
Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. PropTmart does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.
Fresh Purchase vs Resale Property Advantages and disadvantages
Are you planning to buy a house and are confused about booking a fresh property or purchasing a resale house? Buying a home requires a lot of research and considering several contributing facts. While both options have several benefits, there are some side effects that come along. PropTmart lists the advantages and disadvantages of fresh and resale properties to help you make an informed decision.
Buying real estate is no cake-walk. The decision from whom to buy a home is as important as timing the purchase. While booking a property, you may have to choose between buying a fresh unit from a developer and buying from an owner – essentially known as the primary and secondary markets, respectively. Both have their advantages and disadvantages and you must make an informed decision based on the nuances involved in each of these options.
Advantages Fresh Purchase Property:-
An under-construction fresh unit may allow you to get customized payment plans, most popular being the construction linked plan. The ease of payment is the biggest advantage of buying an under-construction unit from a developer.
Since the unit is new and unused, you will not have to worry about the chipping paint or nail holes. You can make changes to your unit from scratch.
Post the implementation of RERA on 1 May, 2017, all under-construction and new units are mandated to be registered under RERA. Buying a fresh property will ensure transparency of information and transactions. Moreover, the Appellate Tribunal under RERA will also protect your interest in case of delay or default from the developer’s end.
Advantages of Resale Properties:-
During market slowdown, you have the power of negotiation and may end up getting handsome discounts in the secondary market. Investors may slash rates in order to make desperate attempts of exiting real estate. Even genuine sellers could cut prices in order to percolate the developer’s market.
Ready-to-move options are more easily available in the resale market. You could purchase an apartment which is close to possession and occupy it within a few months.
Disadvantages Fresh Purchase Property:-
Booking an under-construction fresh unit comes with the risk of delayed possession. Though RERA ensures safety of homebuyers, you may end up paying both EMI and rent in case of a project delay.
Buying in the primary market would attract Goods and Services Tax (GST) of five percent of the total cost of property. You would be spared of this levy in case of a ready resale property.
Disadvantages Resale Property:-
The secondary market usually requires a lump-sum payment, or a few installments over a short period of time. Arranging for immediate and hefty down payment could become a challenge for you.
Involvement of a broker in a resale deal could also mean additional expenditure for you. Brokers usually charge a fee equivalent to 1-2 percent of the total transaction value.
Older properties with Occupation Certificate as on May 1, 2017, are excluded from the ambit of RERA, thus making them a risky real estate investment.
Some developers charge a Transfer Fee* on resale of a property.
*Developers charge a Transfer Fee to handover the ownership of property from the first buyer to the next. It usually ranges between Rs 200-1000 per sq ft.
We strongly advise to consult local property dealer and doing a thorough market research prior to investing in real estate to make an informed decision.
Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. PropTmart does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.