Resale Risks and Rewards (RRR)

 

The allure of established neighbourhoods makes resale 

homes attractive.  But is it really worth the purchase?

Lower property prices, old world charm, established neighbourhoods and sound social infrastructure are all the perks that the secondary real estate market, popularly known as the resale market, offers.  Buyers are often drawn to these homes as they are generally at a lower price point as compared to new projects.

However, duality is the nature of life.  While homebuyers are able to save on the upfront cost of housing, old homes typically need some maintenance and that could add up to the total cost of the purchase.  So, if you are contemplating whether purchasing a resale home aligns with your needs, here is a detailed breakdown of its benefits and drawbacks.

PROS OF BUYING A RESALE HOME 

Ready to move into established neighbourhoods 

One of the biggest advantages of buying a resale house is that you get to buy your home in an already habitable locality.  In key metro cities, there are limited new projects in prime areas, making resale homes ideal for both, in terms of cost and options.  “Resale homes also benefit from superior connectivity, robust infrastructure, and vibrant community, making them attractive to end-users and investors seeking long-term capital appreciation.

Price negotiation

There is more room to negotiate especially if the seller is motivated and in urgent need of money.  The price can be negotiated on various factors such as the condition of the house or the wide range of similar options available in the market.

Unique character and style

Many resale homes, especially older ones, feature a unique architectural style and details that stand out from modern designs which may often seem identical or monotonous.  This charm can make your home feel more unique and personal.

“Mostly older apartments have a better built-up to carpet area efficiency.  One can also physically inspect the house to determine quality, size, and amenities to decide to whether to go for the house or not.”

CONS OF BUYING A RESALE HOME

Extensive repair cost

“ There is a possibility that the resale flat needs extensive repair because of its old age and / or quality of construction.  Besides the extra cost disadvantage, the repair could prove to be more tedious on the buyer”.  Common issues in such resale homes often include ageing roofs, outdated plumbing, and structural problems.

Outdated design

A resale house may have a unique architectural style and an old world charm but the design might be outdated and not as functional if you wish to live in modern homes with modern amenities.  For e.g., older homes might not have modern insulation and energy-efficient windows, etc.  This can lead to higher utility bills compared to newer homes built with energy efficiency in mind.

Lack of customisation opportunities

In an upcoming under-construction project, you have the option of requesting the developer to change the layout of the home (if permissible).  Resale homes deny you the scope of customisation; any such modification and translates into additional time and money.

No Builder warranty

When you buy a newly built home, you usually get a five-year warranty that covers any structural issues.  Older properties lack such warranties, necessitating a comprehensive inspection to uncover potential hidden issues.

“Getting home insurance for a resale property can be tricky since insurers usually shy away from covering older homes.  On top of that, sellers often ask for a good chunk of the payment in cash, this can be a problem for buyers, especially if they’re taking a home loan.”