Buying a resale flat in Hyderabad: Here’s what buyers should know

Hyderabad’s residential market is in a growth phase, as the city’s bustling IT hubs continue to attract homebuyers, driving steady demand for properties. Although the city has seen a growth in new launches, many buyers also prefer investing in resale properties, especially in well-developed central areas, owing to the location advantages and affordable prices. Resale homes are either sold by primary owners or investors and buying these properties offers more flexibility to buyers in terms of payment. At the same time, investment in resale properties requires proper due diligence to mitigate risks arising from ownership disputes, structural issues, resale prospects, etc. Resale flats may be an ideal choice for investors looking to expand their portfolios or for end-users seeking a comfortable lifestyle in a well-developed central locality. Here’s a guide for property buyers looking to buy a resale flat in Hyderabad.

Benefits of investing in resale flats in Hyderabad 

• Affordable rates: Typically, the prices of newly launched flats are higher than those of resale flats. Moreover, Goods and Services Tax (GST) are levied on under-construction flats but not on ready-to-move-in flats. So, resale property purchase costs are quite affordable.
• Immediate possession: Resale flats, unlike under-construction properties, allow buyers to move in immediately. This is beneficial as it saves them the costs of rent when they already have home loan EMIs to pay.
• Well-developed location: Resale flats are most likely located in developed localities with infrastructure such as schools, hospitals and public transport, including metro connectivity. On the other hand, new launches tend to be in the city’s outskirts, with limited facilities.  
• Buyer’s advantages: In a resale market, buyers have a greater scope for price negotiation based on a property’s age or the seller’s position, whereas new flats have prices fixed by builders. The property’s construction quality and condition have already been verified in resale flats.
• Resale potential: Well-maintained properties in established neighbourhoods continue to attract buyers, increasing the property’s resale value.

Important points to consider before buying a resale flat

Age and property condition

Older properties may have limited features and facilities. They are likely to have old-style construction, outdated lifts or plumbing systems, and the possibility of structural issues. So, the buyer may incur high costs due to maintenance and making upgrades to the property. Moreover, a building’s value depreciates over the years, reducing its resale potential. Investing in a building that has high redevelopment potential may be advantageous. An upgraded property in an established locality is much more affordable than investing in a brand-new property in an emerging area.

Location

Buyers are likely to find resale homes in developed localities in Hyderabad. Before purchasing a flat, one should look at the neighbourhood to ensure good connectivity, civic amenities, and facilities such as schools, hospitals, and banks. It is also necessary to check if offices and commercial hubs are easily accessible. Properties located close to upcoming infrastructure developments, such as metro projects, see higher price appreciation and rental yields. Thus, it is important to choose a property that is strategically located. Miyapur, Kondapur, Kukatpally, and Madhapur are popular localities known for their proximity to employment hubs. 

With several IT hubs in Hyderabad, demand mostly comes from working professionals and families. Modern buyers seek gated community living with numerous amenities. When buying a resale apartment, buyers must check whether essential facilities such as advanced security systems, parking spaces, power backup, and water supply are available, as well as lifestyle amenities like swimming pools, gyms, etc. Before finalising a property, check if these facilities are well-maintained. 

Market research

Understanding the local market and current trends will enable buyers to make better purchase decisions and minimise risks. Property prices are influenced by various factors, including supply and demand dynamics. Keeping track of the property market enables buyers find out about emerging areas and predict future appreciation. Buyers get a proper property valuation done. This will help them understand whether the seller’s asking price is in line with market rates and offers a fair deal.

Legal checks

Legal due diligence is crucial when purchasing a property, especially a resale house. Since the property has changed hands in the past, verifying the complete ownership history ensures there are no disputes, encroachments, unpaid dues or historical claims that could pose problems in future. In simple terms, the resale house one plans to purchase should have a clear title. It is also necessary to ascertain whether the building is constructed on legally approved land and whether the layout complies with the sanctioned building plan. One should avoid investing in unauthorised colonies where documents such as completion certificates are not in place. 

Home loan

Most banks and lending institutions offer home loans for resale properties. However, buyers should be aware that the approved loan amount and other terms will depend on factors such as the property’s age, condition, and amenities. Most lending institutions finance resale properties that are less than 20-25 years old. Older properties may attract interest rates or lower loan-to-value ratios.

Documents to check when buying a resale property 

All the documents required during the primary sale of a property are also required when buying a resale property. Here are some essential documents required during the purchase of a resale property:

• Sale deed: This document serves as proof of the sale and transfer of ownership from the seller (or developer) to the buyer. 
• Mother deed: This document provides the complete ownership history and establishes that the current owner has clear, undisputed title to the property. This is also required when applying for a home loan.
• The Sale and Purchase Agreement: This is an agreement between the buyer and the seller, outlining the terms of the sale, such as the agreed-upon price, payment schedules, possession dates, and the type of property.
• Society NOC: The seller should provide a NOC from the housing society stating that the society has no objection to the sale and that all dues have been cleared.
• Encumbrance certificate: This document, issued by the Registration and Stamps Department of Telangana, certifies that the property is free from mortgages, loans or legal disputes.
• Occupancy/completion certificate: This certificate establishes that the structure has been constructed as per approved plans and is legally fit for occupation.
• Building Approval Plan: This helps verify whether construction was carried out in accordance with relevant approvals from authorities and in compliance with building bylaws and other regulations.
• Possession letter: This document is issued by the developer to the first owner and is not reissued in the case of resale. Buyers should get the possession letter from the seller.
• Mutation certificate: It is a legal document that records a change in property ownership in government records. Buyers should get a copy of the previously registered agreements.
• Documents in case of mortgaged property: In case there is an ongoing loan on the property, the current owner should give an undertaking to the bank that they have agreed to give property documents to the buyer upon the home loan foreclosure. 
• RERA registration details (if applicable): Buyers should verify the project’s RERA details on the Telangana RERA website.
• Property tax receipts and utility bills: Buyers should request these documents to verify that all dues have been cleared by the seller.

How to buy a resale flat in Hyderabad?

• Search and shortlist properties: Set your budget and preferred location for the resale home based on your needs, such as proximity to your workplace, family size, etc. Buyers can take the help of an online property portal to make their home search easier and shortlist properties.
• Conduct site inspection: Fix meetings with the seller and undertake site visits. This is the crucial stage where they can check if the flat meets their requirements and identify red flags. Talk to neighbours and people in the area to find more details about the locality. 
• Complete valuation and document verification: Estimate the property’s market value to prepare for negotiations. Check all the documents, including ownership, encumbrance and tax records. Make sure to ask the property’s age.
• Negotiate price: Ask key questions to the seller to find out any potential issues. Make sure to have a fair knowledge of the average sale prices and the property’s condition compared to similar properties in the area.
• Draft sale agreement: After both parties have agreed to the terms, complete the sale agreement by including the payment schedule, possession date and conditions of sale.
• Apply for home loan (if applicable): Most lenders offer home loans for resale flats and approve the amount after thorough due diligence. As a buyer, make sure to check the home loan interest rates and compare the best offers.
• Complete registration process: Visit the nearest sub-registrar’s office to complete the property registration process. Check the stamp duty and registration charges in Hyderabad and pay the relevant fee.

Resale property prices in Hyderabad

The average property rates in Hyderabad are Rs 7,727 per sqft. Property prices in Hyderabad are much affordable compared to other metropolitan cities. However, with rapidly expanding infrastructure and booming IT hubs, prices continue to rise due to high demand. Some affordable, well-established localities where one can find resale flats include Miyapur, Manikonda, Begumpet, and Ameerpet. If you are looking for properties in the luxury segment with a starting price of Rs 1 crore, upscale localities such as Banjara Hills and Jubilee Hills may offer ample options.

Costs involved in buying a resale flat in Hyderabad

A buyer incurs various hidden charges besides the basic purchase costs of the property. These high charges include:

• Stamp duty and registration charges: In Telangana, property buyers have to pay stamp duty of 5.5% of the property’s market value or sale consideration, whichever is higher. Transfer duty of 1.5% on the property value and registration fee of 0.5% are applicable.
• Brokerage fees: If you have approached a broker for buying the house, the fee may range anywhere between 1% to 2% of the property value.
• Legal fees: Hiring professional services for legal due-diligence, document verification and sale deed drafting may incur significant costs.
• Home loan processing fees: Buyers must take into account the home loan processing costs and down payments made for the purchase.
• Society transfer charges: There are charges payable to the housing society for updating ownership records.
• Renovation or repair costs: Typically, resale flats may require minor or major repair works, which can lead to additional costs for the buyer.

Housing.com News Viewpoint

Purchasing a resale flat in Hyderabad can be a profitable investment for homebuyers. It is better to approach the process with caution than to rush, which can lead to costly mistakes. Some common things most buyers tend to overlook when buying resale flats are document verification, checking RERA status and estimating hidden costs. One should also check the property’s age to gauge its future resale potential before finalising the deal.

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