Purchasing resale property can be a lucrative option for investors and meet their budget requirements. Not only is resale property a cheaper option, it also allows more room for negotiation and customisation. However, there are several aspects that need consideration before you take a call. So if you have decided to invest in resale property, here is a concise checklist of some essential things you should keep in mind while purchasing.
See also: Key legal checklist for buying a property
Legal due diligenceÂ
While buying a resale property, make sure to go through the title deed carefully. Complete information about the ownership history of the property and existing encumbrances is essential to avoid problems in the future. Also check the local zoning laws to make sure that it is legally allowed to use the property for the purpose it is intended for.
Physical inspection
Evaluate the property for any structural damage or wear to the foundation, walls and roof. It is also important to verify that the wiring and plumbing systems adhere to the safety standards. This step becomes crucial during addressing potential problems that might arise.
Documentation
Verifying just the title deed is not enough. While considering resale property, there are other documents that need to be in place. One such important document is the occupancy certificate, which certifies that the building adheres to the local regulations and is safe for habitation. Another certificate you should not forget to inquire about is the khata certificate. This document is the verification of the property’s existence in the revenue records.
Seller verification
Verify the seller’s identity by asking for a government-approved identification proof. If the property is being sold on the owner’s behalf, it is crucial to check the authenticity of the power of attorney.
Market research
Before taking a call, do thorough research of the fair market value by looking into the recent sales of other properties in the same area. Also look into the upcoming infrastructural developments in the vicinity that can have an impact on the value of the property.
Home loan eligibilityÂ
If applying for a loan, it is crucial that your credit score meets the lender’s criteria. You will also need to have a detailed understanding of the loan-to-value ratio, that is the maximum amount you can borrow with respect to the value of the property.
Negotiation
One key benefit of investing in a resale property is the freedom of negotiation that would not have been available otherwise. Don’t forget to double check the things included in the sale so that you can negotiate accordingly. For greater convenience of dealings, include contingencies in the agreement that allow the space to renegotiate or withdraw according to the inspection of the findings.
Age of the property
The age of the property is the prime consideration while investing in resale property since it gives insight to its condition. Try to obtain the maintenance records of the property to understand the status of its upkeep over the years. Verify complete information about the renovations made and the major repairs that the property has undergone to fully understand its condition.
Community and neighbourhood
Check if the property provides easy access to amenities in the vicinity such as such as school, hospitals and recreation centres. Also check with the authorities of any future developmental projects that might have an impact on the location.
Appreciation trends
Go through past trends of property values to evaluate the potential of appreciation in future. Economic indicators such as employment availability and infrastructural development must be considered while analysing the appreciation.
Payment structure
While setting a budget, it is important to consider hidden costs such as property taxes or maintenance costs to avoid discrepancies and misunderstandings later. Keep strict tabs on the payment schedule and deadlines to avoid extra costs on fines and penalties.
Read also: Fresh booking vs resale: Which one is better for real estate investment?
FAQs
What documents should I ask for from the seller of resale property during the transaction?
Request the seller for documents like sale deed, title deed, property tax receipts, occupancy certificate and khata certificate, alongside the seller's own ID proof and latest utility bills.
How can I verify the authenticity of the property's title and the absence of legal disputes?
It is recommended to hire a legal expert to check the records to confirm ownership and check for pending litigations.
What should I keep in mind when inspecting the physical condition of resale property?
Check for any signs of structural damage, the overall maintenance of the property and the electrical and plumbing systems.
How do I determine the fair market value of resale property?
To determine fair market value, research the recent sales of similar properties and their condition at the time of sale. You can also consider consulting real estate agents or appraisers for more detailed information.
How can I determine my eligibility for a home loan?
To determine if a loan scheme is right for you, check your credit score, evaluate the loan-to-value ratio and inquire about your eligibility with financial institutions. Make sure you have a thorough understanding of the interest rate and repayment conditions.
Is it necessary to hire a real estate lawyer during the transaction?
Although not necessary, it is advisable to hire a real estate lawyer for accurate review of legal documents and a legally smooth transaction.
What should I consider about the neighbourhood and community while buying resale property?
Amenities, safety, accessibility and potential future developments in the area should be considered. Also check the community regulations for any restrictions and the welfare associations fees.
| Got any questions or point of view on our article? We would love to hear from you. Write to our Editor-in-Chief Jhumur Ghosh at jhumur.ghosh1@housing.com |
