How to buy a resale property?

Buying a home is anybody’s dream and those who achieve this without much hassle, are the luckiest lot. While buying new or old property, there are certain procedures should be followed to ascertain the genuineness of the documents supplied by the seller. Unlike new property, where we can, to certain extent, go by the reputation of the builders or developers, buying old properties involve more risks and depends entirely on the buyers’ knowledge to check the veracity of facts written in the documents. 

There are a million things to look into when one chooses to go for resale property. In Tamil there is a pro-verb saying “both buying or building a home and marrying off one’s daughter, are the daunting tasks on earth.’  

There are three things one should look into when decide to buy a second-hand property – selecting a good advocate who has good reputation of checking property papers, checking the structural strength of the building by engaging a structural engineer and before finalizing the deal, one should make a building survey to understand the cost of repair or renovation work and cost involved.

Choosing a lawyer

It is always better to go by the popularity or through referral while choosing an advocate. “I have to check a property - a land on the outskirts - as I was not sure about the genuineness of it. I wanted to consult an advocate. As I did not know any one, I asked my colleague who has recently purchased a 10-year-old flat and consulted a lawyer to check the papers. He, not only gave proper advice, also educated me what to check while buying a non-approved land from promoters,” said Ramkey, an IT engineer from Chennai.  

Resale real estate market is full of cases where a single property is sold to multiple buyers at the same time. For this it is advisable to run a check on the property title before enter into an agreement. Hiring of reputed or genuine property lawyer who could check records of the past 12 years verifying the authenticity of the seller is a prudent move. 

The charges for checking the property papers run between Rs. 5,000 to Rs. 15,000. The lawyer should give their observation in writing and also help complete other paperwork related to property registration and stamp duty.

Repair or renovation cost

Generally flat or home as old as five years will not have much repair work as compared to the one which is ten years ole. However, rarely one would find a resale property that does not need some amount of renovation work as buyers always feel that the property should be make according to their taste and style. There could be a leaky roof, or pealing paint that needs to be fixed. At times, the buyer may need to renovate the entire house, from scratch. So deciding the cost factor before going in for the deal would be ideal. This will avoid last minute tension and heart-burn.

Engage structural engineer

It’s a belief that old buildings are always strong compared to the new buildings. But one should make sure that the flat he is purchasing is built on a strong foundation and free from any structural defects. Resale properties may look strong from outside, only a technical expert like a structural engineer would be able to confirm its stability. 

Keep in mind that getting a good report card from the structural engineer is important, especially if you are taking a loan to fund the property purchase, this will help the bank to sanction the loan faster.  Usually, the lender ensures that it recovers this cost somewhere or the other via your loan. If one plans to buy the property with own funds, he or she will have to pay for this survey cost out of their own pocket.

Checking for dues

Checking for dues, if any, is a small but important checking process. Check all documents are on the seller’s name and that he has paid all the bills. These could be electricity charges, water tax, property tax, society charges, parking space charges and the like. If the previous owner hasn’t paid any of these bills, the buyers have no option but to settle the same once the house is sold and name change happened.

Other costs

Some residents’ associations charge a hefty sum to transfer the ownership of a property. So do include this cost as well. The real estate agent who helped you to locate the property will need to be paid once the entire transaction has gone through. One should enquire the market rate of commission before settling the account. This could be a percentage of the buying price of the property.