Purchasing a flat for the first time in Pune can be quite a daunting endeavor, especially if you’re navigating it solo. Various elements must be carefully evaluated, such as price, location, the burden of EMI, nearby amenities, and the distance from your workplace. It can be quite perplexing to predict the transformation of an area over time. Developers often try to convince buyers that every neighborhood is brimming with potential, boasting future additions like six new schools and various tech parks. They project that acquiring a home in these ‘promising’ areas entails negligible risk!
However, uncertainty looms large for prospective homebuyers. Frequently, infrastructure projects drag on indefinitely; new tech parks may never materialize, and the roads often succumb to flooding. This renders the notion of investing in an “up and coming” locality counterproductive.
At this juncture, purchasing an off-market flat emerges as a rational option. A resale property refers to a flat where the seller is an individual homeowner rather than a developer; they have typically lived in or leased the property and are now contemplating its sale. Many potential buyers are apprehensive about investing in a resale flat in Pune, fearing that it may hide a multitude of issues. While there are methods to tackle these fears, let’s delve into the pros and cons of buying a resale flat in Pune.
Advantages of Purchasing a Resale Flat in Pune
Resale properties tend to be more financially advantageous when it comes to buying a move-in-ready home, predominantly due to several factors including the age of the property, the cost of the asset, depreciation rates, potential renovations needed, and more. The benefits of acquiring a resale apartment are numerous, irrespective of your motivation.
Tax Savings
Purchasing a resale flat in Pune can afford you greater tax savings. According to the Income Tax Act (specifically Section 80C), a tax exemption of up to Rs. 1 lakh is available for principal EMI. Additionally, you can benefit from a tax deduction on home loan interest of up to Rs. 5 lakh as per Section 24B.
Immediate Move-In
No need to endure delays while waiting for the construction of the building to conclude or fret over setting up your utilities such as internet, cable, and gas. These amenities are typically already in place. Previous owners usually leave behind nearly all the essentials you need, enabling a seamless transition into your new home.
Favorable Locations
Older homes often occupy well-established neighborhoods within the city. Newer apartments, on the other hand, might be positioned on the city outskirts or in newly developing sectors. These mature locations are intentionally designed and are likely to have all the conveniences you could ask for in close proximity.
Disadvantages of Purchasing a Resale Flat in Pune
One significant drawback of resale apartments is their limited potential for appreciation. In contrast to newly built apartments, resale options often experience slower value growth in their initial years. When opting for a resale flat in Pune, buyers often pay a premium for this perceived value! However, the primary focus for many is the ability to move in and genuinely start their lives in the apartment.
Key Considerations Before Buying a Resale Flat in Pune
When contemplating the purchase of a resale apartment, several critical factors warrant your attention:
Rules and Regulations
When buying a flat in a given society, there will always be a governing association dictating regulations. Confirm what alterations are permissible in the property you’re considering. Some societies have rules regarding the nature of renovations allowed and the timeframe for such work.
Down Payment and Insurance
Buyers should be cognizant that insurance payouts may not be as substantial as those on new constructions. Resale properties typically require a down payment of at least 20%, which is steeper than what is demanded for new homes.
Outstanding Dues
An important aspect to investigate is any pending payments that the current owners might still owe. For instance, unpaid utility bills or maintenance fees could be liabilities that you may inherit. In some instances, owners may be hesitant to disclose this information.
Property Age
Asking yourself, when is a property considered too old? Generally, avoid properties that are older than 40 to 50 years. By this age, significant structural issues may have developed, necessitating costly renovations and repairs.
Essential Documents Required for Resale Flat Purchase in Pune
Acquiring a house, whether a flat, apartment, or villa, mandates certain essential documents. When considering a resale flat, ensure you obtain the following documentation during the registration process:
- The sales deed is the principal legal document.
- The building plan confirms whether the structure has the necessary approvals.
- The occupancy certificate indicates that the property is suitable for habitation.
- Certificate of Encumbrance ensures there are no liabilities attached to the house.
- Tax Receipts confirming there are no outstanding payments.
- Access to all previously registered agreements under the Mutation Deed.
- NOC: Certificate of No Objection.
- A Possession Certificate from the builder to the previous owner and then to you.
Financial Charges When Purchasing a Resale Flat in Pune
In most cases, banks do not take into account stamp duty and registration fees when a resale flat is being bought. Generally, stamp duty on a resale property oscillates around 5% of the total transaction value along with a registration fee of Rs. 30,000/-.
While engaging the right professionals to assist in this process might initially seem like an extraneous expense, neglecting these fundamentals may result in even greater costs down the line.