New Vs Resale Home is an age-old debate, Taking a call on this debate may be difficult. First home buyers are keen on new homes, but many people still prefer a resale home.
There are lots of new buildings and apartments popping up in the city or suburbs of your place. Suppose if Mr Ram, aged 35, is looking for an investment purpose and can wait for some time, a new house would be better.
Instead, it would be better if it’s easy for him to locate a shop, market, hospital, or other utility services nearby a resale house. If Ram’s need for a home is immediate, it is better to go for a resale home or ready to occupy flats. Other factors determining his requirement would be your lifestyle, budget and repair needs in the future, etc.
Let us chalk out some pros and cons of buying a new vs resale home to help him decide better.
Pros of buying a new home:
- Tailor-made home: The builders gives the opportunity to customize the space according to your interest if you prefer to buy a new apartment. You can derive satisfaction in decorating your home with some leading interior designers as per your preference and taste. Meanwhile, some of the builders also get an opportunity to display their creativity and innovation in a better way.
- Payless for utility bills: Newly built houses are usually energy-efficient constructions and help you save utility bills. Thereby you can effectively manage your energy bills. Modern houses have vinyl windows, better insulation facilities that don’t require frequent cooling of the rooms.
- Less maintenance cost: If you move into a newly built house, you don’t have to spend huge money on maintenance. When you buy a new home, you will get a warranty that will pay for the maintenance costs. So next time when you see water seepage into your building during the rainy season or an air conditioner breakdown during the summer, don’t worry.
Lastly, with RERA in place, under Clause 14(3), builders and developers are liable to fix any structural defects for five years after handing over the possession.
Cons of new home:
- Higher cost: Usually, the customers get attracted to the builders’ display homes due to their elegance. But they will be costlier and will create a hole in your pocket. Furthermore, new homes will drag the budget around 10-20% up compared to the resale homes.
- Possesion time: You can shift to an existing home if your need is immediate. But if it is new construction, you have to wait till it is complete. You can’t be sure whether the new house would be ready within the stipulated time.
Pros of buying resale home:
- Low price: Since it is a pre-held property, in some cases the cost of resale property is a little less. When the seller wants to attract customers to his old building, he will sell it at a lower price. But if you are going to buy an old building- Beware! Check the condition of the building and understand whether the house needs any repair or renovations. Sometimes, you can grab a home with an attractive discount.
- Quality neighbourhood: Since the resale house is located in an already established community, the ambience would be good with lots of mature trees surrounding it.
- Tax benefit: He/She can avail of the exemption from tax up to 1 lakh and tax deduction of 5 lakhs on interest if you buy a resale house. This facility is available on the first monthly instalment you have to pay for the loan.
- Pre-installed facilities: In a pre-owned house, the previous owner would have installed all the amenities such as electricity, gas, water supply, etc. But the buyer has to check for any repairs he has to do before moving in.
Cons of buying a resale home:
- Old wiring and fittings: Before going for a preowned house, thoroughly check for the wiring and fittings. Even if the buyer plans to go for renovation, the money he would have to spend is enormous in the case of an old building. Furthermore, buying a house old than ten years is a bad investment.
- Maintenance would cost your budget: If the previous owner hasn’t maintained the building, the new owner has to shell out a lot of money now. Heavy repairs for an extended time would create a hole in the budget.
- Heavy down payment: When a buyer approaches a financial institution for a loan for a preowned house, they will ask him to pay 20% as a down payment. If he is solely dependent on the loan amount for buying a preowned home, he will find it to arrange a down payment before buying it.
In short, these are the few pros and cons Mr Ram has to weigh before finalizing on a new vs resale home. Now if you’re in a similar situation analyse your requirements and finances before you take a call and be confident about your decision.