Mr. Shetty is weak in handling household chores; therefore Mrs. Shetty takes the lead. But when it comes to take a financial decision which will affect a family of 3 (including baby Shetty) in future, Mr. Shetty is worth getting appreciation. Tired of paying heavy rental rates in Bangalore, Mr.Shetty made an intelligent decision to buy a resale flat near Sarjapur road. Buying a resale flat enabled him not to wait for the construction and shift instantly as it was ready made already. Also it came with high percentage of discount (this brought smile in Mrs. Shetty’s face) that saved money to be utilized for interior decoration (as dreamt by Mrs. Shetty). Now the family is even happier and Mr. Shetty can now flaunt his beautiful home to his colleagues.In an endless hope of falling of prices, a salaried citizen look for options to get the best that would not be a burden on the wallet. From glossy brochures that beguile a buyer to honey-talks of the developer, everything has a hidden bug to bite the buyer. However there are few options that might help to an extent. One of them is resale flats.Resale flats, often offered by developer/seller, come with true discounts. It varies between 5% – 20%, which makes it cheaper than a new flat. The fact is that resale flats are no different from new ones; some of them have not ever been lived in. So why not go for a resale flat if it saves money?Why resale flats come cheap?There can be various reasons why resale flats come cheap.One is that the homes have been bought by an investor at the phase of pre-launch at cheaper rates in a motive to sell it after the 2-3 years when the construction is complete to make a little profit (the rate of a flat after construction is much more than that in pre-launch phase). Most of the times, the investor quotes a lesser price than offered by the developer, making it a wise option for a buyer to go for a resale flat.Generally at pre-launch stage, heavy discount is offered to the buyer hence if after construction, when the prices rock up, an investor sells the flat in a price less than developers’ quoted price then it will be no loss to the seller and eventually a profit for the buyer.There is another case when a buyer is unable to pay the housing EMI and burdened by the heavy interest rates. The only option left is to sell the flat with a small profit (due to appreciation of rates), therefore profiting a buyer.How is it profitable?It’s simple, pay lesser price for a flat which is actually no less than a new one. What more a buyer can expect. Most of the resale flats are almost constructed and gives you the benefit of moving in as soon as you buy it. Also there are no developers’ issues to worry about.Another advantage is the tax benefit you can avail. A tax deduction if Rs 1 lakh on the principal component of EMI under section 80C and tax exemption up to Rs 1.5 lakh by paying interest of home loan under 24B is furnished. However this can be applicable only after the possession of the house.What are the repercussions of buying a resale flat?When you choose a side of a coin, it unintentionally delivers the other part too. There are a few repercussions that could be faced by a buyer of resale flat. As it is generally sold by an individual, the down payment is usually (around 20% and sometimes it is asked in cash too) more than asked by a developer. To fulfill the requirement, the buyer might have to take a small home loan.You have to check the documents of the house in an effort to verify that the seller is the original owner of the house. With all these compulsions, there may arrive additional costs such as registration charges, transfer fee to the housing society and other utility transfer fees. However make sure that the owner has cleared all dues.The other repercussions are minor and easily handled for eg: renovation, society club membership, parking lot charges etc.What to do if the property is mortgaged?If the property is mortgaged with a bank then you should ask the buyer to obtain a letter from the bank stating that it agrees to give up the documents after the full payment of loan. Only after the buyer transfer the full amount to the seller’s account, the bank will release the original documents to the buyer.In case you are opting for home loan then the amount will be directly transferred to the seller’s loan account. As soon as the bank receives payment, it furnishes a no-dues certificate which lets the bank to release the documents.Below is the comparison between the rate of new units and resale units:
| City | Location/Project | New Units (per sq ft) | Resale units (per sq ft) | Discount |
| Mumbai | Kohinoor city, Kurla West | Rs 14,500-17,000 | Rs 13,500-16,100 | 5-7 % |
| Noida | Prateek Wisteria, Mahagun Moderne, IITL | Rs 5,000 | Rs 4,200-4,500 | 10-16 % |
| Gurgaon | Aster court by Orris | Rs 5,000 | Rs 4,100-4,300 | 14-18 % |
| Bangalore | Sarjapur road (Purva Whitehall, Sobha Cinnamon | Rs 5,900 | Rs 5,300 | 11-13 % |
| Bangalore | Yelahanka (NCC meadows phase-2, Prestige Monte Carlo | Rs 4,800 | Rs 4,200 | 11-13 % |
* The discount may vary across projects and individual sellers