Are you in a dilemma about whether to buy a new home or opt for a resale home? Well, this is an old-age debate that will never conclude. There are buyers who speak volumes about buying a new home, whereas others advocate buying a resale home. Therefore, this is purely an opinionated question; however, our experts suggest considering your lifestyle, financing needs, and priorities that top your goal chart to help you decide between a new home and a resale home.
Here are the top 5 things you need to consider before deciding whether to opt for a new house or a resale house:
Location, age, and amenities
While planning to buy a new house or a resale house, you must consider these three aspects: location, age, and amenities. Now, there are high chances you may not get all three of these things in one property. For example, if you opt for a new home, the location you like is already developed, so the properties you will find there will be resale properties. If you choose the resale home considering the location of your choice, you will end up compromising on the age and amenities of the property that you may enjoy in the new home. If, in fact, you are fortunate enough to find one, it would be the costliest investment. Therefore, you must consider each and every aspect of the property to decide between the new home and the resale home.
Repairing the wear and tear
If you are looking for a property that requires minimum alteration and repair, then you should go for a new home, as they are newly constructed and would require no repairs. However, if you decide to buy a resale home, you need to repair the property's wear and tear to make it ready to occupy. You might also have to get the interiors done, including painting, kitchen remodeling, flooring, a roof, etc. There are high chances of you bearing the repair or replacement cost of the electrical fittings as well, such as the geyser, air conditioner, etc. Hence, it would be a wise choice to choose a new home over a resale home.
Safety and Privacy
Nowadays, developers are building luxurious high-rise apartments where safety and privacy are one of the top three amenities that developers highlight in every project. In order to cater to this need, you will find sophisticated fire retardants, hard-wired smoke and carbon monoxide detectors, CCTVC cameras, etc., in new and modern homes. However, you may not find such amenities in the resale home property. Modern and new homes also come with a generator backup provided by the builder, whereas in the case of a resale home, you will have to get your personal invertor installed for the usage.
There are a plethora of financing options available for new homes with at least 90–99% home loan assistance. This makes the homebuying journey hassle-free; however, the same may not be applicable in the case of buying a resale property. Resale properties come with limited financing options as the age of the property is on the higher side. Yes, you read that right! The age of the property matters when making an application for a home loan. The older the property is, the lower will be the sanctioned home loan amount with a higher rate of interest. Hence, it would be a wise decision to avoid buying a resale property through a home loan and finance it independently.
Real estate never depreciates; however, you should consider the returns that you may get from selling the property. Well, that ‘return’ in layman's language is something we call as resale value, which you can expect from your property when it is sold in the future. Now, if you decide to buy a home and plan to sell it off after a few years, the asking price can go up to 5-7%, based on the price at which the property was bought, considering the market price in the said location. So, if you decide to buy a new home that costs you around 50 lakhs now, you may expect the property price to be between 53 - 55 lakhs after 4-5 years, excluding the alterations you made to the property during your stay.
On the other hand, if you decide to buy a 20-year-old property at a price between 40 - 50 lakhs with no amenities and plan to sell it off after 5 years, it would be a challenging task, as the new home that is just 5 years old would be more demanding and desirable than the 25-year-old property, which costs the same. Therefore, understanding the crux of real estate is important in the buying and selling process.
For more details, read our blog on Renting vs Owning a Home. Should you have any queries, connect with our relationship managers. They will take you through the entire home-buying journey, explaining the legalities of purchasing a home.