Choosing between reseller and developer for property purchase
There is no one solution for the dilemma
Dec 14, 2013
Source : The Hindu


DELHI: It is often a tricky situation when one has to decide between a reseller and a developer while purchasing a property. Of course, one must realise that there can never be only one option. It all depends on the deal one is entering into. A purchaser should be alert in this market. Problems and advantages are there in both the options. It is the value-for-money prospect that should be the deal-maker.

Age of Construction

Remember, the age of the property makes a big difference. In the case of a developer, one is lured by the age of the construction. Most purchasers go for newly constructed properties. This is because the problems of old premises such as seepage, repairs and so on are generally not there in new constructions.

However, it should be noted that a person should check with the developer about the building quality and norms, as premises will not remain new forever. Therefore, if the construction material is of lower grade it is possible that deterioration and associated problems will occur much earlier.

Investigate Well

It is advised to take help from some of the existing flat owners of the building, or take a tour of flats that the developer has built earlier. Reseller’s flats are also available in newly constructed properties. These can be flats that were purchased for the purposes of investment, being sold due to financial crisis, or a distressed property.

One should note that if the property is still under construction, it will be at a discounted value in comparison to that of a ready-for-occupation property.

However, in such cases the reputation of the builder and his track record should be verified properly.

Property from a Reseller

This is often considered a good investment option. The basic reason why people go for this alternative is more transparency. It is noted that people may feel out of depth going for new flats or under construction buildings due to uncertainty with the delivery time.

An advantage in a resale property is the ready-to-shift option at a discounted rate.

If the property was taken through a home loan, then it is even more authentic and genuine.

Property from a Developer

This is because proper checks are done by the institutions before transferring the loan funds.

However, there have been instances of loans being disbursed on the same property, numerous times.

Therefore, it is always better that stringent scrutiny is done by the purchaser. Doctrine of Caveat Emptor – let the buyer beware – holds good in the property deals in India. Documentation costs and charges structured by a developer is the most critical exercise. Purchasing a flat from developers requires sound knowledge of the terms and conditions, which are put forth by them. This includes, preference charge (PLC).

PLC is a term, which is used by the developer when a person wants a particular location, floor, or side of the building. This is generally pre-decided and mentioned in documents.

The problem in paying such charges is that, there is no specific regulation, which governs the PLC. It is on the whims and fancies of the developer. The other charges, which a buyer can incur are the car parking and maintenance charges.

Do note, a parking spot in a community living space is part of the common area and cannot be purchased — get absolute clarity on this and such charges before you pay!

The most important thing is to find whether the builder has taken all the clearances of the land.

Agitation from the farmers claiming adequate compensation or a stay order by the court on construction in some parts of the country is a deal-breaker.

It is better to be on the safer side and cross check the documents of either the developer or the reseller, as the case may be.


The hike in the base rate has also increased the home loan rates as well as the input cost of the builders.

As a buyer, you can reap the benefits of negotiation with the developer or property reseller.

Buyers can ask for freebies from the developer and in case of a property reseller, you can demand a clear cut cash discount!

Nowadays there are space constraints close to the city area therefore developers are moving outside the city for new projects and keeping property prices in the range of target buyers.

A property reseller can provide you options close to the city, however price would soar accordingly.

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