Part I: Should you buy a new or a resale flat?
Nov 22, 2013
Source : The Times of India

 

MUMBAI: Should you buy a new flat or a resale? There appears to be no easy answer to this question. People buy resale flats instead of new ones for various reasons. Sometimes, a certain location just does not offer suitable options in the primary market.

At other times, buyers do not do enough research and are unaware of the availability of very good new projects. Or they succumb to the pressure tactics of a persistent real estate brokers and buy a resale flat when a new one was available in an excellent location, and within their financial reach. Or they believe that a serviceable flat available at a slightly lower price is always a good bargain.

Most often, people buy resale flats because they are in a hurry and want immediate possession. This renders them unwilling to opt for a flat in a project which is under construction, even if completion and possession are only a few months in the future.

Because real estate is an eminently re-sellable asset, many people put perfectly acceptable flats on the market after a few years of use because they want to upgrade. This fact makes the market for resale flats almost as big as the primary market. However, this does not mean that resale flats and new apartments fall in the same value chain.

Assuming that a buyer learns of both new and resale options in the location of choice, it is important to understand the benefits of opting for the former:

• A home, both as an asset and a possession, is very much like a car – neither offers the same value or experience when it is second-hand. The feel of a used home or car cannot match that of a brand-new version, simply because it has already passed through the hands of one or more owners. It is true that this is something of an intangible psychological factor – but it is nevertheless very real.

• Assuming that one has bought it from a reputable developer, a first-sale flat has newer fixtures and fittings that come with a minimum guarantee of problem-free performance. Nor is wear and tear the only problem with older fixtures and fittings – like in the case of most other products, there is also a question of product generation. To illustrate – a first-generation iPhone cannot perform with the same speed, efficiency and reliability as a first-generation one.

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