Advantages And Disadvantages Of Buying Resale Properties

Buying Resale Properties

6 mins read

Last updated on 26th March 2024

When the time comes to buy a property, one of the first decisions you'll face is whether to purchase a new construction or a second-hand flat for sale. Resale properties, often referred to as secondary market homes, are pre-owned properties previously lived in by someone else. These can range from flats and apartments to houses and villas. Opting for a resale property can offer numerous benefits, such as charm, character, and potentially lower prices, but there are also downsides to consider, including maintenance issues and outdated designs. From understanding the resale value of flats to navigating the resale home loan process, this post covers all the essentials, presented in an easy-to-understand manner suitable for beginners.

Table of Contents

Advantages of Buying Resale Properties

1. Immediate Availability

One of the primary benefits of purchasing second-hand flats for sale is the immediate availability. Unlike new builds, which may face delays due to construction, resale properties are ready for move-in. This can be particularly advantageous if you’re looking to relocate quickly due to personal or professional reasons. Immediate availability also means you can start personalizing your new home without waiting for construction to complete.

2. Established Neighborhoods

Resale properties are often located in established neighborhoods, which usually means better access to amenities such as schools, hospitals, and shopping centers. These areas also tend to have matured community bonds, offering a sense of belonging and security to new residents. The maturity of these areas offers a sense of community and stability that new developments may need to improve. For homebuyers, this means a better living environment and, often, a more favorable consideration by banks in the resale home loan process due to the perceived lower risk associated with well-established locations.

3. Lower Costs and Better Negotiation Leverage

The resale value of flats can vary greatly depending on several factors, including the property’s condition and how urgently the seller wants to close the deal. This variability can work in the buyer’s favor, providing room for negotiation and potentially leading to a better deal than one might find in the new property market.

4. No GST

In many jurisdictions, buying a resale property means you're exempt from paying Goods and Services Tax (GST), which is typically applicable to new constructions. This can result in significant savings, making resale properties financially attractive. The absence of GST can also simplify the resale home loan process, as the overall cost consideration is straightforward. Additionally, resale properties often have lower property taxes, as they are based on the original value of the property. This can help further reduce the overall cost of the property.

5. Clear Legal Title

Since resale properties have been previously owned, there is a higher likelihood that any legal issues related to the property's title have already been resolved. This provides a layer of security for the buyer, ensuring a smoother transaction.

6. Known Defects

With second-hand flats for sale, what you see is often what you get. Previous owners are usually required to disclose any known defects about the property, giving you a clearer idea of what to expect and the opportunity to factor in the cost of potential repairs before making a purchase decision.

Suggested read: Under Construction Vs. Ready-To-Move-In Property

Disadvantages of Buying Resale Properties

1. Maintenance and Renovation Costs

One of the primary concerns with resale properties is the potential for higher maintenance and renovation costs. Older properties may require significant updates to electrical, plumbing, and heating systems to meet current standards. Additionally, aesthetic updates may be necessary to modernize the property. These renovations can be costly and often need to be financed out of pocket or through a higher home loan amount, which can stretch your budget and increase your debt burden. This is a significant factor to consider, especially if you’re looking at a second-hand house that hasn’t been updated in years.

2. Outdated Design and Layout

Second hand house often come with designs and amenities that may not align with modern preferences or lifestyles. For example, open-plan living spaces, energy-efficient appliances, and smart home technology are standard in new builds but may be absent in older homes. Upgrading these features can be expensive, and while some costs can be incorporated into the home loan, they represent a long-term financial commitment.

3. Less Energy Efficient

Older homes are often less energy-efficient than new builds, which can lead to higher utility bills. This is due to older construction materials and technologies being less effective in insulation or energy conservation. Additionally, older homes often lack modern amenities such as central heating and air conditioning, which can further increase the cost of utilities.

4. Legal and Documentation Complications

The process of buying a resale flat can uncover complex legal and documentation issues. Problems such as unclear property titles, illegal constructions, or encroachments can delay or derail the purchase process. These issues not only complicate the resale home loan process but also pose a risk to the buyer's investment. Ensuring a clean and clear title is paramount, requiring thorough due diligence and potential legal consultation, which can add to the overall cost and complexity of the transaction.

5. Limited Customization

When buying a resale property, you’re essentially purchasing someone else’s vision of a home. Significant changes to suit your preferences can be expensive and may not always be possible due to structural limitations. Additionally, many resale properties come with existing zoning restrictions that may limit your ability to make changes or additions. It's important to consult with a local real estate professional to understand the zoning regulations and any potential costs associated with changing or expanding the property.

6. Hidden Costs

Unexpected costs can arise after the purchase of a resale property. These might include overdue maintenance, necessary repairs not identified during the inspection, or even outstanding taxes and utility bills transferred from the previous owner. Such unforeseen expenses can strain financial resources, especially if the budget is tightly aligned with the home loan and purchase costs. Planning for a contingency fund is crucial but can also limit the buyer's financial flexibility.

Suggested read: Women's Rights to Property in India

Precautions To Consider When Buying a Resale Property

  1. Thorough Inspection: Always conduct a detailed inspection of the property to identify any structural issues or necessary repairs.
  2. Due Diligence: Engage in thorough legal due diligence to ensure the property has a clear title, and there are no outstanding legal issues or encumbrances.
  3. Evaluate Renovation Costs: If the property requires renovation, get an estimate beforehand to avoid unexpected expenses.
  4. Understand the Resale Home Loan Process: Familiarize yourself with the resale home loan process. It's crucial to understand the requirements and prepare the necessary documentation to ensure a smooth loan approval process.
  5. Consider the Resale Value: Keep the resale value of flats in mind. Research the area and the property’s potential appreciation or depreciation over time. This is particularly important if you plan to sell the property in the future.
  6. Hire Professionals: Consider hiring a real estate agent experienced in second-hand flats for sale, as well as a legal advisor, to guide you through the process. Their expertise can help navigate the complexities of buying a resale property.


Buying a resale property has unique advantages and disadvantages that prospective homeowners should consider carefully. From the immediate availability and potential for bargaining to the challenges of maintenance costs and the resale home loan process, it's clear that the decision requires thoughtful consideration. By taking the right precautions, such as conducting thorough inspections and engaging in legal due diligence, you can mitigate many of the risks associated with purchasing a second-hand house.

Remember, whether you’re drawn to the charm and established neighborhoods of resale properties or concerned about potential hidden costs and outdated designs, your decision should align with your personal needs, financial situation, and long-term goals. With the right approach and preparation, buying a resale property can be a rewarding investment, offering a place to call home for years to come.

FAQs about Pros And Cons Of Buying Resale Properties

Purchasing a resale property can offer several tax benefits under Indian tax laws. Buyers are eligible to claim tax deductions on the interest paid on a home loan under Section 24 of the Income Tax Act, up to a limit of INR 2 lakh per annum for a self-occupied property. Additionally, the principal amount repaid is eligible for deduction under Section 80C, up to a limit of INR 1.5 lakh per annum. These benefits apply to loans taken for buying resale properties, making it a financially attractive option for many.

Buying a second-hand house offers immediate possession, allowing buyers to bypass the long waiting periods often associated with new constructions. These properties are usually situated in well-established neighborhoods with ready access to essential services and amenities, presenting a mature, settled environment right from the start. Financially, second-hand houses tend to be more cost-effective, not only in terms of the purchase price—which often allows for more room to negotiate—but also because they are exempt from the Goods and Services Tax (GST), offering additional savings.

No, GST does not apply to the purchase of resale properties. The Goods and Services Tax applies only to the purchase of new constructions from developers. This makes resale properties more financially attractive as buyers can save a significant amount that would otherwise go towards GST.

In India, the responsibility of paying stamp duty typically falls on the buyer of the property. Stamp duty is a legal tax payable as proof for any transaction involving property purchase, and its rate varies from state to state. While the buyer usually pays this cost, the actual terms can be negotiated between the buyer and seller as part of the sale agreement.

Buying resale properties often involves higher maintenance, potential for outdated features, legal and documentation risks, financing challenges due to stricter loan conditions or higher interest rates, and possibly slower appreciation compared to new constructions.

Buying second-hand can be a great decision for many buyers, offering advantages like cost savings, immediate availability, and the charm of established neighborhoods. It can also be more environmentally friendly, as it often requires less energy and resources than new constructions. However, it's important to conduct thorough due diligence, consider potential renovation or maintenance costs, and understand the legalities and financing options involved. With careful planning and consideration, buying second-hand can be a rewarding investment.

Published on 26th March 2024