Buyer Guide: What to Buy? Fresh booking vs Resale

Buying real estate is no cake-walk. The decision from whom to buy a home is as important as timing the purchase. While booking a property, you may have to choose between buying a fresh unit from a developer and buying from an owner - essentially known as the primary and secondary markets, respectively. Both have their advantages and disadvantages and you must make an informed decision based on the nuances involved in each of these options.

Advantages:

Fresh Booking (Primary Market)

An under-construction fresh unit may allow you to get customised payment plans, most popular being the construction linked plan. The ease of payment is the biggest advantage of buying an under-construction unit from a developer.
Since the unit is new and unused, you will not have to worry about the chipping paint or nail holes. You can make changes to your unit from scratch.
Post the implementation of RERA on 1 May, 2017, all under-construction and new units are mandated to be registered under RERA. Buying a fresh property will ensure transparency of information and transactions. Moreover, the Appellate Tribunal under RERA will also protect your interest in case of delay or default from the developer’s end.

Resale (Secondary) Market

During market slowdown, you have the power of negotiation and may end up getting handsome discounts in the secondary market. Investors may slash rates in order to make desperate attempts of exiting real estate. Even genuine sellers could cut prices in order to percolate the developer’s market.
Ready-to-move options are more easily available in the resale market. You could purchase an apartment which is close to possession and occupy it within a few months.

Disadvantages:

Fresh Booking (Primary Market)

Booking an under-construction fresh unit comes with the risk of delayed possession. Though RERA ensures safety of homebuyers, you may end up paying both EMI and rent in case of a project delay.
Buying in the primary market would attract Goods and Services Tax (GST) of five percent of the total cost of property. You would be spared of this levy in case of a ready resale property.

Resale (Secondary) Market

The secondary market usually requires a lump-sum payment, or a few installments over a short period of time. Arranging for immediate and hefty down payment could become a challenge for you.
Involvement of a broker in a resale deal could also mean additional expenditure for you. Brokers usually charge a fee equivalent to 1-2 percent of the total transaction value.
Older properties with Occupation Certificate as on May 1, 2017, are excluded from the ambit of RERA, thus making them a risky real estate investment.
Some developers charge a Transfer Fee* on resale of a property.

*Developers charge a Transfer Fee to handover the ownership of property from the first buyer to the next. It usually ranges between Rs 200-1000 per sq ft.

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