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Key Tips for Buying an Old Apartment

Buying a property is one of the biggest investments that you can make in your lifetime. Hence, you need to be completely sure of what you are putting your money into. If there are limited newly-built apartment options in your chosen locality, you can consider buying an old apartment. However, there are a few things that you need to check before making a purchase. Keep reading to know what these things are and how you can proceed with your purchase, keeping them in mind. 

Things to Keep in Mind When Buying an Old Apartment

Here are a few things you need to remember when buying an old apartment.

Financial Capabilities: Analysing your financial capabilities must be the first thing to do when planning to buy a property. This helps you check whether you can easily afford the cost of your chosen property while paying for all other financial requirements. Start with creating a budget, including the downpayment and the amount of home loan you will need to apply for. 

And not just that. You also need to check with various banks offering home loans to check and compare their interest rates and other benefits. And then choose the one that best fits your financial preferences.

Title Check: Performing a title search on your chosen old apartment is essential to avoid getting into any unauthorised transaction. This helps you run a check through the property-related records and find out if the person selling you the old apartment has ownership rights over the property or not.  

Financial History: Since the apartment is being bought from an individual and not a developer, checking the financial history of the apartment is crucial. It is important to keep track of all the financial transactions that have taken place. Also, in case the seller has an active home loan, a No Objection Certificate from the related bank is also required. One must also consider the cash component that sometimes prevails in such deals.

Property Documents: Though tedious and time-consuming, one must go through legal formalities and paperwork when buying an old apartment. Atulay Nehra, Legal & Investment Consultant, Stayhomely Bureau says, “It is crucial to assess whether the seller is the legal owner of the property or not. All documents must be properly registered in the government records”. 

“The title of a resale property must be clearly defined. The purchase agreement, sale deed, No Objection Certificate (NOC) from the society, copy of the builder-buyer agreement and the documents establishing the chronological chain of ownership are the basic documents you need to have before buying an old property” adds Nehra.

Utility Bills/Taxes: Before buying an old apartment, ensuring that there are no dues on the property from the electricity, water and property tax department is a must. While the maintenance, electricity and water dues can be checked by the builders and the society, tax can be checked by the revenue department.

Maintenance Charges: Maintenance charges for old apartments are comparatively low as these apartments come with fewer amenities. Make sure you go through the detailed conditions of maintenance charges that you need to pay post buying an old apartment of your choice. Check the amount you need to pay for common amenities such as lift, parking, swimming pool, jogging track, gym, etc. In some cases, these amenities are offered for free in older buildings.

Structural Damage: Check if the cracks on the walls and the moisture threaten the structure. Major points such as the structure and plan of the building, walls, cracks and moisture must be examined carefully. Check if the property has been constructed according to the building plan or not. Also, consider the recurring revamping cost like painting, water-proofing and structural repairs associated with the property.

Ventilation/Lighting: Good ventilation and proper lighting in an apartment can lead you to a healthy life. In order to avoid the maintenance issue, you must consider buying an old apartment on the top floors. This helps you avert the problem of dampness and leakage as well. “An old building in an old locality can mean surrounding high rises. In that case, proper lighting and ventilation can be a major challenge on the lower floors,” says Kesavan.

Eligibility Criteria for Home Loan When Buying an Old Apartment

A home loan for an old apartment is subject to legal and technical verification of the property. Usually, banks provide a home loan amount of not more than the property prices mentioned in the sale deed of an old apartment. If that happens in your case, you may need to arrange the amount to be paid for stamp duty and registration by yourself. 

The amount of a home loan is decided by the lender depending upon various factors such as-

Age of the Property: Home loan lenders consider the age of the property while accessing your home loan application. Banks and other financial lenders usually provide a higher loan amount for well-maintained properties. They also calculate and deduct the depreciation value of the property from its initial value.

Age of the Applicant: Individuals more than 18 years of age can apply for a home loan in India. Banks and financial institutions offer home loan tenure based on the financial record and remaining years of the work life of an individual. A good credit score can help you get a higher home loan amount with reasonable interest rates.  

Things to Check Before Buying an Old Apartment

If you are planning on buying a resale flat or an old apartment, there are certain things you should check. Here’s what you should know- 

Current ownership—It is essential to check whether the flat is owned by a single owner or in joint ownership. If it is in joint ownership, ensure the property sale is approved by all owners. This will help prevent future disputes.

Physical condition of the apartment- Before finalising the deal, check the physical condition of the property. Try to buy a property that is not older than ten years, as it may require many maintenance issues. 

Basic Amenities—Check all amenities available at the property. This may include a swimming pool, club, playground, etc. Match the amenities with your requirements before making the final decision. 

Key Takeaways on Buying an Old Property

Other than the points mentioned, find below a few additional tips that you must keep in mind when buying an old property.

Explore all your options before making a purchase.

Perform a legal check over the ownership rights of the seller.

Make sure all the dues/bills related to the chosen property are paid.

Compare interest rates offered by different banks before applying for a home loan.

Use our home loan EMI calculator to evaluate an estimated EMI amount that you may need to pay every month.

Double-check all the property-related documents before making a purchase.

We hope the post assists you in buying an old apartment of your choice without any hassle. Visit our properties section and find yourself a wide range of good resale property options and choose the one that best suits you in no time. Good Luck!