Questions to ask when purchasing resale apartments

August 26, 2008

Friends, Many of you might be in the phase where you might consider investing in your own apartment. Since new apartments usually cost very high, you may consider purchasing resale apartments too. Here is a sample post with details of such a resale flat in Velachery (Chennai, India) posted in my company’s intranet blog.

My relative has planned to sell his flat at velachery.

Flat Details :

Total area : 865

Cost/square feet : 4500 (negotiable)

First floor

No of Bedrooms : 2 with attached toilet.
Hall :1
Flooring : Marbonite tiles.
Kitchen : Shelves, granite slabs,etc. (attached pooja room)
Balcony : available for one bedroom.

Address :

FirstFlloor,******** apartment.
Chennai -42.

Flat opposite to Velachery(dhandeeswaram) Bust stand.

The flat is 5 years old.

Person for Contact : *****
Mobile : ******


Some questions/notes are specific to the quoted blog post, but can be generalized for any apartment purchase.

Is this flat on the main road side (facing the bus-stop) or on back side, which also has road access (If I remember right it is Karnam street). Concerns of noise and pollution – you cannot keep your windows open.

Does this flat have a car park ? If yes, is it reserved (mentioned in the document) ? If not, is it possible to park it on the roads ? (which I guess is not possible for this apartment – since one road is very busy and the other, on the back side, is very narrow)

How about 2 wheeler parking ?

Total number of flats in the block, how many in your floor ? Who are your neighbours ? You will be comfortable if you have people similar to you, rather than say a politician who has people visiting him always or say some noisy office is next door.

Does it have an association (at least informal) with a proper person (one among the flat residents) to take care of common facilities administration ?

What are the monthly maintainence charges ? (I think this flat has a lift -> more charges towards electricity. BTW, does this lift have license ? )

Water : Does it have metro water connection ? Is the bore water available ? Is there a sump for both water connections ? Does it have individual over-head tanks or a common one ? If it is common, is the water usage metered, what if one flat uses water irresponsibly ?

What are the total number of floors ? (G+2, I guess. If it is, does it have approval for the second-floor ?)

Is it suitable for families, in the sense, since it is on the main road commercial centers may have cropped up. So there can be an office functioning next door. Some may not prefer to live in such places. But some will be very much interested to buy and start their office or rent it out to offices (better returns, but again more risks).

What are the current rentals. If it apartment is already let out, what is the current rental and if this flat is not let out, what do other apartments in the same building charge as rent ?

What is the UDS (Un-Divided Share) of the land for this apartment ? What is the guideline value for the land ?

(Related Info :  What is the UDS (Undivided Share) ?How is UDS calculated ?Why is UDS important when buying or selling an apartment ?)

UDS * GuidelineValue –> what you are paying for the land, which usually should appreciate over time.
Total cost – (USD* GuidelineValue) –> the money you are paying towards the building, which usually depreciates over time after construction.

Sometimes the market value may be much lower than the GuidelineValue, it is in your best interest, that you raise it to market value when registering the sale.

Can all this be bought with white money or will a part of the amount have to be settled in black, if so how much ? Some owners might rarely demand in such a way, because the apartment would have been bought at 1/3 of the current price (around Rs.1500/sqft) so there can be a lot which can be taxed, so some will want part of the amount in black. But if the owner were to invest back in another apartment, he/she will not mind receiving full-white. But if the owner asks for black, it is not suitable for salaried professionals.

Is it already in a home loan ? If so, will the owner release it before sale for that does does the owner intend to use advance from purchaser ? If not, one option is to go in for a loan in the same bank and transfer the loan to the buyers name. It is hard to make this work, if the buyer is going in for a loan in another bank.

These are some of the questions I would have asked if I were to purchase that apartment. Some of them are generic enough for any apartment purchase. There may be more which I could have missed out, since it might be very obvious step (verifying encumbrance certificates) or may be I just forgot (please add your comments to this post). Hope you find this helpful.

Note : I am not a certified adviser in real estates, I am just sharing my personal experiences. Any decisions you take based on my posts are at your own risk.

Some Rights Reserved : Creative Commons Attribution 3.0 License