Many buyers prefer to buy second-hand homes for vacations (especially by the beach), rental returns, or to give to their heirs. However, its purchasing process is not as simple as it is for a first-time purchase. Though the resale home is a reasonable bet, you want to take care of its legal and technical implications and procedural requirements.
Here are a few vital tips that will help you in buying a second-hand home.
Clear property title
In the resale property, there are chances of the claimants challenging the property title after its sale. Hence, ensuring a correct marketable property title is a vital aspect to consider. Even if the property has an owner and a co-owner, both should authorize the sale. Otherwise, banks would refuse you to offer a loan for the purchase of a second-hand home.
Loan on second-hand home
The other significant tip to bear in mind is there should be no loan pending to repay on the resale property. In case its original documents are with the bank for a mortgage, then the chance of getting another loan on it would become nil. Bank or any other financial institution won’t provide you a new loan until the original owner gets the papers released legally.
Technical evaluation of the property
This aspect plays a crucial role in getting funds to purchase a resale property. Bank and other financial institutions offer a loan for up to 80% of the property’s market value or the agreement value of the home, whichever is lower. They consider the depreciation value of the future and accordingly adjust and safeguard their interests by assessing it at a lower rate. One Melbourne Quantity Surveyor states that you should get a separate evaluation to ensure the valuation by the financial institution is accurate.
Points to keep in mind:
You have to face challenges for obtaining the loan of a second-hand home under the following situations:
- If the property is more than 20 years older
- If you miss submitting any paper related to title deeds
- If the first owner has not registered the home at the time of purchase
- Getting a higher amount loan for additional expenses of the second-hand property
Some common tips:
- While nodding to a second-hand home, look at whether or not it has facilities such as schools, markets, shopping malls, etc., near to it. It would render you a good lifestyle and appreciate the property value too. Hence, research and compare other houses also to make a valuable decision.
- You must ensure that the previous owner has paid for all the due bills. It may include utility bills, water bills, and property tax. To sail on a safe boat, try to understand the reason behind the selling of the property.
- If the resale property is more than ten years old, then you must get its structure checked. For that, you can conduct a home inspection before buying the old house. For much-needed information, learn the importance of hiring an independent building inspector before property purchase.
- Last but not least, a loan on the resale property is a vital parameter that needs both of your eyes. Examine with extra caution as the lender would provide you with a loan based on the condition of the structure.
How much can you afford?
Though it is a blunt question, you should ask yourself, especially when the investment is for a vacation gateway. Not only the value of the home will be higher, but it will also be in-demand. Moreover, you would also be liable to pay property taxes and homeowner’s insurance. So, along with considering the above tips, give a thought to your affordability too.
This guest post was written by Olivia Robinson – a writer, and blogger by profession. As I’m a wanderer, I share my experiences through my write-ups in a way that it’s understandable and appealing to people. I aim to achieve a difference through my writing, which allows my readers to make informed and valuable choices.