Apartments bought off the plan: risks and opportunities

The active demand and the increased supply of newly built residential buildings creates a dynamic market with many alternatives and specifics. In the search of the best offer in terms of location, price and quality, in the recent years many consumers are interested in the so-called “off the plan” deals.

What are these types of sales deals, what are their advantages and what are the potential risks? In the following lines you will find the clearest and simplest possible answers regarding these current questions.

What are the off plan properties?

Buying "an off plan” is buying a property in a building that has not yet been built. The sale can take place in different stages of construction - from obtaining a building permit, to the final stages before obtaining Act 16.

In this type of purchase, the customer is introduced to the construction plans of the building and the property, including construction, distribution, dimensions, systems used, etc. After signing a preliminary contract and making the payments, the client should wait for the construction of the building so that he can take possession of his property.

Usually payments are rescheduled - according to a scheme proposed by the builder. Thus, at each completed stage of the construction, the buyer makes the necessary installment under the preliminary contract. The completion of the entire process can take from one to 3-4 years, according to the plans and deadlines of the builder.

Advantages when buying a property off the plan

The reasons this type of real estate deals to be so popular can be summarized as follows:

The buyer has a greater choice regarding the property in the building - floor, exposure, size and additional extras such as basement, balcony or garage. This is possible thanks to most unsold properties in the block or a residential complex.
Usually, the price for selling off the plan is the lowest possible for the property. The deal is directly between the investor and the new owner, which saves various commissions, surcharges and increase the resale price at a later stage.
The off plan properties give opportunities for a high personalization of the interior. The buyer can choose to trust the investor about the design or get his home as a "white box" that he can design according to his tastes and ideas.
When buying a property "off the plan”, the client can take advantage of an alternative for deferred payment without increase in price, as the installments correspond to the stages of construction.

In short - such a purchase allows you to choose an excellent property at a good price, and then turn it into the home you have dreamed of.

Specifics and potential risks when buying a property off the plan

The main reason for concern when buying a home of the plan is the relatively high degree of uncertainty. This includes whether, when and how the building will be completed, whether it will receive Act 16 and whether the investor will be able to meet the construction parameters set in the plan.

To avoid potential unpleasant surprises, you can go through a few standard steps which will give you the peace of mind you need, such as:

Find out which banking partner the investor is working with. This ensures that the investor is strictly researched by the bank on the basis of history, experience and financial behavior and the funds will be disbursed by the bank in tranches according to the construction of the building.
Check the ownership of the land on which the building is being built or is to be built. In the Property Register at the Registry Agency you can get information about the ownership, the right to build and the possible difficulties on the space.
To check the reliability of the investor by getting acquainted with his already completed projects. In the Commercial Register you will find important information such as financial condition, ownership of the company and other details to help you make a decision.
To conclude a preliminary contract in which all the specifics of the property are fixed: construction, price, method and term of payment, collateral and penalties. It is desirable in this phase to work with a reliable lawyer who can defend your interest in various developments in the situation.

The team of Atlantis Estates is always available to offer individual consultations to all its clients who want to make the right decision for themselves - intelligent, reliable and risk-free.