Buying a property under construction can be an excellent opportunity for both those looking for a new home and investors. However, this decision involves some risks and requires attention to several details. In this article, we cover the necessary precautions, the advantages and disadvantages of acquiring an off-plan property.
Advantages of Buying an Off-Plan Home
- Property Customization: Buyers can choose finishes, materials, colors, and even make adjustments to the interior layout to suit their needs and preferences;
- More Affordable Prices: Properties under construction are usually sold at lower prices compared to ready-made properties. This can represent significant savings;
- Facilitated Payment Terms: Builders often offer more flexible payment plans, splitting the payment into installments over the construction period;
- Property Appreciation: Investing in an off-plan property can result in significant appreciation until the keys are handed over, representing a great long-term investment;
- New and Modern Property: Buying a property under construction guarantees a new home, with modern infrastructure and in accordance with the latest construction standards;
- Ability to Choose Location: Buyers can choose the best units available, whether in terms of location within the condo, view, or position in relation to the sun.
- Builder's Warranties: New homes come with warranties that cover potential construction defects for a certain period.
Disadvantages of Buying an Off-Plan Home
- Risk of Delivery Delays: Several factors can influence the construction schedule, such as weather problems and the construction company's financial difficulties.
- Uncertainty about the Final Product: The final product may not exactly match expectations based on models and blueprints.
- Advance Payment without Immediate Use: The buyer starts paying for the property without being able to enjoy it immediately.
- Possibility of Legal Problems: Properties under construction may be subject to legal problems, such as work embargoes and land disputes.
- Changes and Additional Costs: Necessary changes to the original design may result in additional costs.
- Construction Company Financial Risk: If the construction company faces financial difficulties or goes bankrupt, the buyer may be left in a tricky situation.
- Costs with Monitoring the Work: Regular monitoring of the progress of the work can generate additional costs with travel and technical inspections.
- Difficulty of Reselling: Properties under construction can be more difficult to resell, especially if the real estate market faces a crisis.
Precautions to Take When Buying a Property Under Construction
- Builder Research: Check the company's reputation, its track record of completed projects, and the quality of the constructions. Look for reviews from other buyers and see if there are any complaints with consumer protection agencies.
- Documentation Check: Before signing any contract, make sure that all documents are in order. Check the land registry (registration), building permit and other necessary permits. These documents guarantee that the construction is regular and within the legal norms.
- Purchase and Sale Agreement: Read the purchase and sale agreement carefully. Pay attention to the clauses regarding delivery time, late fees, property specifications, and payment terms. It is recommended to have the advice of a lawyer specialized in real estate law.
- Descriptive Memorandum and Specifications: The descriptive memorandum is a document that details the materials and finishes that will be used in the construction. Make sure that what is described in the memorial corresponds to your expectations and what was promised by the builder.
- Site Visits: Whenever possible, make site visits to track the progress of the work. This allows you to check that the construction is progressing according to schedule and that the quality of the work is as expected.
- Forecasting Extra Costs: When buying a property under construction, it is important to anticipate potential extra costs, such as finishing, decorating, and any changes to the original project. These costs can significantly increase the total value of the property.
- Warranties and Technical Assistance: Check what warranties the builder offers after the property is delivered. It is essential to know how to proceed in case of structural problems or construction defects that may arise after the move.
- Financing: If you want to finance the purchase, consult different financial institutions to find the best financing conditions. Make sure the property is registered and fit to be financed.
- Payment Plan: Negotiate a payment plan that is feasible for your budget. Some builders offer flexible conditions, with installments during the work and a balance due on delivery of the property.
- Anticipation of Possible Delays: Delays in the delivery of the property are common in construction. Have a contingency plan in place to deal with this possibility, such as temporary housing or an adjusted financial timeline.
Final Thoughts
Buying an off-plan home can be an excellent opportunity, but it is essential to be aware of the potential risks and the necessary precautions to ensure a safe and advantageous purchase. Conducting detailed research, checking all documentation, and considering both the advantages and disadvantages are crucial steps in making an informed and successful decision.
