The dream of owning their own home is part of the history of most Pakistanis, and this number increases when we talk about young people on the rise in their careers — not to mention couples. However, when choosing the best property, many are in doubt: what is the best way? Buy an apartment on the floor or one that is already ready.
Well, for those who are planning to invest in their first property, without a doubt, buying an apartment in the plant can be a great option. After all, acquiring a property that has yet to be built has numerous benefits.
What Is An Apartment On The Floor?
The apartment in the plant is the property acquired before the construction is ready for delivery. That is, it is just a project or an enterprise that is already under construction. To choose this type of housing, normally, the interested party pays a visit to the decorated model, which is the same size as the one chosen.
In this type of purchase, the buyer chooses an idea while still in the blueprint and starts paying right after closing the contract. However, it is worth remembering that the buyer can receive the goods for 2, 3, and even 5 years after the purchase, depending on the agreement that was made.
How Does Buying An Off-Plan Apartment Work?
It is essential to understand that the procedures for the purchase agreement of the apartment in the floor plan are very different from what they would be for a ready-made property. Although there are differences, both can be acquired through a mortgage loan.
In this modality, the purchase is usually divided into two moments: before the delivery of the keys and the moment after receipt. Shall we understand a little more about each moment?
Before Handing Over The Keys
During the period of the work, the buyer will only pay the value of the entry of the property and the first installments – remembering that the value of the signal can be paid in installments. At this time, it is very common for people to think that the price is more expensive than a new and ready apartment.
However, this happens because the down payment is higher since the construction company and the developer use the down payment amount so that they can speed up the construction of the property.
Unlike financing for finished properties, the construction company cannot charge interest on the payment of installments until the delivery date of the finished property.
However, it is important to remember that monetary corrections are levied on the value due to the price readjustment of the materials used to build since it may be that the construction will last for a few years and inflation will change the value of labor and the material.
After Handing Over The Keys
Finally, the long-awaited moment arrives finished works and ready to move! This is the phase in which the owner of the apartment decides to continue with the financing request or if the goods will be paid off in one go.
When the choice is for financing, it will be necessary to file the application with the bank, where the financial institution will analyze the family income and other factors to say whether or not to make the mortgage loan available.
During the verification, in addition to the bank reviewing all documentation and purchase history, it will also send an engineer or architect to assess whether the construction of the apartment meets the requirements of current legislation, also looking for a way to ensure that it will actually be built.
What Are The Benefits of Buying an Apartment on the Floor?
In order for you to make the best decision before closing a deal, we have brought you a list of the main advantages of buying an apartment on the floor. Check out!
1. Affordable Value
There is a well-established idea in the real estate market that a property acquired in the plant has a lower value than one that is already ready for delivery, as it is a launch property – it is very common to notice this type of situation. However, this behavior is not a default.
For this reason, it is important to choose a construction company that offers great opportunities and benefits when buying an off-plan apartment with much greater flexibility potential.
Remember that the “account” will also change according to the negotiated entry, the supply and demand relationship, and the time you will finance the asset. Also, if you are looking for a luxury apartment with deluxe amenities, then the Sports Valley Block is the best choice.
2. New Apartment
Acquiring the venture in the plant is to have everything new, not just the property itself. When buying an apartment on the floor, you don’t have to finish anything or redecorate parts of the property.
That is, it’s a great economy and still avoids headaches with work. As most homebuilders offer a variety of interior color schemes, you will have a brand new apartment decorated just the way you want.
3. Greater Trading Potential
Good construction companies guarantee much greater flexibility when closing a deal with their sales team. An excellent negotiation always starts with a very detailed analysis of your own financial stability, in addition, of course, to maintain an adequate reserve for contingencies.
It is important to keep in mind that the negotiation possibilities for the apartment on the floor tend to be much better, after all, you have a much more extensive payment flow until the moment of delivery of the keys.
4. Real Estate Valuation
If at the time of acquisition of the property in the plant, the price is lower, after it is ready, it resumes its appreciation in the real estate market — but why is this happening? Well, the unpredictability that can happen during the construction of the apartment is remedied as soon as the work is completed and, as a consequence, the property appreciates.
5. Time to Plan
The fact that you plan the entire payment for the apartment is, without a doubt, one of the biggest advantages of buying off-plan. Normally, based on the variation of the National Civil Construction Index (INCC), the buyer is able to pay up to 30% of the value of the property at the time of construction and, after delivery of the keys, the remaining 70% can be paid in installments.
Therefore, you have all the time it takes the construction company to finish the work to plan financing or investment that will yield every month the amount to pay future installments — thus, you reduce the chances of being in default.
For larger ventures, the time may be a year or more. So, if you plan for this, it will be possible to save and save a good amount before the completion of the work, reducing the amount that will be financed – that is, all this is very good for your financial planning.
6. Modern Infrastructure
An apartment on the floor has facilities in better conditions, in addition to being much more modern. Not only the internal infrastructure of the property but the entire building will have new hydraulic and electrical networks, an excellent finish, and state-of-the-art materials.
This, of course, will avoid daily worries about old gates, cracks, leaks, faulty elevators, and other maintenance defects.
In addition, the spaces of the place are much more used and thought out strategically, always considering the contemporary lifestyle. Therefore, you are guaranteed practicality and comfort in everyday life. Also, Park View City is one of the most desirable investment opportunities that offer a modern infrastructure with smart facilities.
7. Documentation up to Date
When buying at the plant, you also have more bureaucracy at the time of closing the deal. Since the apartment had no residents before, you don’t run the risk of having problems with incomplete records, unpaid taxes and fees, late documentation, and other inconveniences that cause great concern.
Planning To Make The Change
Finally, another positive point in buying an apartment on the floor is the longer term to plan your move.
As the keys are only handed over after the work is finished, you have enough time to:
- Plan the furniture;
- Quote the most suitable carrier;
- Know the neighborhood where the apartment is located;
- Study all the new routes that you and your family members will take;
- Plan the change very calmly and organized
Well, with all these benefits, you still increase your equity, ensuring an investment with a certain return. So, if you’re looking for an apartment, be sure to consider all these advantages of buying off-plan.
What Are The Tips For Choosing A Good Property And Getting A Good Deal?
Do you want to choose an excellent apartment to make a good deal? Then check out the 7 tips we brought you!
1. Be Sure of What you Want and Also What you can Buy
Many start by looking at apartments on the floor and only then try to adapt their budget to what they have seen on the market, but this is a very wrong practice. First of all, you need to be sure how much money you have available to make all the necessary payments.
It is necessary to consider the purpose that the property in the plan will have for the family: investment, vacation, or housing. Gift for the kids?
A second apartment to be closer to work? Finally, the enterprise has to be suitable for its objective. After leaving the initial impulse behind, it’s time to analyze what the market has to offer and evaluate what really fits your budget.
2. Consider Additional Expenses
In the previous topic, we said that you need to be sure of how many resources you have available to make all the necessary payments — this is because it is not just the installments of the value of the property.
In your analysis, you must also take into account that you will have expenses with taxes, fees, documentation, shipping, etc. It is important to know all these expenses and prepare for each one.
3. It’s Time to do Research
When getting to know the first apartments on the floor plan, it is also important to research the construction company’s past. It is obvious that it is worth talking to the broker, but that alone is not enough.
On the Internet, it is important to check consumer complaints, in addition to talking to lawyers specializing in the real estate market to seek references. And of course, if possible, talk to other customers who have already purchased properties from the construction company.
On the other hand, visiting some properties can also be very useful. Look for low-quality materials, cracks, and broken promises, for example, and talk to doormen and current residents.
Finally, another interesting tip is to search for a problem in Procon, where you will find a list of complaints that anyone can consult.
4. Visit the Property’s Region on Different Days and Times
Contrary to what happens with a ready-made property, which you can enter as many times as you want, the apartment on the floor does not yet exist. However, this does not prevent you from making visits to the region of your possible home or even to sales and decorated stands.
The idea is to visit on different days of the week, times, and occasions to help you get to know the day-to-day life on the street and in the neighborhood.
For example, on Sunday, you may notice that the street is calm and quiet, but vehicle traffic and noise can be quite complicated during the week.
It is essential to know the location of your future home well, so check if there are fairs nearby that hinder the entry and exit of vehicles, walk around the neighborhood and talk to the neighbors.
5. Keep Everything Related to the Apartment on the Floor Plan
It is important to keep and make a copy of everything related to the purchase of the apartment on the floor plan. Realtor’s calculations, advertising materials, and folders, receipts, copy of the incorporation memorial — in short, everything!
The incorporation memorial, for example, is essential and, therefore, if the broker says he does not have it, it is not interesting to do business. Law 4591/64 stipulates that, before starting any negotiation, developers must register a set of 15 documents at the property registry.
Among them are the construction project approved by the City Hall, proof of land ownership, description of the material and finishing used, and the exact calculation of the area of the property. Without such documents, it is a crime to undertake any undertaking.
6. Visit the Property Throughout the Construction
Do not rely only on the description that the broker makes when negotiating property in the plant. A good tip is to visit the property, especially on rainy days, to check for any apparent problems. Ideally, you do this before you even sign the contract.
Take the model seriously, as it needs to represent the enterprise very faithfully. Don’t forget, for example, that south-facing apartments receive less sunlight while northern ones receive more. Also, analyze the view from each window of the apartment, as this is an item that influences the purchase price of the property in the plan and its valuation at the time of resale.
7. Ensure the Security of the Money you are Investing
It’s important to answer any questions you have, so don’t hesitate to ask everything you need to safely close the deal. Some tips for questions to ask are about the voltage of the outlets and structural issues in the common areas of the building, for example.
The possibility of buying an apartment on the floor offers you numerous advantages, but know that you need to be very careful to avoid such facilities becoming major headaches in the future.
A property is, without a doubt, a great investment in life, and therefore, by following all these tips that we have brought to you, you will certainly ensure that everything happens in the best possible way.
What Taxes Are Levied?
When buying a property, it is quite common for the buyer to pay attention only to the amount requested to do his financial planning. However, when closing the deal, he ends up discovering that there are several other expenses that will end up weighing on his budget.
These are amounts related to commissions, taxes, and other expenses that can harm your business.
So, in order to reduce this risk, we have brought some information here about the incidence of fees when purchasing an apartment in the plant. Check out!
The ITBI (Immovable Property Transfer Tax) is a municipal tax that is levied on real estate purchase and sale operations. The amount must be paid by the buyer of the property because until payment is made, the property cannot be transferred to the name of the new owner.
This tax is calculated based on the market value of the property, and the rate varies between 2 and 4%, always depending on the municipality. It is worth noting that, in some cases, it is possible to obtain a reduction in the tax or even its exemption.
This happens, for example, when the purchase is financed by the SFH (Housing Financial System) when it is the buyer’s first property.
And, yes, even though the property is on the floor plan, ITBI must be paid. Remember that the tax calculation, in this case, will consider the value of the finished property.
2. Work Progress Rate
Anyone who buys a property still in the plant from financing must pay a fee for the evolution of the work. Known as construction interest, this expense is related to all charges that are charged by the bank to the construction company in the financing of the asset, which is then passed on to the purchaser.
Although many people dispute the charge of this fee, it is completely legal. However, its incidence must be very clear in the financing agreement, and it cannot be charged after the completion of the work.
3. Brokerage Fee
The brokerage fee is a commission that must be paid to the realtor who carried out all the intermediation of the business. Generally, it is 6% of the value of the apartment and may vary slightly according to the type of property.
The payment of the brokerage fee is the responsibility of the seller of the good, but this can be negotiated so that the buyer assumes the expense. In some cases, the person looking for an apartment hires a realtor to do a more detailed and specific search.
In cases like this, the commission must be paid even without the acquisition being finalized. However, this has to be pre-arranged.
4. Public Deed
When buying a property in cash, it is necessary to obtain a public deed. The document, created in the notary’s office, attests that the sale of the property takes place legally, with the presentation of all the necessary documents and with the consent and identification of the parties.
As for the value of the deed, it is different in each state. Do not forget that, in cases where the purchase of the apartment is financed, the deed is not necessary, as it is replaced by the financing agreement itself.
5. Property Registration
It is through this registration that the transfer of the property is legally documented since it includes all the legal changes that the property undergoes. It is another fee that varies according to the location of the apartment, but, on average, between 3% and 5% of the purchase price of the property is paid to register it.
Well, the advantages of buying an apartment on the floor are very clear. It is, for sure, a very interesting option for those who want to invest or live. But remember to choose a construction company that is serious about ensuring that the amount invested bears fruit for a long time.
A tip: projects that value aspects of sustainability are excellent options for buying an apartment on the floor. After all, the trend is that this requirement is increasingly valued.
And not only for the property itself, but all the rest of the land where the common areas are built, in addition to having a more economical operation.
Look for creative, innovative ventures with the potential for appreciation to make a great deal! If your greatest interest is in acquiring a property as an investment, check out the 3 best capital to invest now.