Property Buying, Selling, Renting Buying Off Plan
Buying Off Plan
When you buy a property off plan you are in effect buying a property that is either not completed or still on the drawing board awaiting the turn of the first sod before any building work starts. There are many advantages to buying Greek Island property in this way, but you should also be aware of the pitfalls. Read on to find out how to buy off plan effectively on your dream Greek Island.
Research before you Buy
Check out what other developments are on offer in the location you have chosen and examine the prices of the stage payments and completion prices. Allow plenty of time to study the plans and check the dimensions carefully to make sure that the rooms are large enough for furniture and for the purpose that you need them for. If a garage is part of the deal make sure it is large enough to fit your car. Make regular site visits to ensure that everything is going to plan. Visit the planning office to see what other developments or amenities are planned for the area and try to imagine what the finished product will actually look like and whether its proximity to existing amenities meets your needs. Another area of research that is essential is the research you undertake on your developer. This should be done before you commit and sign a contract. Check out the developer’s previous work and don’t be afraid to take a look at it to see what kind of finish they offer. Check out forums and websites to see if any complaints have been raised against them and if they offer guaranteed rental income ask to see the rental contracts in place.
Reading the Contract
When you buy from a developer there will always be a contract and you need to study this in detail with your lawyer to determine what happens if the building is not completed, is sold to another developer or is not done according to the original specification. The contract should lay out the timeline for the build and detail any penalty payments should the deadline not be met. It should also give the timelines for the stage payments and the amounts and any penalties for late payment. Additionally it should give details of the builder’s liability insurance and copies of the plans along with the floor plans, the finished 3D drawing and the technical specifications. Both parties must sign the contract for it to become legal. The contract should also allow you to withhold around 5% of the total cost in case the work is not completed correctly. You should also write in a clause whereby the completion of each stage is made in writing by your lawyer or architect. Read in detail the builder’s insurance policy to see if it protects your investment in the case of the builder going bust or failing to complete. If there isn’t one look for another off plan build!
Stage Payments
One of the great benefits in buying off plan is that you do not have to pay up front in one amount. Developers will make arrangements for you to pay in stages, often over a set period of time or once a certain level of the build has been reached with the final payment in all cases being upon completion of the project. Stage payments differ significantly in time periods and amount with some developers asking for larger deposits and then equal stage payments over the course of the build and others making all payments equal from the start. You can often withhold the final payment as an insurance against ‘defects’ or if the work is not complete. If you join an off plan scheme when some of the work has been done you may be asked to pay all of the preceding stage payments plus the deposit in one amount and then continue at the rate of stage payments laid out at the start from then on in.
The Early Bird…
Buying off plan means that you are buying early and this has a number of benefits. Firstly the earlier you get in on an off plan scheme the better, because you will have more choice over the apartment you buy and the finish you get. Being in early means you can choose the details, which will make your property more like home – things like the type and colour of bathroom tiles, walls and flooring etc. As well as what your apartment overlooks and where in the building it lies. Often in quality front line builds i.e. those closest to the beach, prices rise once the build is completed, which does give you the opportunity to make a profit. Additionally, the earlier you are the more bargains there are. Developer often add in bargain buys to make their advertising campaign more attractive e.g. by offering prices from 25,000 Euros although in effect there may only be one apartment available at this price
Living with the Builders
Your apartment may be completed to your exact spec in a timely fashion, however other apartments in the block may not be and you may find yourself living or holidaying with hoards of Greek builders! Even if the block is complete you may find that it is some time before the luxurious pool and landscaped gardens materialise. Your developer should outline the plan for situations where this arises at the start and inform you of the site working hours. Each step of the way he should let you know what work will be done and to what timescale so that you can organise your visits accordingly.