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Greek Islands: Pros and Cons Off Plan Property

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The pros and cons of buying off plan on the Greek Islands, how it works and who really benefits are explored in this article. The dream for the property buyer, of course, is getting their dream holiday home, or later retirement home, at the lowest possible price, whilst watching the value of the property increase as the build progresses. However, the reality can be somewhat different, particularly in these harsh economic times.

Off plan is essentially buying a property which does not exist. At this stage there is nothing except the developer's and architect's ideas on paper. All you can make a judgement on are drawings and plans and a buyer is relying on the developer to build the project. The main attraction for purchasers is that if they choose the right project by the right developer, in a good location, then returns can be very good.

The idea

At this stage buyers can purchase at the very lowest price and should be able to watch the value of their home grow. Developers know that they have to offer high discounts at the drawings stage and this is the point in time when the best units are available in the development - those with sea views or looking directly over the golf course, for example. As the development is built and units are completed so that buyers can actually physically see what they are buying, the price of units increases. Once the purchaser decides to buy, then a contract is signed with a deposit paid and staged payments are then made through to completion. Buyers can complete on the contract or, if they do not wish to continue to do so, they may sell their contract to someone else. The idea is that you buy at a low price and during the build or at completion, your property is worth considerably more.

Pros and Cons

Sounds like a dream but is it?

Pros
Buying when there are still only pictures of the project means you may have the chance to alter the layout and the finish of your property to better suit your requirements.
Staged payments mean you do not have to find all the funds upfront at once. This allows you to plan your budget and fix currency change at good rates.
The price is fixed on the day of the contract even if the value of the property when completion takes place has risen considerably.
You don't miss the boat. By buying so early, you pay lowest price and not a higher price later as the development is completed.
Investment. As you may sell the contract during the build stage, investors can sell their contract during the project and take the profit before completion.
Buy to let. Holiday makers like newly built properties, so often these properties rent more easily.
Maintenance. New build properties have lower upkeep than older buildings.

Cons
Risk. It is a risk on the part of the buyer to purchase a property which does not exist. Signing a contract, paying a deposit and then waiting maybe a couple of years before you get the keys is a risk and not for everyone. It is a higher risk than property which is already built.
The developer. The risk you are taking is with the developer. If they run into financial difficulties, the project may not be completed with everything which was intended, such as spa centre, indoor swimming pool, etc. Indeed, the development may not be completed at all.
Choosing the right unit. From drawings and plans it is very difficult to select the unit which is best for you.
Contracts. Contracts usually favour the developer so it is critical that you have your own independent lawyer acting for you. You need to ensure your money is protected throughout the build.
Quality. Quality of build, finish and furnishings can be problematic.
The future. In the main, off plan projects are usually taking place in areas where other development is happening. Will your view be blocked? Will the adjacent development complete to a low standard?
Time. You will not get ownership of your home for a very long time. Maybe two years or more.
Resales. Buyers should be aware that new developments are likely to spring up nearby. This may mean it is difficult to resell your property if there are new ones available next door at the same or lower price.