Buying an off-plan property requires careful attention to project details, including final plans and documentation. Although it offers economic benefits and flexibility of design, it also presents certain risks and challenges.


Buying an off-plan property

Buying an off-plan property is an important decision that involves a number of key considerations. With this type of transaction, it is important to understand both the physical and legal aspects before committing to the purchase.

Below, we’ll explore some key points that buyers should consider when considering buying an off-plan property.

Advantages and risks

Una de las principales ventajas de comprar una vivienda sobre plano es la posibilidad de obtener un precio de venta más bajo en comparación con las propiedades ya construidas.

Another advantage is that contractors often offer payment facilities, which can be attractive to many buyers. However, it is important to note that this financial advantage comes with increased risk.

Delivery of the property is subject to the build obligations of the promoter being met in accordance with the plans and what was agreed in the initial contract.
This means that buyers assume the risk that the builder does not complete the construction as planned or that problems arise during the construction process.

It is therefore important to do proper due diligence before committing to a purchase.

Key information

Before making the decision to buy an off-plan property, it is essential to obtain all relevant information about the project and its legal status.

Buyers can obtain valuable information by consulting the “Registro de la Propiedad” and local council. At www.registradores.org you can make all kinds of online queries.

Some of the basic information you should know includes:

  • Verify the ownership of the property built or to be built, in other words, that it is registered in the name of the promoter signing the contract and that the person signing the contract is authorised to do so.
  • Ensure that the promoter has all the necessary authorisations and licences to carry out the construction.
  • Additional information such as company registration, management positions and articles of association.

In addition, it is advisable to carefully review the sale contract and, if necessary, seek legal advice to fully understand the terms of the agreement.

Buyer protection

To protect their interests, buyers may require warranties and consider taking certain additional precautions.

These include taking out insurance to cover any non-compliance by the contractor, delays in delivery or damage that the buyer may suffer as a result of post-construction problems, as well as verification of the registration of the project in “Registro de la Propiedad” that justifies that it has been finished as established in the plan and in the quality report, before signing the contract of sale.

Additionally, having amounts paid deposited into a special account designated for the construction project can provide additional security for the buyer.

In cases where the signing of the contract and payment of amounts on account is required, it must be taken into account that it may contain abusive clauses or be considered not included (even if they have been signed by the buyer), such as making modifications without express consent of the buyer. The buyer’s rights include the right to choose a notary and the freedom not to be subrogated to the existing mortgage loan, if any.


Future perspectives

Despite the risks associated with off-plan property purchase, many people continue to choose this option because of the potential financial benefits

Find out more about trends and opportunities of real estate investment in Madrid, the key steps to buying a house in Spain or how housing reform can improve profitability.
You can also decide what type of operation you want for your rental property by reading about the rental types to improve profitability.

You can also read about the advantages of financial leverage in property adquisition, and the importance of Property Management in Madrid.

 

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