Market news

Acquisition of off-plan housing in Turkey. Pay attention to?


It is no secret that many new projects sales made on the basis of mock-ups, reconstituted type of future buildings. In this regard, particularly relevant is the study of positive and negative sides of sales, based on mock-ups. In this article Director General of AB Invest, Zafer Arslan, offers some advice to potential buyers.

The recovery in the housing market, together with the increased demand has resulted in many projects sell out before the start of construction. Due to the large demand, in the real estate market has appeared many of companies willing to grasp a «piece of the pie», but do not having sufficient financial security and experience.

To ensure properly function of Turkish real estate market, it is necessary to explain the problems faced in implementing sales through mock-ups. All problems can be grouped into three groups: the problems encountered because of incorrect treaties; problems encountered by ensuring, by a construction company; problems that have arisen because of unprofessional construction company.

Prior sale agreement
First of all, with notary certification of such agreements it is needed to adjust it like the Real Estate Prior Sale Agreement. Otherwise, the agreement will be legally handicapped, which could lead to negative consequences for the buyer. Sometimes developers try to reduce their tax burden concluding a contract of sale by filling in TAPU lower selling price, which could lead to greater after-tax penalties. This is especially important if the loan was received. The difference between the amount received credit and the written in TAPU cost the obligatory would take into account the tax authorities. Buyers should insist that in TAPU was inscribed sale price. In addition, to the contract must be exactly written commitments builder and right sides. Upon receipt of the contract must ask TAPU to collective ownership? This document is a confirmation of your right to land under residential house and shows what kind of unit you will own. Along with that, before purchasing buyers should explore the technical task and building permits.

Commitments to the buyer.
One of the important points buying real estate on the basis of mock-ups are commitments provided by construction firm. The buyer must think about their financial well-being if the building will not be completed on time. Assum that the buyer took advantage of the housing loan market. After the signing of contract and making the first payment of approximately 25% appear commitment for payment of contributions and interest on the loan. However, if bought real estate will not be finıshed at the time frame, theen buyer will have to live in rented flat and pay for it money.

Analyze a small sample. Suppose that in a housing complex project customer buys an apartment valued at 200 000 New Turkish Liras (YTL). The apartment will be ready in 2 years. At the time of the transaction the buyer pays 25% in cash, while for the remaining 75% takes a loan with an interest rate of 1.55% for a period of 10 years. After the payment in cash 50 000 YTL, the buyer costs does not cease. Each month, the buyer will have to pay $ 2 852 NTL for the credit. Assuming further that the buyer pays also a monthly rent of $ 1 000 NTL, till the time the apartment be fınıshed buyer will have to pay the amount of 142 448 YTL, the cash payment + contributions by credit + rents. Now suppose that the payments on the loan for the same apartment will begin after 2 years, after receiving bought apartments at its disposal. At that point, the buyer will have to pay a total of 74 000 YTL, the cash payment + rent. As you can see in the second case for 2 years, buyer will have to pay twice less than in the first. This is a significant occasion for serious reflection.

Professionalism of construction firms

It is necessary to draw attention to the quality of buildings and it accordance to architectural project. If the developer does not increase their spending while increasing the cost of construction, it could lead to the low quality of purchased property or even to shut the construction.

For example, in 2006, along with the economic instability was observed decline in the index of confidence of buyers. In this regard, demand was decreased because of what developers have been forced to reduce prices on many projects. Also in 2006, the cost of construction over the previous year increased by 20.6%. All of these factors, namely: the increase in the cost of construction, reducing demand and therefore lower prices have put developers in a difficult position. In this situation, it is necessary to verify the possibility of the developer to complete the construction and quality of materials used and the work being done. Summing up the above-said come to the conclusion that the financial security of developer firms and construction companies is very important.

The possibilities offered to a buyer:

Buying with a small cash (5% of the total value)
If the buyer can get from a bank letter of guarantee for receiving credit for the purchase of housing, then the developers can sell real estate with the primary contribution of 5%. After that, till receipt of the apartment buyer will not make any payments.

For example, you decide to buy real estate project valued at 500 000 YTL. Assume that you make 5% of the cost - a sum of 25 000 YTL, which you have to pay in cash. Until the moment this property will be registered on your name, there will not be any payments you have to pay. Assume that your apartment is ready. In this case, you can lease it and use rental payments to partially repay the payments on the loan.

Greater return on your investment
Other advantage of property purchasing at the stage of the project is to profit from the difference in the prices of real estate at begining and terminal stages.

Buyer protection
Most projects are financed by banks. In this case, the bank maintains strict control over project, developer company, construction firm, etc. If the bank approved the project, it will finance only once sold 60% of the project. Thus the bank safeguarding their interests protects the interests of the buyer. Paid 5%-governmental payments will be storage in a blocked account. Access to this account from construction companies and developers is denied, so if it was decided to abandon the project, the problem of returning the 5% payment will not arise.

Guaranteeing TAPU
Guaranteeing TAPU, especially for foreign banks is the most important condition. So that for not insured property banks refuse to give a credit. Thus, the bank safeguarding their interests protects the interests of the buyer

News was edited by "Vesta Estate".

Forget password?