Discover the advantages and disadvantages of buying a house on plan.
Buying property on the ground is a very popular form of purchase in Portugal, especially in urban areas. This is a very advantageous business opportunity for developers, since by obtaining buyers at an early stage, they get a return on the financing they have already made and can use it to fund part of the project.
For those looking to buy a house, properties under construction can be more affordable options for families, but there are a few things you should be aware of. In this article, we’ll show you all the advantages and disadvantages of buying a house under construction.
Buying a house on plan: advantages
Buying a house plan can be the way to ensure that you can choose exactly the space you want, and get a house that you’ve already envisioned in your head. You avoid restricting yourself to the options available on the market and you can build the house of your dreams.
Savings are one of the advantages of opting for a house under construction, because you can save a significant amount of money. A property in the planning stage or under construction is usually cheaper than one that has already been completed. When you buy a house at this stage, you have even more room to negotiate the price and you can count on greater potential for appreciation. In other words, when it’s finished, the property will be worth more.
Another advantage you may find is that it’s 100% new. The house you’re buying will be your first and, as it’s still under construction, it will certainly have the latest materials and technologies, for example in terms of soundproofing or air conditioning. If the house turns out to be defective, it is covered by the warranty.
When you buy a house in plan form, you have the chance to choose the house of your dreams. At this stage, you can choose finishes, for example in terms of wall or floor colors. And you have more time to find furniture and other decorative objects.
Phased payments are one of the advantages and give you the chance to put money aside to pay off these commitments. At a very early stage, you have to pay the deposit to reserve the property. Then, when you sign the promissory contract, other payments are made.
A house plan gives you the time you need to plan a house move. As you know, it’s always a stressful time, but if you plan it in good time, you’ll avoid a lot of the stress and have time to plan everything in detail.
Disadvantages and risks of buying a house on plan
One of the great fears of those who buy a house on plan is that it won’t turn out the way they envisioned. That’s why we’re going to show you some of the disadvantages, so that you can make an informed decision.
- Completion of the work due to financial difficulties on the part of the construction company or the developer. Although this is a common fear, it’s not something that happens all the time. However, the advice we can give you is to find out how solid the company is and look for some feedback on it;
- Delays in completing the work. To ensure your rights, you should make sure there is a clause in the CPCV that guarantees you the possibility of receiving compensation for failure to meet deadlines;
- The end result is not what you envisioned. This is a common fear among those making this type of investment, so you need to make sure you understand all the information on the floor plan.
Written and valid document: why is it important?
Having a written document signed by both parties is the best way to safeguard your rights if something goes wrong. The document should always mention delivery and payment deadlines, as well as possible compensation if either party fails to comply.
Is financial credit possible for houses under construction?
It is possible. However, as is common practice with any mortgage contract, bank financing generally does not cover the entire value of the property. It is therefore advisable to have a financial reserve to supplement the value of the property and make down payments if necessary. If you don’t have this reserve, you’ll need to look for an alternative.
If there is room in the budget, it is advisable to use your own resources to make the advance payments and only resort to credit for unforeseen situations and to complete the purchasing process.
