Property Services & Advice - Buying Off Plan

Buying Off Plan

Buying off plan - or at some point during the construction process - is a popular option in Spain as the earlier you buy in, the less expensive your total purchase price will be. However, while many homeowners are satisfied with the final outcome, you should be aware that there is always the risk the developer will run into hard times and the building will not be completed.

To cover this risk, builders are required to take out a special bank guarantee that will compensate investors should things go wrong. Before investing in any not-yet-completed project, check on this guarantee and consult with representatives of the bank that is standing behind it.

Once you are sure the project is properly guaranteed, your main concern will be the payment schedule. Usually you are required to make a down payment with subsequent payments due as the project progresses. For example, in addition to the down payment, you might be required to pay 25 per cent of the remainder when the basic structure is completed, 25 per cent more when the floors and some interior work has been finished and so on.

When considering the cost of the new home, don't forget to take into account whether or not the kitchen will be "amueblada", or furnished, and "equipada", or outfitted with basic appliances. It is not unheard of for either or both of these aspects to be left in the hands of the future owner.

Finally, your lawyer will help you to ensure the contract you sign is in your best interest, containing, for example, a clause that ensures you receive compensation if work is delayed. This is an excellent way to encourage your builder to keep the project on schedule and hand over the keys on - or at least near - the date promised.