Tips about buying new apartments: 9. Do you want to buy a finished apartment? Advantages and disadvantages

Investment in a new apartment is one of the most important moments in the economic life of each and every one of us. Statistics say that we usually buy 1 – 3 dwellings during our life, so every mistake counts. During the last years (as there were not many new apartments ready) people used to buy the right to purchase an apartment in a future building. Today the situation is different and there is a significant stock of new apartments waiting buyers to choose. But there are also many other projects under construction. Which of the two options is better? It is vital for you to know their advantages and disadvantages, in order to save money and know what you invest in.

Finished Apartment: Advantages: Clear titles, ready to move in

An apartment which is finished has some clear advantages, which people take into serious account:

• Usually its legal status is clear. If the developer has finished with "intabulare" and all the other procedures in order to establish its property title, you buy a property which is crystal clear.
• You can move in immediately, or very soon. No time to wait, no worries forschedules and budgets. You like it, you take it.
• Every bank can finance it. When the title is clear, any bank can finance the apartment. So you don't depend just on one bank, if you want to buy the property by obtaining a loan.
• No risk to lose your money. You pay for something you have now, not in the future. No advance payment to risk, everything is crystal clear (or can be).
• You pay for what you use. When the building is under construction, you pay for something which you will use in the future. So until then, you pay for two homes, using one of them.
• You may know your neighbors. In case there are more people living already, you will know your neighbors before you move in. You find it irrelevant? Well, think again…
• If the quality of construction is good, then no extra investment is needed. How possible is this: The cheaper you paid, the less possible it is your apartment to have good quality of construction and finishings.
• The surrounding area looks nice. If the developer has finished the arrangement of the surrounding area, you will avoid staying 6 – 18 months into an area full of dust, with people working etc.
• You can have a clear view of the monthly costs. Heating, elevator costs etc are already functioning and you can obtain the information about their cost.

Important tip 1:

• Make a list of all problems that your architect (and you) discovered. Negotiate the price with the owner based on real figures, not just trying to cut money "because you want to".
• The more empty apartments you see in a project, the easier it will be for you to negotiate the price.

Important tip 2:

• Some owners offer to you the chance to rent an apartment and use the money of rent as advance payment in case you want to buy it in the future.
• This is a very good option, so take it into serious consideration.
• Just check the contract you will sign and search for hidden "tricks".
• And especially the price the developer will charge you for electricity etc.

Finished apartment: Disadvantages: Impossible to prevent mistakes to happen, many extra costs

A finished apartment also includes several defaults, especially when you paid less and you did not check carefully before buying:

• Many mistakes are already done. For example, a wall from rigips placed at the wrong location. So if you don't like some details in the apartment, you have to change them yourself, you can not negotiate with the developer to change them for you.
• Usual bad quality of construction and finishings. More than half of the buyers who bought a new finished apartment complain about poor quality of construction and all kinds of problems regarding the finishings.
• Too many hidden extra costs. The two problems above will boost your budget, as you will have to renovate everything from the very beginning. This means time and money.
• Higher price to buy. Obviously for a finished apartment the costs are higher than the dwellings which are under construction. So you can end up having paid a lot and then an extra investment to fix the problems.
• Possible upscale is already taken by the seller. A higher price means that the future potential of the property as an investment has less chances to overperform comparing to the market. Most probably you will see slower appreciation, as you started from a higher basis.
• Cost of utilities to boost. There are some developers who don't give to the owners of apartments their own independent meter to measure the consumption of gas, electricity etc. They connect themselves to the network and then they split to each apartment, charging them extra for this. It is your choice to pay for it, at least you should know it before you will accept.

Important tip 3:

• You may see many apartments in empty buildings.
• Before buying there, ask yourself: Why is this place empty? Am I the intelligent one who sees what the others did not? Was it just because of the crisis?
• Asking the seller will not hurt you either, you may hear some interesting stories about this vital question.

Important tip 4:

• Be cautious with "ghost buildings", where you see 100 apartments and 3 lights on in the night.
• If you are Romanian, think twice if you want to live in a building all bought by foreign investors, who will never stay there and they are blocked, trying to sell.
• So, if a building is "sold" but noone lives there, think about it more carefully. Because also the monthly costs will be higher for you.

Next week:

• Do you want to buy an apartment in a new development under construction?
• Advantages and disadvantages

• Advance payment: Why they ask it, why they need it.