Three Risks Associated with purchasing unfinished properties
Properties in a construction stage are usually more affordable than completed properties. However, the purchase of such properties may pose at least three risks. First, after the buyer signs a purchase agreement, the construction company may declare bankruptcy. This, in turn, may lead to a delay or cancellation of the construction project. Second, the seller may not be the actual owner of the land on which the purchased property will be built. This may lead to serious legal issues having an unpredictable outcome. Third, an unfinished property may look very attractive in the preliminary plans, but, once completed, significant drawbacks may appear.
Minimising Risk – Check Previous Projects
To decrease the chance of contracting with a seller who does not have sufficient financial resources to complete the project, it is important to check the previous construction projects of the seller. Sellers having large portfolios of successfully completed construction projects are generally more reliable than sellers who have a few or no completed projects.
Minimising Risk – Check Legal Status
Potential buyers of properties in a construction stage are advised to check the legal status of the land on which the properties will be built. More specifically, it is necessary to check all historical records indicating transactions with the land as one invalid transaction may lead to the invalidation of the following transactions.
Minimising Risk – Check On-Site
Sellers will put their best efforts to ensure that the unfinished properties sold by them look attractive to potential buyers. For instance, they may provide potential buyers with nice pictures showing how the properties are going to look like after completion. Such pictures are unable to show major drawbacks, such as limited sunlight or irritating noises. Therefore, it is highly advisable to analyze the project plan carefully instead of relying solely on marketing materials.
Contact Vitosha Properties
If you need any advice on how to avoid the pitfalls associated with purchasing a property in a construction stage, please contact us. We have helped many investors to purchase the right properties in Sofia.