Buying a home is one of the most important financial decisions in a person’s life, and most people are especially cautious when choosing an apartment that is still under construction or even before construction work has started. This is a step that is often called a risky lottery. Buyers most often worry whether the building will actually be built and completed on time, whether the promised result will match reality, and most importantly – whether the money they pay in will be in safe hands.
These concerns are understandable, but buying an apartment in the construction phase is not a “right” or “wrong” choice – the key is to make a well‑considered decision – explains “Merko mājas” sales project manager Linda Viktorija Medne.
What are the benefits of buying an apartment in the construction phase?
Buying a home in the pre‑reservation or construction phase can often seem intimidating. However, in recent years there has been a steady increase in demand for apartment reservations during the construction phase, and this is happening in all segments, from mid‑range to business and premium categories. For example, a typical buyer of a home in the construction phase might be a young professional couple currently living in a rented or smaller apartment, existing apartment owners who want a new home but are not in a hurry to move, as well as investors or buyers for whom a specific location or project is important. This choice is not spontaneous, but based on specific considerations, such as:
- Fixed price and lower costs: homes purchased before construction starts or at an early construction stage are usually cheaper than completed homes, because the buyer pays only the amount set at the time of reservation, regardless of subsequent market price fluctuations. In addition, new projects are implemented in line with the latest energy efficiency standards, which ensures lower operating costs in the long term.
- Wider choice: unlike already completed projects, buyers who purchase an apartment in the construction phase have access to a broader selection of apartments, allowing them to find the home that suits them best in terms of layout, position in the building and other important factors, rather than choosing from the last remaining apartments when the offer is already quite limited. In addition, at an early stage there are usually more opportunities to choose and buy a suitable parking space and/or private storage room.
- More time to build up savings and make payments: the construction period gives buyers additional time to prepare the necessary financial resources, as the purchase usually starts with a small pre‑reservation fee that allows them to pre‑reserve the chosen apartment and lock in the price. The pre‑reservation fee is counted towards the total purchase amount. This is followed by the reservation fee, and after the building is commissioned the remaining part of the purchase amount must be paid.
- Opportunity to personalize the home: in new projects, developers often offer the possibility to personalize the interior finishes of the apartment by choosing the most suitable solution from the finish collections offered by the developer. Buyers can choose the flooring, tiles, wall paint colors, doors, sockets and switches, as well as sanitary ware. These are the details that help adapt the home to one’s own style and pace of life, and turn the apartment into a true home.
- Opportunity to earn: in particularly in‑demand locations, buying an apartment early allows the buyer to profit from the increase in property value, as the home is purchased at the current market price. In a rising market this difference in value often materializes before the building is commissioned, creating an opportunity for capital gains if the decision is made to sell the apartment, while keeping in mind that the dynamics of the real estate market may change.
Five steps to making a well‑considered decision when buying a home in the construction phase
To ensure that buying an apartment in the construction phase is safe, it is important to follow a clear plan. As Linda Viktorija Medne points out, these five steps will help buyers make the right decision:
- Consult with a bank: buyers are advised to approach a bank as soon as they have decided to look for their dream apartment, in order to find out their borrowing options and understand what amount they can count on for buying a home, and after receiving the results, to analyze the market, identifying the most attractive properties that match their financial possibilities for further evaluation.
- Research who the project developer is: make sure the chosen developer has a good reputation and experience. Look into previously completed projects – whether they were delivered within the agreed deadlines, whether the construction quality matches what was promised, and how the quality of the buildings has held up over time. It is also useful to get acquainted with residents’ reviews and experiences. In addition, it is recommended to check publicly available information about the company’s operations and cooperation with banks, as this affects both the size of the down payment and the possibility of obtaining more favorable loan conditions. Banks usually work with vetted developers, offering buyers advantageous terms. This provides additional reassurance about the developer’s ability to fulfill their obligations.
- Meet with the project’s sales specialist: a meeting is particularly valuable – it provides an opportunity to obtain detailed information about the project, apartment layouts, technical specifications, finish options and delivery deadlines. During the conversation you can ask specific questions, clarify details and receive a professional explanation about the available apartments, parking spaces and storage rooms. Such a meeting significantly facilitates making an informed and confident choice.
- Assess your finances: once the apartment has been chosen, make sure that your budget and long‑term needs match the chosen apartment and the payment schedule. Keep in mind that delivery of the apartment may take place after several years; use this time to build up savings and prepare financially. Finally, it is recommended to pay the reservation fee only after the bank has approved the possibility of receiving a loan; otherwise, there is a risk of losing the reservation fee paid.
- Sort out the legal side: when buying an apartment in the construction phase, special attention must be paid to the contract terms. It is important to carefully read the reservation and purchase agreement, check the deadlines, payment schedule, rights and obligations of both the buyer and the developer. The contract provides legal protection and clearly defines what is included in the price, what happens if deadlines change, costs change or other unforeseen circumstances arise. The contract must also specify the guarantees regarding the commissioning of the building.
A marathon, not a sprint – for whom is a completed home a better choice?
“A conscious choice starts with information and the ability to understand both the benefits and the nuances associated with buying an apartment in the construction phase. Such a purchase is more of a marathon than a sprint – it requires patience, planning and long‑term thinking. The more carefully the buyer familiarizes themselves with the developer’s experience, financing conditions and contract terms, the more confident their decision will be. When buying a home in the construction phase, there is an opportunity to choose the apartment that suits you best, often at a better price and with broader customization options. Of course, deadlines and technical nuances must be taken into account, but with thoughtful planning and an informed choice, this is an excellent opportunity to acquire your dream home,” explains Linda Viktorija Medne.
Originally published at https://inc-baltics.com/pirkt-vai-gaidit-ka-izlemt-vai-dzivoklis-buvniecibas-stadija-ir-ista-izvele/
Like
Love
Happy
Haha
Sad
