Are you thinking of buying an apartment off-plan in Brazil? Know some precautions before the purchase
Numerous reasons can generate the need to acquire an Off-Plan property. If you are planning such endeavor, be sure to check our list with 11 Tips on purchasing an Off-Plan Property in Brazil.
11 TIPS ON BUYING AN OFF PLAN PROPERTY IN BRAZIL
Relying on the work of developers, brokers and financial agents, it is common for people to limit their care and caution. However, it is critical that you also control some other aspects of the buying process of an Off-Plan transaction in Brazil. These include the credibility of the parties involved and the details of each stage of the development. Here more on what to analyze:
1. Work of the developer
When deciding to purchase a property, you will have to get involved with different companies and professionals. With so many options on the market, it is difficult to be sure of quality without a little experience in the area. So the best way to protect yourself from dubious business is to do a lot of research and have a professional follow up.
To begin, talk to Realtors to learn more about the trajectory of the different developers. If you can, complement the research with on-site analysis, also seeking information on the types of work performed, sales history, and other relevant data.
2. History of the construction company
Although some confuse developer with construction companies, it is worth noting that both are different companies and should be evaluated individually. While the former has the entrepreneurial function of articulating the business and formalizing the real estate registry, the latter is responsible for executing the work and thus ensuring construction quality.
To evaluate the builder, research its reputation on the market and find out what kind of technology it works with. Visit other enterprises built by the company to observe the condition of the buildings and question owners about the satisfaction with the deadlines and quality of services. Do not forget also to see if the construction company has anything pending in the justice or in entities of Consumer protection.
3. Disclosure materials
When a new venture is launched, the developers prepare a series of materials to demonstrate the type of work that will be executed. Save that material!
Advertising pieces, brochures, videos, electronic modeling and newspaper ads – In the future, all may serve as a basis for comparison between what was promised and what was delivered by the company. In addition, a good set of materials for consultation becomes powerful evidence during a possible lawsuit.
4. Business documents
Before marketing a property in the drawings and under construction, the developers must register a multitude of documents. Without them, the construction and sale become irregular and, consequently, leaves the buyer also subject to penalties in the future. For this reason, never close business without first having access to all documentation related to the enterprise that will be built.
At the outset, ask the developer for a copy of the incorporation memorial. It should include detailed records of everything that will be built, the materials and equipment that will be used, as well as the names of those responsible for the project. Other documents will attest to the ownership of the land, the precise calculation of the area of the property and the construction project already approved by the City Hall.
5. Site and environment
It is not because you have decided to buy an apartment on the floor that you need to ignore the location and surroundings of the building. Thus, even if the developer has disclosed important information about the region of the enterprise, a visit there may be fundamental to obtain other data, such as neighborhood profile, movement, noise, among others.
If you are acquiring a property with your spouse, arrange a visitation schedule that will allow both of you to be on site. At that time, observe the condition of the neighborhood’s infrastructure, road quality, accessibility and terrain topography. Being close to the work will also allow a better understanding of the incidence of light and winds in the lot, thus complementing the perception obtained with the model of the project.
During a property purchase process, any economy is well received as long as it is not related to the notary’s office or, in some cases, a lawyer. This is because only duly registered documents can be recognized by law. In other words, having the record of the scripture or deed is the only way to attest that the good belongs to the individual who paid for it.
Even so, many people ignore the formalisation of purchase actions to avoid extra costs. Without this guarantee, it is easy to be deceived by a malicious developer, who can abuse the lack of evidence to sell the same property to other people. To avoid problems, do not postpone your records and consider that a small start-up economy can be expensive in the future.
7. Real Estate Attorneys
If you are a foreigner and lacks comprehension of uses and customs of the country, a lawyer could represent, in the end, safety of mind and, yes, why not, savings. If your lawyer is also willing to take part on negotiations, having somebody that is used to these transactions can open path for certain avenues of bargaining and price reductions that you would not be able to perceive.
8. Contract Details
Reading and understanding the entire contract is about ensuring a safer transaction. In the contract, you will find (or should) all the information necessary to understand the process of buying and selling.
So give yourself enough time to read each page carefully until the end. As much as you believe you have understood everything, there will always be some data to be questioned and explained by the seller. With a detailed evaluation, you also avoid accepting unfair terms and guarantee sufficient time to modify or negotiate contract proposals.
9. Insurance conditions
The insurance contracted in a process of purchase and sale of property must serve as a guarantee for both parties. That is, it exists both to protect the administrator from the default of the buyer and the buyer himself from possible irregularities of the administrator. So what’s the problem?
Unfortunately, some contracts only register the developer as the beneficiary of the insurance. In this case, the indemnity for late delivery or abandonment of the work ends up being borne only by the buyer. To avoid such problems, check that your name is in the clause that determines the beneficiary of the contract. If it is not there, make sure that you will also be a beneficiary before closing deal.
10. Extra costs
When buying an apartment in the plant, do not get confused with the idea that the costs will be limited to the value of the property. In the future, it is also up to the buyer to pay some fees with Public Deed, Real Estate Registry and tax (ITBI). For those who will finance the property after the delivery of the keys, it is also necessary to consider the costs maintained with the correction of the INCC (inflation rate).
Beware of the collection of amounts considered abusive, such as legal aid and brokerage fees; after all, both must be borne by those who hired the lawyer or broker. If you have questions about the legality of any charges, have your own lawyer to guide you and help you through the process.
Lastly, always keep in mind that other costs will arise with the purchase of furniture and new appliances, service of change, general facilities and decoration of the new home. To avoid contingencies, make a financial plan as soon as possible and reserve your own budget for any expenses.
Do not fall for the rush provoked by the seller with speeches such as :”we need to close this today or this week”. It might be true that in some cases sellers may have other proponents but this is mostly a form of pressure. It is indeed important to carefully analise the transaction, like the hidden debts or problems with the Justice from the developers for instance.
As a last advice, civil law determines that if developers are late in the delivery, if there is no exemption of liability, they should pay fines to the buyer, at the same percentage that they have inserted in contract against the buyer, even if that is not included in the document.
Get in touch with Botinha & Cabral for further guidance.
You can now prepare to buy an apartment in the plan or in the drawings in Brazil more safely and ensure the satisfaction of the whole family.