Dreams in the air, head in the ground: Is it worth buying an apartment on paper?

They will only be ready in a year or two, but they cost much less.

Buying an apartment on paper can be a very worthwhile deal, but it can also turn out to be a bottomless pit.

The risks and the chances, a snapshot

Walla!

Real Estate

07/07/2022

Thursday, 07 July 2022, 15:20

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Builders build, but when do you finish? (Photo: Reuven Castro)

Ron Landsman (Photo: Nimrod Cohen)

"Apartment on paper."

Three words that express both the chances and the risks of buying a property.

On the one hand - the product you buy will be ready only in a year, two years and even three.

On the other hand, you will pay a lot less money for it.

So worth it or not worth it?

"An apartment on paper sounds very magical, but sometimes it can be a bottomless pit for problems," says Ron Landsman, CEO and owner of a real estate agency and mentor to real estate agents. To go up in such an apartment, starting from dampness, displacement of the walls that leads to breakage of the walls and tiles, etc. In fact, it is worth taking into account that many renovations and repairs are expected in the contractor's apartment. "Wait for the opportunity and buy an apartment that is at least two or three years old, after most of the problems have arisen and all the defects have been fixed."

Nir Shmol, CEO of the Urban Development and Renewal Company and Snir, actually recognizes the benefits of buying an apartment on paper. , Which has wear and tear and wear at various points.

Also, when buying a new apartment, the families purchase not only the apartment but also a residence in a planned and developing living environment, which has parks and green areas.

In addition, unique benefits for tenants in innovative buildings such as a luxurious foyer, gym, dedicated rooms for storing wine and more.

"Many new projects are being built in new neighborhoods, so buyers are enjoying community life in an environment of young families, which is similar to the buyers' reference community."

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Kitchen upgrade?

Almost always separately from the construction of the apartment.

Sisi Arazi design (Photo: Oren Amos)

Nir Shmol (Photo: Tomer Feder)

According to Shmol, the engineers, architects and the entire construction team of the project are aware of all the advanced innovations in the construction industry and implement them in practice during the planning and construction stages: Massive renovation of a second-hand apartment using various professionals, most of whom do not work with the advanced methods. "

Another notable advantage he points out is the payment terms for buying the apartment, which are usually flexible: "It is not necessary to pay the full cost of the apartment when signing the contract, but at later stages. In addition, Time to sell his current property, he is not in a hurry and therefore the amount he will receive for the apartment will be higher, which will make it easier when paying for the new property. In addition, in most of the new apartments, the tenants enjoy convenient parking and also the presence of a warehouse that was built to high standards and is located close to their apartment, which does not exist in most second-hand apartments.

But, of course, he too recognizes the shortcomings.

"First, the linkage to the construction input index that may increase the price of the apartment compared to the original purchase price," says Shmol, "usually requires additional upgrades beyond the basic technical specifications of the apartment, especially upgraded kitchen, changes and additions of walls, electricity, plumbing, etc. "When buying an apartment on paper, the city needs to imagine the final apartment in terms of planning, location, landscape and more, what's more, you often buy on a construction site if it is a building as part of a multi-building project, ie going into the unknown."

It is possible to bargain, but there is a limit.

Design by Shlomit Zeldman (Photo: Shai Epstein)

Sisi Arazi (Photo: Sharon Eldar)

We touched on the key point - the budget.

How do you even plan it?

Interior designer Sisi Arazi explains: "The division of the budget and the ratio of expenses in the first stage to the changes made to the contractor should be in exact balance with the expenses of the second stage, after handing over the key. I recommend hiring a professional, interior designer. "And balanced, with an overall view of everything to maximize the result. It is very important to include as few things as possible that are not necessary before receiving the key."

For example, Arazi explains, "A customer who purchased an apartment on paper in advance asked the contractor that the delivery be without a kitchen, since he knows in advance that he wants to choose and upgrade to a luxury kitchen."

Arazi recommends examining planning options before the purchase that suit the customer's needs, thinking about all the solutions he will need at the residential stage.

"Some contractors do not allow any movement and for everything an extra charge is required. In the initial stage yes you have to make changes in the important spaces without extra charge, ask for moves of walls, openings, a large amount of sockets which are usually very basic. "Everything, depending on supply and demand. When a contractor wants to expedite the sale, he will come to the potential customer and provide him with changes in the structure of the walls and openings free of charge."

According to her, it should be taken into account that most of the apartments come in such a way that the customer must change and design the house.

"There are apartments of specific contractors that I recommend the client in advance to ask the contractor as little as possible when receiving the key, just take a credit for sanitation, marble, kitchen and do everything alone after receiving the key accompanied by a professional, provided the client has time. The contract to ask to be present in all the installations, and as stated to demand as much as possible - after the signing it will already cost much more. "

Sometimes you should ask the contractor for less and just do.

Design by Daniel Michaeli, courtesy of Topaz Ceramics (Photo: Sharon Tzarfati)

Shlomit Zeldman (Photo: Eli Pasdani)

"Usually an apartment on paper pays back the investment because the price always goes up," says interior designer Shlomit Zeldman. Changes to walls, electrical plumbing, sizes of cladding and flooring, since the negotiations are on paper can be added and bargained over.In the apartment on paper the contractor gives a year of checking after receiving the key to repair faults that arise during this year, and on the other hand, because it is a new building, Problems and glitches can arise. "

In addition to the issues noted by Landsman and Mol, Zeldman highlights the practical drawbacks: "Most contractors are not called to do more unique things, like stone floors or grunge extensions and niches in bathrooms, lowering drywall to a certain height and more. It means design and planning has a certain limit."

So what happens if you encounter inflexibility?

"The solution can come in the form of a shell apartment. Such apartments are great and have very great flexibility in planning. In addition, there are no surprises during the renovation, everything is known in advance, and no pipes or columns are discovered unlike what happens in the renovation, so the process should be quick and relatively easy. "Budget, because unlike a regular contractor's apartment, all expenses are on the client and it is important to consult with a professional, architect and supervisor who can estimate the expected costs in advance, or adjust the renovation to the given budget."

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