What is a Real Estate Program?

Are you considering buying a new-build property? Why not consider a property development program? This type of purchase has become increasingly popular since the end of the covid crisis, making it an attractive alternative. This article is here to guide you in your decision, giving you all the keys you need to make the right choice. 

What role do real estate developers play?

Property developers are the professionals who put together real estate projects before offering them (to professionals or private individuals). Once the deed of sale has been signed, they are considered the sellers, overseeing the construction of the homes before they are sold.

What are real estate programs?

A real estate program refers to the creation of housing units sold by lot (property) and off-plan. For example, the creation of a building with 6 apartments (6 lots). You've found a property you like and are ready to invest? The procedure is slightly different from buying an old property, but we'll explain everything.

How does a property program purchase work?

Once you've made contact with the property developer responsible for the lot you're interested in, you'll be able to place an option. Once you've gathered all the necessary documents, you'll pay a deposit and sign a reservation contract. This stipulates that the developer undertakes to sell you the property and you to buy it. You now have a period of a few days to a few weeks (depending on the terms of the contract) in which to change your mind. Finally, once you've made your decision and the deadline has passed, you sign the deed of sale and make your first payment. The amount paid is a percentage of the sale price, including the deposit.

Paying for a property via a real estate program

Thereafter, payments will be made in stages as work progresses. The first payment will be made on completion of the foundations for the future homes. Subsequently, finishing touches such as flooring, insulation, water systems, etc. will be put in place in turn, with a payment for each finishing touch. Once all the construction work has been completed, we'll declare the work finished, announcing the end of the project and the payment of almost the full amount. You will complete the sale price in its entirety when the keys are handed over.

Opinions and recommendations on real estate programs

The advantages of a real estate program :

• Notary fees are often in the order of 2% to 3% for new-build properties, compared with 6% to 7% for older properties. The savings on this expense can be counted in thousands of euros. 
• Taxation and incentives to buy new: this includes benefits such as zero-rate loans for first-time buyers. But also a reduction in VAT, depending on where the property is built, and an exemption from property tax for the first two years. 
• Legislation: buyers can also turn to the Pinel and Malraux laws to benefit from financial advantages. 
• The various guarantees are a significant plus, protecting the buyer for up to 10 years after purchase. These include: the guarantee of perfect completion, the ten-year guarantee, the guarantee of proper operation, the firm and definitive price guarantee, and the financial guarantee of completion.
• Optimization of space: each home is fitted out and furnished in such a way that the occupant can make the most of the surface area. Storage, comfort, furniture - everything is designed to enable buyers to make the most of the space they have acquired.  
• Respect for the environment: the priority for new homes is to have an ECD label that complies with the various criteria that make it up. In this way, new homes comply with environmental standards, resulting in lower energy bills.

The disadvantages of a real estate program :

• As the property is not in material form at the time of purchase, you may find it difficult to imagine what it will be like. However, 3D plans can help you visualize the finished property. 
• Since construction time is required, you'll have to wait until the work is completed before you can move in. This means you won't be able to move in until 12 to 18 months after signing the deed of sale.
• The price per m2 is higher in new homes than in older ones.

Conclusion

Buying any kind of property is an important event. So it's imperative that you think carefully before you buy. Not sure what to do? Call our advisors, they'll be happy to help.

To find out more, read our article on Apartment hunters, who are they?