Buying a property ‘on plan’ in Malta has become very common lately. Buying ‘on plan’ simply refers to buying a property that is not yet built, or partially built. In essence, you’re buying the property based on the plan, and not the actual finished building. Buying properties that have yet to be built is common in many countries. Although, in most other nations, it’s referred to as buying ‘off-plan’ rather than on it. We like doing things our own way here in Malta! Construction is rife at the moment. If you’re looking to buy (or you’ve recently bought a place), chances are you’ll be doing so ‘on plan’. Of course, many buyers do choose to go for finished properties. It’s definitely the ‘easier’ option, especially if you like the style of the property. However, if you can’t afford to buy a finished property, or you haven’t found one that you love, then buying on plan is a great alternative.
Buying a property on plan in Malta can be stressful. There is a lot to think about and, if you’re a first-time buyer (or this is your first time buying on plan), you might fail to consider some important aspects of the process. There are advantages and disadvantages to buying a property on plan in Malta. On one hand, you can choose exactly how you want things finished. You’re not buying a property that’s been done up to someone else’s taste. Everything that goes into the house will be something that you’ve chosen. On the other hand, buying on plan takes a lot of hands-on involvement, decision-making and planning. What’s more, you could be getting a good deal if you buy on plan. If property prices are on the increase, by the time you move in, your finished property could be worth a lot more than what you paid for it. Conversely, if property prices decrease, you could end up overpaying for your property.
In light of this, we wanted to put together some tips for people who are buying, or who have bought, on plan. As well as reading our advice, try to talk to any of your friends or family who have done it before. Someone who’s been through it all will be an invaluable source of knowledge for you!
Do your research on the developer
Looking for a property to buy in Malta can be a crazy process, especially at the moment. Properties are selling so fast that, by the time you hear about them, they’re already sold! If you’re attempting to search on your own, this might not be the best way to go about it. Our Sales Specialists at Zanzi Homes can help you find your dream home. They know the Maltese property market better than anyone, and they’re the first to hear about hot properties. If you’ve been looking for a long time, and you find a property on plan that you really like, you might be quick to jump on it. However, even if the property you’ve found is the right size, in the right location and the right price, don’t be too hasty! Before you even think about buying the property, do your research on the developer. Find out how many projects they’ve completed before and how happy their buyers are. Did they complete on time? Are their properties well-finished? If possible, go and see some of their finished projects to get a feel for their work.
Get the right mortgage
In the process of getting a mortgage, you’ll probably visit a few different banks. Not every bank in Malta offers the same deal when it comes to mortgages. There are a couple of different things you need to keep in mind when you’re talking to mortgage lenders when you buy on plan in Malta. If you’ve paid the developer the fee to reserve the property in cash, then you’ll need to make sure the mortgage offer you have on the table won’t expire before the property is finished. Otherwise, if you take a percentage of your mortgage to pay the fee, will the bank charge you to hold the rest of your mortgage for you? If so, how much?
Check the contract
The contract you have to sign when you buy a property on plan can be extremely complicated. Before you sign anything, it would be worth going over the contract with a solicitor. This can help you to understand any legal jargon, or any complex points in the contract, so that you can feel more confident about buying. Most developers will give you a date that they expect the project to be completed by, thus giving you a rough timeline to work with. However, it could be a whole other ballgame trying to get a developer to commit to a date they must have completed by. For this reason, it can be very useful to get some legal advice.
Keep everything in writing
Doubtlessly, throughout the negotiation and construction process, you will be in contact with the developer quite a lot. It’s important that you keep everything in writing, so that you have this to refer to if necessary. Even if you have a conversation with the developer over the phone, it’s best to follow this up with an e-mail so that you have any agreements in writing.
Arrange regular visits
You will need to visit the construction site for various things at different stages throughout the building process. As the project progresses, you’ll probably find yourself visiting more and more. When you do go and see the property, it might simply be to look at what’s going on and view the progress your new house is making. Always remember to take notes! You may see things that you will want to discuss with the developer. So, write them down before you forget! This will particularly be the case if you notice any changes that weren’t on the plan. If you are visiting the property for a specific reason, i.e. to tell the electrician where to place the sockets, then be prepared. Bring a pen or a spray can if necessary, so that you can mark exactly where he needs to put them.
Be prepared for change
As the building project progresses, some things might change. Not everything always goes according to plan. If you have a good developer and/or project manager, they will let you know when something changes. On the other hand, you might notice these changes yourself when you go and visit, and you’ll have to question them with the developer. Sometimes, these changes happen due to building regulations. Other times, the developer will make last-minute changes for monetary reasons or other reasons, such as certain materials not being available. Check your contract to see what changes the developer is and isn’t allowed to make. Unfortunately, you’re likely to find that many developers leave themselves a lot of wiggle room.
Plan and order in advance
When you buy on plan, you will be in charge of finishing the property. This will include the electrics, plastering, painting, flooring, kitchens, bathrooms, internal doors and much more. Before you sign the contract, you should know what the developer will finish and what you will need to finish. There are many home stores in Malta where you can go shopping for everything you’ll need for your interiors. Bear in mind, though, that shops in Malta don’t keep everything they have on catalogue in stock. Moreover, a lot of the things you will be buying (i.e. kitchens, curtains etc.) will need to be custom-built or custom-made. You will most probably have to wait a minimum of 6 weeks for a lot of things. Keep this in mind when you do your planning. Think about what you need to purchase, and in what order. If you’re particular about what you like, you don’t want to be choosing any tile that’s in stock at the last minute because the developer needs to get the bathrooms done!
Consider extra costs
Budgeting is going to be a massive part of your ‘stress’ when you buy a property on plan in Malta. You will need to be paying deposits for various things, such as your kitchen or your appliances, at different stages throughout the process. Even if you are the most meticulous planner, it’s likely that you will come across some costs that you haven’t anticipated. In addition, many buyers don’t take into account any complex fees. When you’re living in a condominium, you will probably have a monthly or a yearly fee that will go towards the upkeep of the communal areas, the roof and the exterior of the building. Make sure you enquire about these fees before you buy. You need to make certain that you will be able to afford these fees on top of your mortgage.