It happens that the buyer has chosen the ideal housing for himself, but is not yet ready to pay the full amount for the property. In such cases, many construction companies offer a long-term payment plan - installment plan. Let's take a look at the pros and cons of buying real estate in installments.
Installment is a financial instrument that allows the buyer to purchase real estate with a deferred payment. The installment plan is available for real estate objects only in complexes under construction.
When drawing up a contract for the sale of real estate in installments, the document indicates the value of the object, the amount and schedule of payments, the procedure for transferring the object to the property of the buyer, the procedure for calculating fines, etc.
For information about the available installment properties in Antalya, you can refer to the Antalya apartments for sale page.
Installment benefits:
First, we will examine the benefits of buying property in installments in Turkey.
1. Fixed price
When buying real estate in installments, you fix the current value of the object. During the construction of the project, the most favorable prices are offered to buyers at the stage of excavation, the closer the completion and commissioning of the object, the higher the price. Prices may increase by 30% after the commissioning of the facility. When concluding a sale and purchase agreement at the construction stage, you fix and pay the cost of the object, which was indicated in the agreement.
2. No overpayment
Compared to a mortgage, installments are much more profitable, since you will not have an overpayment. Turkish developers offer installments without interest, that is, interest-free.
3. Comfortable payment
Under the terms of the sale and purchase agreement with the developer, the buyer undertakes to pay the minimum down payment, and the rest of the amount to be paid according to the established payment schedule with monthly or quarterly payments. On average, the size of the advance payment can be 40-60%. As a rule, installments are issued before the completion of construction, which takes an average of 1-2 years. Some developers in Turkey are ready to extend this period, but such conditions are negotiated on an individual basis.
4. Easy to design
To draw up a contract for the sale of real estate in installments, you do not need to confirm official income, provide a credit history or look for a guarantor, etc. To conclude a contract of sale, it is enough to have a passport and a down payment.
5. The shortest terms of registration
The contract for the sale of real estate in installments is drawn up in one day. You do not need to wait for the assessment of the property by the bank's specialists; you don't have to wait for mortgage approval.
Installment cons:
In the following, we will examine the disadvantages of buying property in Turkey in installments.
1. Restrictions on the range of objects
The buyer can buy real estate in installments from the developer only in a facility under construction. For those buyers who are considering buying a second home, it is not possible to buy real estate with a deferred payment.
Currently, one of the cities in Turkey that is suitable for buying a villa is Antalya. To find out about the conditions of buying a villa in installments in this area, you can refer to villas for sale in Antalya.
2. Currency risks
Due to the instability of world currencies, there is a risk of overpayment due to changes in the value of the exchange rate. Since staged payments are most often made in US dollars or euros, it is worth considering changes in the exchange rate of these currencies in relation to your national currency.
Here's an example:
On December 5, 2022, you entered into a sale and purchase agreement for an object in a project under construction with an installment payment for 1 year. The terms of the contract set 50% payment upon conclusion of the contract and 50% monthly for 12 months. The total cost of the object is 120,000 US dollars.
At the conclusion of the contract, you contributed 60,000 US dollars. The ratio of the US dollar to the ruble on December 5, 2022: 1 dollar = 60.5 rubles. In terms of 60,000 US dollars into rubles, the amount was 3,630,000 rubles.
The next payment is coming up next month - $5,000. The ratio of the US dollar to the ruble on January 5, 2023: 1 dollar = 71.5 rubles. In terms of 5,000 US dollars to rubles, the amount will be 357,500 rubles at the new rate, instead of 302,500 at the old rate. The difference is 55,000 rubles for only 1 month. But the course can always change to your advantage.
3. Installment period is strictly limited
Compared to a mortgage loan, an installment loan from the developer is issued for a shorter period until the completion of construction and the delivery of the project. A mortgage loan is issued on average for 15 years, after the completion of the project, you can safely move into your new apartment and live in peace, paying off the loan to the bank. But you should always take into account the overpayment of interest, it can reach up to 2 prices per property.
Get advice on the purchase of property installments in Turkey
In this article, we looked at the pros and cons of installment plans from a developer in Turkey. If you dream of an apartment in a new comfortable residential complex, but are not ready to pay the entire amount, installment plan is the perfect solution for you. Our team is ready to advise you and answer additional questions about real estate under construction in Antalya and about the installment terms from the developer.
If you wish, you can contact Antalya Estate Group and use our expert advice on buying real estate in Turkey in installments.
