Most people want to resolve the issue related to the purchase of real estate. However, there is often not enough money to buy housing in new buildings, so the optimal solution is to choose an apartment on the secondary market. Here you can always find an apartment, the cost of which will be significantly less compared to a new house.
Secondary housing – what is it?
Represents real estate that has undergone the procedure of state registration of property.
This concept includes objects owned by private individuals or owned by municipalities. Important - no one has the right to sell municipal secondary housing, since this property is not legally the property of the people living in this living space. However, they are endowed with the right to privatize housing and after that, acting as an owner, they can realize it on the real estate market.
The only distinguishing feature of new buildings from secondary housing is the registered ownership and certificate of ownership, which has already been received directly by the owner.
The very name “secondary” means that the property was already owned, and, therefore, the subsequent transfer of rights will be the second in a row.
Risks
When purchasing an apartment in a new building at the construction stage, there is a risk that the construction company will go bankrupt and the construction will not be completed. In this case, you cannot get your money back. It is impossible to foresee this. Practice shows that quite often construction companies delay the delivery of housing, and buyers cannot do anything about it. Of course, the government is trying to eliminate this risk by considering laws on compulsory bankruptcy insurance for developers. But there is still a risk, and even fines for delays do not stop the developer from delaying the deadlines. When choosing between a new building or a secondary one, you need to remember these risks. But if the developer is trusted and has authority, then the risk of purchasing housing from him is sharply reduced.
However, there are also risks in the secondary housing market. They are related to the execution of the purchase and sale agreement. This contract can be terminated by court after the buyer has paid all the money. There are also cases when third parties appear with legal ownership of real estate. In this case, the purchase and sale agreement may again be terminated, and the transaction will be declared invalid. In this case, you will lose your money and be left without an apartment. Fortunately, all these risks can be mitigated with the help of a competent lawyer, but his services may not be cheap.
Which is better to choose?
The most common question from people who want to buy an apartment is what to choose – primary or secondary housing? There is a basic set of indicators according to which the choice is made; we will consider them in more detail below:
Price
It is a well-known fact that the price of 1 square meter in a house under construction directly depends on the stage of its construction. The early stage dictates a lower price, and then the price per square meter will increase as construction progresses.
The price of apartments on the secondary market in buildings of a similar segment, which are located within the same area as the new building, will always be higher in comparison with the primary one.
Time factor
Often, from the moment of signing documents on shared participation to the moment of actual provision of living space, it can take from 3 months - when living space is purchased immediately before the stage of commissioning of the object, to 1.5 years - if the contract is drawn up at the “zero cycle”. The secondary segment provides the opportunity to receive the keys to the living space immediately after the transaction is completed.
Financial expenses
The dominant part of the real estate of new buildings is transferred in the so-called “draft version,” that is, with concrete walls. As a result, the cost of repairing such housing will be significantly higher compared to “secondary” housing, even if it requires major repairs. But under the same conditions, the total amount of investment when purchasing living space in newly built houses will be much less.
freedom of choice
The most attractive, affordable and marketable real estate in projects under construction is subject to sale at the initial stages of development. As a result, this leads to the fact that by the time construction is completed, as a rule, impressive living spaces remain for purchase, more expensive or those that have certain disadvantages, for example, an unpresentable view from the window.
Choosing secondary housing provides greater freedom of choice among similar ones in a certain segment.
Potential Risks
When purchasing a secondary home, they are associated with the possibility of termination of the contract through the court. Or a situation is possible when the right to use the apartment arises for third parties after the fact of sale of the property. There is a possibility of encountering scammers who will carefully hide the most important facts concerning the object of the transaction, and after its completion will go to court to terminate it.
However, these risks can be prevented with a balanced and professional approach to assessing the history of the property. To do this, you should entrust the solution of such an important issue to qualified specialists who will scrupulously check the purity of the transaction. In reality, “a bird in the hand is better than a pie in the sky,” since the probability of not getting paid for real estate is much worse.
When purchasing housing in a new building, the risks are mostly associated with the work of the developer himself. Important - it is impossible to predict possible bankruptcy or delay in the commissioning of the facility. At the moment, the legislative framework in Russia is not able to fully protect buyers in the segment of new buildings.
Profitability Aspect
Fact - the price of one sq. meters in a new house increases in direct proportion to the construction of the facility. In case of rational investment of funds in primary housing, it is possible to receive up to 30% per annum. Real estate on the secondary market is increasing in price along with general trends in the industry. It can bring in real money if it is rented out, but the level of income cannot be calculated, since each housing requires an individual assessment.
Mortgage rates
Important - not all credit institutions provide lending for primary housing. Often, the developer accredits the property under construction with several commercial banks, which creates certain inconveniences for buyers.
"New flat"
The market for new buildings guarantees the legal purity of housing, provides the opportunity to carry out renovations in full accordance with the wishes of buyers, and also enjoy the knowledge that they are truly the first owners. Moreover, a newly built house is the key to new and serviceable communications and engineering systems, which can cause significant difficulties in “stale” houses.
Certificate of ownership
An undeniable advantage of purchasing real estate on the secondary real estate market is the opportunity to begin the registration procedure immediately after receiving a certificate of ownership. In accordance with current Russian legislation, if you move, registration should be issued no later than two weeks.
When purchasing housing in a new building, a similar certificate can be obtained no earlier than 3 months from the date of delivery of the residential building. There are situations when, in fact, the house has already been completely erected, the residents have moved into the apartments, but due to certain circumstances, the developer is not able to officially “hand over” the property. The result is that the house is not legally registered with the relevant government agencies, which leads to many related difficulties, including registration.
Secondary housing as an investment object
When deciding to purchase real estate on the secondary housing market, it is worth assessing the future and considering options for its subsequent implementation. If the goal is to generate income by increasing the cost of the apartment, then the object itself must be worthwhile - a good and prosperous area or the city center. It is important that the popularity and, accordingly, the cost of such an object will always be higher than the average level on the market.
If you want to buy real estate on the secondary market for subsequent rental to third parties, then it is best to consider options in residential areas or near large universities.
We draw up a purchase and sale agreement. How to do it right, how to avoid mistakes
The contract is drawn up in a form convenient for the seller and buyer. His form is taken from the MFC, from a notary service employee. You can print out the standard form and fill it out yourself.
It is important that the completed document contains the following important information:
- information about both parties to the transaction. Here the full name of each party, their registration, data from the passport are indicated;
- the cost of the purchased residential property. Important: if the buyer purchases a house with a land plot, then he should indicate separately the cost of the land plot and the residential building located on it;
- information about the purchased housing. The contract includes the address, total area, purpose;
- the main characteristics of the purchased living space;
- the absence or presence of encumbrances on the acquired property;
- spouse's consent to the transaction;
- the absence or presence of relatives who have not been discharged from the residential property being purchased.
Important: if the housing is in shared ownership, then the contract is certified by a notary.
Price analysis
To compare prices, let's take the real estate market of the Russian capital.
The Moscow primary market for the most part consists of modern business-level properties, which accounts for almost 40% of the total supply. Of this amount, almost half falls on the “elite” segment, which meets all modern requirements in matters of architecture and technical equipment.
Mid-level properties occupy about 29% of the market, and “economy” – about 5%.
The secondary real estate market mainly offers economy class housing - 39%, middle class - a little more than 31%, business class - almost 29%.
Most real estate experts agree that it is impossible to compare prices without taking into account the specific quality of the housing itself.
In general, we can now safely say that new houses are definitely more expensive than resale living space. The result is that the average price per square meter on the new home market is just over 206 thousand rubles, and on the secondary market – just over 180 thousand rubles.
For example, the sale of a 2-room apartment with a “stale” renovation of about 50 square meters in a standard block house in the center of the capital will bring from 11 to 12 million rubles. This amount is quite enough to purchase a comfortable and spacious 2-room apartment in the area of the 3rd transport ring. The area of a new apartment can vary around 80 square meters. In new buildings closer to the Moscow Ring Road, it is quite possible to buy a 3-room or a modest 4-room apartment. In the Tsaritsyno residential complex, you can buy a three-room apartment of 120 square meters for an amount of 11 to 12 million rubles.
What does secondary ad type mean?
There is an opinion that secondary real estate is an apartment in a panel house, of low quality, in general housing that is far from ideal. Yes, of course, there are such offers on the market, but currently more and more liquid objects are appearing that deserve the attention of buyers. New houses built no more than 5-10 years ago, comfortable, high-quality and cozy apartments - all this is high-quality secondary real estate available to many buyers today.
We recommend reading: Land surveying, what is it for?
Legal cleanliness of housing
When choosing which apartment to buy – a new building or a “resale” one, you also need to remember that secondary housing may have a “dark past” in history. But new buildings are always legally clean, and you don’t have to worry about some relative of the seller showing up with the rights to your apartment. The only risk is associated with the possible loss of money during the construction of housing at the foundation pit stage. But if the developer encounters problems related to the installation of utility networks or documentation, this will simply delay the completion date of the project. The likelihood that the developer will go bankrupt is low. Most likely, he will generally be insured against bankruptcy. However, there are generally sad cases when, for some reason, the developer freezes the property, and then people who bought apartments in an unfinished building do not receive them and cannot return the money.
Infrastructure and improvement
Also, when buying an apartment in a new building, there is a chance to end up in a part of the city with poorly developed infrastructure. Typically, a developer initially commissions a residential building, and only years later shops, schools, kindergartens and other facilities appear around it. Therefore, when buying such housing, you need to understand that at first you will have to travel for groceries. Although if a new building is being built in the city center, then the cost of an apartment there will be very high.
Another disadvantage is the lack of amenities. An apartment in a new building is a concrete box, even without utilities. There is nothing here, so you will have to invest money and effort into landscaping.
