Buying an off-plan apartment or chalet can have many benefits. When I started out in this job (15 years ago) I thought that buying into a development should cost less than buying something you could see. I was focusing on the risk and the waiting time.
I was wrong though. Buying a brand new property generally comes at a slight premium. Compare it to buying a new car. You can specify everything to be just how you want it from the outset, you might have to wait a few months for delivery but then you’ll be the first to use it.
I’ve listed the advantages here:
- Payment is in stages, staggered over the build.
- There are lower notaries fees and stamp duty (2.5% vs about 8% on anything but off-plan properties)
- The latest buildings are much cheaper to run thanks to the eco-legislation in place in France.
- You can normally adjust the specifications to your taste.
- There are often options to buy extra parking and garages.
- The VEFA legislation in France makes this one of the safest property purchases you can make.
- There will be a wait of at least a year, sometimes 2.
- You can’t judge the quality of the finished product. Always ask to see a development built by the same developer to reassure yourself.
VEFA (Vente en l’état futur d’achèvement)
This is the contract that lays out what the development will provide, the specifications, dimensions, tolerances of the build, delivery dates, when you will pay, under what circumstances you can withdraw. It is very detailed (and will be in French), there is a clear explanation of the document here.
I’ve written in the past on the more general subject of how to buy a property in the Alps.
Getting a mortgage for an off-plan property is fine too. In fact in provides yet another safeguard. The mortgage company will want to see that the developer is doing everything by the book. They’ll ask the developer to show that every guarantee and insurance is provided for. The most important is the GFA (Garantie Financière d’Achevement). this is an insurance policy that guarantees the project is completed if the developer finds themselves in financial difficulty and unable to complete the work. Some of the smaller developers might try and avoid some of these. Especially if they are not a legal requirement. So if the mortgage company knocks back an application because they are not happy with the development then you should ask questions as to why.
Finally, assume that the delivery day will be missed. Probably because of “weather” issues. They’ll be a clause that protects the developer in the VEFA that allows for inclement weather. So don’t make any financial commitments based on the delivery date! Like an assumption that you’ll have a rental stream or a holiday booked to stay in the apartment. If you do get you “keys in hand” by the date you expect then it’s time for a celebration!
More details about the Clos du Savoy apartment development in St Gervais here.
More details about the properties we have for sale by Lac Annecy (including the Bastide development) here: