Developer installments: what they mean and what you need to know about them

What are the installments to the developer

You have found a apartment for sale in Bucharest, with 2 rooms, with installments to the developer and you can't wait to buy it. But what do these rates refer to? 

The house in installments with the developer or the apartment in installments with the developer in Bucharest or in any other city refers to the process by which you purchase the property through a system alternative payment method: instead of taking out a loan, you pay the installments directly to the company from which you buy the property. This option is widespread among real estate developers in Bucharest because it is advantageous for both the seller and the buyer. 

Based on a legal contract, the two will mutually establish the value of the monthly installment. Remember that there are no standard conditions, each developer assuming the right to negotiate to find the best solution, that is, the one that pleases both participants in the negotiation. For example, in general, the advance and the monthly rate will be higher than in the case of a loan, but this aspect is by no means mandatory. 

Now that you have found out what rates mean directly to the developer, let's see some pros and cons. 

The advantages of installments with the developer

The advantages of the buyer in the case of installments with the developer depend on several aspects. First of all, we discuss the value of the house and the developer's strategy. Obviously, the negotiation process will also determine whether the buyer will win at the end or not. So, here are the advantages you could enjoy: 

• Much simpler process than in the case of accessing a mortgage loan. By the way, will the housing rates increase? 
• You have more flexibility when it comes to paying installments. You can negotiate the amount of the advance, the monthly installment, but also the payment period. Sometimes, you can even have the option to adjust the value of the installments along the way;
• You don't need proof of ability to pay, sources of income, query at ANAF, seniority in the field of work and so on. You no longer go through the credit pre-approval process;
• You don't need life insurance;
• Full home insurance will not be necessary;
• Sometimes, you will have immediate access to the apartment;
• The apartment can be bought in the country even if your income is obtained abroad;
• You can also purchase the apartment if you have already borrowed from the bank or do not qualify for programs such as Prima Casa;
• The stage of the house can be that of the project, completed or in the process of completion;
• You don't have to pay the interest.

Disadvantages of the developer rate

As in the case of any transaction, there are also a number of disadvantages when you resort to this financing option. Disadvantages worth considering could be: 

• Payment of a higher advance than the one due in the case of a real estate loan;
• Higher monthly rates;
• Payment time generally shorter;
• The developer's financial complications may affect the buyer's property right. This is why, for example, it is worth concluding a pre-sale-purchase contract;
• The possibility of legal disputes. Therefore, study the developer well before resorting to this option;
• Transactions are not regulated, so pay close attention to the terms of the contract.

What you need to know about the contractual provisions

I emphasized above that you must read the conditions very carefully before using this financing solution. Practically, it is a form of leasing, and the most important aspect will be represented by the complete and above all correct drafting of the contract so that both parties are totally exempted from any kind of subsequent complications.

This type of agreement takes the form of a civil contract, so it is recommended that a potential buyer be protected in case of extreme situations, for example the bankruptcy of the developer. The best solution in this case will be represented by the mention of the contract in the land register, so that both parties are put under shelter.

Usually, the house will be transferred to the property of the buyer when he has already paid a percentage established by mutual agreement with the seller. Obviously, this percentage will be explicitly mentioned in the contract, along with clauses for extreme situations, clauses that must concern both the buyer and the developer. In addition, the developer can provide proof of correctness if he accepts making payments (advance and installments) through the bank.

It would be recommended that both parties turn to specialized lawyers to include additional clauses, such as those related to the renegotiation of the monthly installments in cases of force majeure. Another aspect that provides security for both parties will be the legalization of the contract with the help of a notary. The reference will be both the classic provisions of a leasing contract, and especially the provisions of the Civil Code.

What are the relevant details for the buyer

We talked above about the most important aspects that both parties must know, but in the following we want to focus on what would be recommended for the buyer to know. 

In general, the advance will not exceed 50% of the value of the house, and the monthly installments will be established according to the duration of the contract. The duration of the contract, in turn, will be determined according to the value of the home, the advance and the due installments. Again, it is recommended that the contractual agreement between the parties be supervised by a specialist in civil contracts, a specialist to guarantee that the person who is going to purchase the property is as well protected as possible and that at the end of the payment period of all installments he will obtain property right. 

Therefore, each buyer is advised to undertake both a personal documentation and the process of requesting all relevant information from the developer, both processes being absolutely necessary to ensure that your investment will have the effect expected. The first payment will be made exclusively after the drafting of a legalized preliminary contract covering: 

• Total costs;
• Reciprocal commitments;
• Clauses for exceptional situations;
• Teaching deadlines;
• Guarantees from the builder and developer;
• Date for payment of installments and amount of the advance;
• Proof of receipt and final reception;
• Proof of the fact that the status of the house was mentioned in the land register, for example with the help of a land register extract;
• Any other provision or provisions that the signatory parties consider relevant. 

The conditions for obtaining installments from the Aqua City developer

We discussed in general what a potential buyer should know, and in the following we will present the Aqua City offer . 

The conditions for granting installments to the developer in Aqua City are:

• The minimum advance requested is 30% of the price of the purchased apartment;
• The installments will take place over a period between 3 and 5 years;
• The only documents required to access the installments at the developer are the customer's identity documents;
• If, for various reasons, you can no longer pay the installments to the developer, you can notify the developer and make the payment in the following months;
• If three consecutive unpaid installments accumulate and no other solution is identified, the contract may be terminated, with the loss of the amounts paid up to that point.

Is paying installments directly to the developer the optimal solution for you? Now, you have all the necessary data to make this decision!