If you are considering an interesting real estate investment, it is of utmost importance to be accompanied by a professional who will scrutinize the process with a professional eye, and take into account countless important parameters.
The following are seven basic concepts that are important for you to know:
A real estate option
This concerns a right of purchase granted by the property owner. That is, an option in real estate constitutes a type of contract that must be given in writing and enables closing a transaction as per the amount and date known in advance (also possible before the date). It should also be noted that the sale of the option leads us to another important term – “unique option”. In this case, several tax discounts are obtained. The need to pay sales tax, capital gains tax and purchase tax is avoided. Why? This is so as to encourage a secondary market. Implementation of the purchase is limited to a period of two years. What else should you know about the subject? The option is transferable, and if the granting of the option is implemented, the property owner is obliged to comply with defined conditions.
Obtaining a building permit and a land use scheme
If you are interested in building your home on your plot of land, or if you wish to demolish or just include a change in the property, you will have to contend with the procedure of obtaining a building permit. This is a document that is the responsibility of the local planning and building committee to grant, in accordance with a variety of conditions dictated by the zoning plan. The document must include a land use scheme (garmushka) alongside a written description. The scheme consists of a map on a scale of 1:100 that is divided into 3 main sections:
- All the details appertaining to the project, including the entities involved (architect, engineer, parking spaces, owners of rights in the property, etc.).
- A table showing the area of the building (according to the desired division and the existing areas).
- . A topographic map of the plot, including cross-sections and an environmental diagram.
“Pauschale” Agreement
A “Pauschale” contract is an agreement between the contractor and the customer, which sets a final, binding and pre-known price for the transaction. The price will be determined by the contractor based on a number of parameters, where it is common for the payment to be divided into instalments, depending on the rate of progress. It is important to make an informed determination of the milestones at which payment will be made, and the payment amount at each point. This agreement is not obligatory, it is just suggested. Some see it as an advantage and some see it as a risk. The advantage is that it enables knowing in advance what the stages are as well as the total costs, leaving no room for surprises. The disadvantage is that contractors seek to avoid risk, and therefore tend to raise prices in advance. Hence, it is always advisable to consult a professional on the subject.
Certificate of completion
The certificate comprises a guarantee that the construction work has been completed and at the same time complies with the construction plan, work plans and the building permit. The
certificate is important because it is required for connecting to electricity, sewage, telephone and water lines. After the approval is granted, it is no longer possible to claim the existence of deviations from the permit. What can be done to ensure that no work has been carried out without a permit after the certificate of completion has been received? The existing situation can be examined vis-à-vis the existing building permit.
Bill of sale
This a certificate confirming the transfer of land rights to a regulated and legal status. The certificate is issued by the Land Registrar, and includes the personal details of both parties, a description of the land, the consideration, etc.
The open public area
Quite a few people wishing to invest in real estate, find themselves confronting a large and tempting supply. This being the case, how do you know which real estate investments justify your interest and would lead to a good return? There are severable variables, but the open public area is a significant element in this equation. The open public area element concerns the development of public spaces, such as: sidewalks, playgrounds, squares, parking spaces, passageways, parks, etc.
Development Fees
Development fees comprise a series of payments intended to cover a variety of costs, where it is customary for the developer to reimburse the cost towards the obtaining of a building permit. Such as a paving levy, a channeling levy (for the purpose of preparing ditches/channels), a sewage levy, a public space levy, and a water pipe levy.
