How to buy an apartment in installments from a developer or an individual?

Purchasing an apartment in installments is an excellent option for improving your living conditions if you don’t have all the money needed for the purchase at once. For those who want to live in a new building in an eco-friendly area not far from the capital, the modern real estate market has a number of interesting offers in the Moscow region. By purchasing a new building in installments, you get many advantages. This scheme involves a flexible payment schedule, and is also characterized by ease of paperwork and fairly favorable terms of receipt.

What does an apartment on installments mean?

Installment is a method of paying for real estate in which the buyer makes payments within the established time frame according to the contract. First, an initial payment of 10% is usually required, then the rest of the amount in installments.

Most often, installment plans are used when purchasing an apartment from a developer, and less often from individuals. This is because most sellers need money right away to purchase a home. Construction companies make money from this, and it is profitable for them to sell apartments in this way.

Types of installments

There are several types of installment plans for the purchase of real estate:

1. Interest-free when the buyer does not overpay.
2. Interest, when an interest rate is charged on the balance of the debt, like in a bank.

Interest-free installments are more profitable. It is most common among developers who need to sell apartments faster.

Note! Installment plans are provided by agreement of the parties under any agreements: agreement of shared participation in construction (DDU), sale and purchase agreement (PSA), assignment of the right of claim. The DDU is concluded when the house is under construction. DCP – when it has already been put into operation. An agreement on the assignment of the right of claim is drawn up by a shareholder who has bought an apartment that has not yet been built, but wants to sell it to another person.

What you should pay special attention to in an installment plan agreement and its sample

Concluding an installment payment agreement is one of its most important parts. It is important to establish and discuss all aspects related to payments, overpayments, fines and sanctions. There are many situations and conditions in the installment payment agreement that need to be paid attention to and studied in more detail, perhaps even by consulting a legal agency.

First of all, pay attention to:

1. documents that confirm the adequacy of the person providing the installment plan. A prerequisite is that your borrower in the installment agreement for the purchase of real estate must be the developer from whom the apartment is being purchased.
2. The amount of the first payment must be specified in the contract.
3. Some organizations indicate that they have the right to increase the amount of payment (change the cost of housing) in the event of inflation and other circumstances, up to changes in the exchange rate for national or foreign currencies. The buyer must pay attention to this point and, if anything happens, state that the price should not change under any circumstances.
4. The conditions for early repayment must be specified in the contract. If the buyer will be able to repay the loan before its expiration date, this must be stated in the contract. Developers who offer installment plans with interest are not interested in the client repaying the loan ahead of schedule. Often they stipulate this point in the contract, thus insuring themselves.
5. Transfer of ownership rights from the developer to the buyer. The developer may indicate several moments of transfer of rights to the buyer - after full repayment of the payment, at the time of the down payment or after putting the apartment into operation. It’s worth discussing this point and choosing the best one, whether for you or for the developer.
6. The contract must stipulate responsibility for failure to fulfill the obligations of each party.
7. Possibility of re-registration of agreements. If the buyer becomes insolvent, the person specified in the contract will pay off the installments for him.
8. You can enter into an agreement that will stipulate the possibility of transferring the installment payment into a mortgage loan if it is more profitable for the buyer to repay or if it is easier to pay. It is also an insurance option for the borrower in the event that the buyer is unable to pay under the previous installment payment arrangement.

Who is suitable for installments for an apartment?

Before purchasing an apartment in installments, you need to familiarize yourself with the nuances of the transaction. This purchase option is suitable only for those who have a consistently high income:

1. Installment plans from the developer are issued for a limited time, usually 1-3 years. During this period, you need to completely repay the debt, the payments will be impressive.
2. Installment terms for individuals are more flexible. If we can reach an agreement, we can arrange it for 5 years. But the payments will still be large compared to a mortgage.

Example. A man bought an apartment in installments from a developer using a policy for 5,000,000 rubles. The debt must be repaid in 36 months. Initial payment – ​​500,000 rubles. (10%), balance of debt – 4,500,000 rubles. The monthly payment will be:

4,500,000/36 = 125,000 rub.

There is also an advantage - in any case there will be no overpayment on interest-free installments.

Note: buying apartments in installments is beneficial for the self-employed and individual entrepreneurs. Banks are less willing to approve mortgages for them than for those working under employment contracts. Developers have more flexible requirements.

How to buy an apartment by transfer of rights in a new building?

Is it possible and how to buy an apartment with a mortgage from a relative?

New buildings in installments from FSK Leader

For 2015, FSK Leader offers the following options for installment plans for apartments in new buildings:

>Promotions in the Skolkovsky UP-quarter

>Promotions in “New Tushino”

>Promotions in the UP-quarter "Olympus"

>Promotions in the New Izmailovo microdistrict

In addition, FSK Leader constantly launches new installment programs for its clients. You can call the manager of any facility from >our section to find out about installment plans.

How does an installment plan differ from a mortgage?

There are big differences between a mortgage and an installment plan:

Types of payments for apartment installments

There are two types of installment payments for real estate with and without additional commission:

1. An interest-free installment plan is a scheme for repaying the debt amount upon actual payment. The remaining debt after the down payment for housing is simply broken down into parts and paid without additional charges. The payment schedule is drawn up by agreement - monthly or quarterly. Such conditions are offered by developers or private sellers when selling economy class housing or for short-term contracts for up to 6 months.
2. Interest-bearing installments are an option for long-term repayment of the balance of the debt when purchasing a home, in which a commission is charged on the remaining amount. The average interest rate is up to 12% per annum; for most developers, rates vary between 2-5%.

An important difference between a mortgage and an installment loan is the term of the agreement. The mortgage is issued for a long term of up to 25 years, the purchase and sale agreement with installments is concluded for a period of 6 months to 3 years, maximum 5 years. However, these conditions are determined by the requirements of the developer or an agreement with the home seller.

Installment plan when buying an apartment in a new building: conditions, procedure

First, the buyer needs to find a developer and check official registration, availability of a building permit, and design documentation.
It is important to review installment plans carefully. What to do next:

1. If you are satisfied with the developer and the apartment, enter into a DDU or DCP and register everything with Rosreestr.
2. Receive a final package of documents from Rosreestr.
3. Make payments under the contract on time.

When construction is completed, you need to check the quality of the delivered apartment and sign a transfer deed, then register ownership.

Contents and sample agreement

The DDU or DCT with the developer must contain all the information about the transaction and installment plan:

1. Name, INN, OGRN, full name head of the selling company.
2. Full name, date of birth, passport details of the buyer.
3. Information about the property: area, number of rooms, cadastral number (if assigned).
4. Information about the installment plan: cost of housing, size of the down payment, installment period, amount of mandatory payments and payment deadline.
5. Liability for failure to fulfill obligations by the parties.
6. Rights and obligations of the parties.
7. Signatures of the parties to the transaction.

Documentation

To conclude a transaction with the developer, the buyer will need a passport. The seller must provide design documentation and a construction permit.

Expenses

When purchasing an apartment in installments from a developer, there are usually no additional costs. You only need to pay the state fee for registering a preschool educational institution - 350 rubles. Transfer of ownership under the DCT will cost the buyer 2,000 rubles.

Construction companies prepare documents themselves, so there is no need to spend money on lawyers.

Terms and requirements

What conditions and requirements must be taken into account in order to receive an installment plan to purchase an apartment?

1. The buyer must have a down payment amount. It can be from 10% and higher, but it must be at least 10% of the entire cost of the apartment.
2. A prerequisite for making an installment payment is the presence of a document that confirms your identity, that is, a passport.
3. Willingness to bear full responsibility for arranging installment plans and make monthly or quarterly payments in good faith.

This concerns the requirements for the buyer.

It is worth considering that the developer also has requirements that he undertakes to fulfill in the case of providing installment plans for real estate.

1. Official registration and documents that confirm it.
2. Availability of a building permit, which is approved by the municipal authorities and the chief architect of the city.
3. The authorized capital must be at least as required by law.
4. The developer must have programs that provide for installment payments for real estate that the developer disposes of.

Purchase of real estate in installments from individuals

Purchasing an apartment in installments from an individual owner is a more complicated procedure than from a developer. In the first case, you will have to negotiate an installment plan, and not everyone will agree to this. Companies are focused on selling real estate as quickly as possible, and most of them already have installment plans.

How to buy real estate from an individual:

1. Find a suitable apartment, agree on installments and other terms of the transaction with the owner.
2. Conclude a contract by transferring a deposit as a down payment.
3. Submit documents to register the transfer of ownership to the MFC or directly to Rosreestr.

Ownership will be transferred to the buyer within 7-9 days. The DCT specifies an installment plan, so until the debt is fully repaid, the housing will be pledged to the seller. The new owner will not be able to donate, sell or exchange it. When the debt is repaid, you need to take a receipt from the seller and submit it to Rosreestr, then the restrictions will be lifted.

Contents and sample agreement

The contract for real estate in installments with an individual must contain the same information as with the developer. But instead of the organization’s details, the seller’s full name, passport details, date of birth and registered address are indicated.

What other information will you need:

1. Guarantee that the apartment is not mortgaged.
2. Methods and procedure for installment repayment, amount of payments, validity period.
3. Information about the transfer of the object as collateral to the seller until the debt is repaid.
4. Signatures of the parties.

The DCP is drawn up in at least three copies. One each remains with the seller and the buyer, the third is transferred to the registrar.

Documentation

To buy an apartment in installments, the buyer only needs a passport. The seller presents a full set of documents:

• extract from the Unified State Register of Real Estate;
• passport;
• the document on the basis of which he registered ownership.

You will also need an extract from the house register and a certificate of absence of debts for housing and communal services.

Expenses

The seller pays a state duty of 2,000 rubles. for the transfer of ownership of it. There may be other costs:

1. If the DCT is certified by a notary: 0.5% of the cost of housing, maximum 20,000 rubles.
2. If the DCP is drawn up from a lawyer – from RUB 2,000. Notaries charge more - from 3,000 rubles.
3. If notarized consent of the seller’s spouse is required for the sale – 500 rubles. for a certificate, from 1,000 rubles. for registration at a notary office.

Lawyer's advice: to be on the safe side, it is better to entrust the transaction to a lawyer. Unlike a notary, he will fully check the transaction for legal purity. Notaries, for the most part, only check submitted documents.

List of required documents for installment plan

A purchase and sale transaction involves the re-registration of ownership rights from the seller to the buyer in Rosreestr. To conclude a transaction, it is necessary to collect a certain set of documents, which includes:

1. Technical passport of the apartment. It is issued at the BTI within a month and is valid for a year. The cost of a passport is 1.5-2.3 thousand rubles.
2. An extract from the house register containing information about all registered/discharged persons. It can be done at the passport office at the location of the property. It is preferable that at the time of entering into a transaction there are no registered persons in the apartment.
3. A copy of the financial and personal account confirming the absence of debt for utility services. It must be obtained from the EIRC.
4. An extract from the Unified State Register of Real Estate confirming the legal status of the owner and the absence of encumbrances in the form of pledge and arrest.
5. Seller’s title documentation: previously concluded purchase and sale agreement, gift agreement, etc.
6. A document confirming the rights of the representative, certified by a notary (when selling an apartment by power of attorney).
7. Consent of the spouse to the transaction (if the apartment is jointly owned) or the guardianship authorities (if there is a minor among the owners).
8. Agreement for the sale and purchase of an apartment with payment in installments.
9. Application for re-registration of property rights from the parties (from the seller about the alienation of property rights, from the buyer about entry).
10. Receipt with paid state duty in the amount of 2000 rubles. It can be paid by the buyer or seller. Payment can be made after submitting documents for state registration within 5 days.

Thus, to conduct a transaction for the purchase and sale of an apartment by installments, a standard set of documents will be required.

Selling an apartment in installments: risks

The seller has quite a lot of risks when selling an apartment in installments:

1. If it is likely that the buyer will stop making payments or will be constantly late in making payments.
2. If the buyer decides to terminate the deal, there is no guarantee that the property will be returned in its original condition.
3. If the buyer stops paying under the DDU, it will have to be terminated through the court.
4. If the installment plan is interest-free, before full repayment, part of the money will be “eaten up” by inflation.

The buyer's risks are minimal. He may face problems if he loses income and the ability to pay in installments, or the seller refuses to remove the encumbrance after paying off the debt. But sellers generally take more risks.

Buyer's instructions

What is the procedure for applying for installments? Let us highlight the most basic stages of choosing and applying for an installment payment plan for the purchase of an apartment:

1. Find a developer who has such a program.
2. Study the history of the developer’s work in this market segment. Find out how reliable and responsible he is, whether there have been any problems with past projects before, what feedback from clients who took and repaid installments from this developer.
3. It is necessary to demonstrate a desire to register a DDU and submit documents for registration of an installment plan.
4. Conclude an agreement with the developer and register it with the authorities/
5. Comply with all terms of the contract and pay payments on time.

Housing in a new building

Often, installment plans are issued specifically when purchasing apartments in new buildings.

Firstly, the housing is fresh, it will be cheaper than apartments that have already been put into operation.

Installments are taken during the construction period and payments begin from the moment the contract is signed, but there is another option. The first involves the signing of a participation sharing agreement (DSA). The second option provides for installment payments when the house has already been put into operation and this type is drawn up on the basis of a real estate purchase and sale agreement between the buyer of the property and the seller, an individual.

This option is more complicated and is rarely concluded, since such conditions are not always beneficial to the developer.

In such cases, price changes are also used. It is worth considering that if the developer has agreed, he can stipulate in the clause that the price of the apartment will change (increase, as practice shows) when the house is put into operation.

Secondary

As a rule, secondary housing is less likely to be arranged in installments. Apartment owners do not want to deal with such a complicated procedure for them and delay the transfer of ownership.

This option is used when an apartment is sold to relatives or friends, and even then rarely. To purchase and apply for an installment plan, an apartment purchase and sale agreement is made and signed, all points that are related to payments and agreed upon by both parties are entered, information about the first payment, the moment of transfer of the home into ownership of the buyer and sanctions that must be written down are also entered. case of delayed payments.

No down payment

Regarding taking out an installment plan for an apartment without a down payment, one thing can be said - this is quite rare, since it is not profitable for either developers or apartment owners to take such risks. We are mainly talking about mortgages.

State assistance

The state can provide assistance in obtaining installment plans. This is true. There are various loyalty programs that provide financial assistance from the state to those in need. But it's not so easy to get it. To do this, you need to meet the selection criteria based on age, income, or be in military service, or work in government agencies.

Basically, such programs are developed for young families or youth in general.

Buying real estate in installments: advantages and disadvantages

For the seller, the main advantage of installments is that he will sell illiquid real estate faster. If the apartment is in good condition and located in a convenient area, there is no point in agreeing to such a deal with a stranger.

There are still more disadvantages for the seller, and they are directly related to the risks mentioned earlier.

For the buyer, installment plans are beneficial, especially interest-free, if the entire amount is not available for the purchase of real estate. If he stops making payments, he may be subject to liability in the form of fines and penalties provided for in the contract.

Advantages and disadvantages

Installment plans for purchasing an apartment have both their pros and cons.

The advantages of making an installment payment are:

1. possibility of making a partial down payment. There is no need to pay 100% of the cost of the apartment at once.
2. Minimum overpayment. If the buyer is offered an installment plan with an interest rate, it will be 12-12.5% ​​per annum, and if there is a loyalty program, then the overpayment will be no more than 5-10% of the original cost of the apartment.
3. There is no control over the buyer's income by the lender. The borrower is not interested in either a certificate of income or information about the client’s solvency.
4. The cost of housing will not increase due to overpayments. If you are an investor, then you can resell the purchased property and make money on it. Usually people who have capital invest money in unfinished real estate and then earn good money on its resale. This is one of the types of investing capital in real estate.

Along with the advantages, installment plans also have their disadvantages:

1. The installment plan must be repaid even if the buyer is in a “long-term construction” phase or the construction was frozen due to bankruptcy or other circumstances.
2. If the buyer does not make payments on time, he will face serious fines and penalties. Installment plans provide for timely payment of each subsequent payment.
3. An installment payment program for the purchase of real estate may not be available for all types of real estate. For example, for less popular apartments on the market.
4. With an interest-based installment plan, as with a mortgage loan, the buyer will be subject to an overpayment. This is normal for this type of lending.
5. Not all developers have the opportunity to offer their buyers a real estate installment program. Unfortunately, this narrows the search and choice of apartments. If apartments are in demand and are being snapped up, developers usually curtail the installment plan. They prefer to receive 100% payment for real estate immediately.

Responsibility for late payments

The contract may provide for liability in the form of fines and penalties for the buyer in case of late payments. Based on Art. 332 of the Civil Code of the Russian Federation, the seller has the right to recover a legal penalty from the buyer, even if it is not specified in the contract - 1/300 of the refinancing rate of the Central Bank of the Russian Federation for each day of delay.

Based on clause 2 of Art. 489 of the Civil Code of the Russian Federation, in case of violation of obligations, the seller has the right to demand the return of real estate, refusing to execute the contract.

An exception is the situation when the buyer has already paid half the cost of the apartment: in this case it is not returned, but to resolve the issue you will have to go to court.

Personal income tax when selling an apartment in installments

If the property has been owned for more than 5 years, there is no need to pay personal income tax. When receiving housing under a gift agreement, as a result of privatization or as an inheritance, the minimum tenure is reduced to three years. In other cases, you will have to pay tax.

Note: if there are documents confirming the costs of purchasing a home, the amount from the sale can be reduced by the amount of the costs. In this case, personal income tax is paid on the difference. For example, if an apartment was purchased for RUB 5,000,000 and sold for RUB 5,500,000, only RUB 500,000 is subject to personal income tax.

You can declare income and submit 3-NDFL in any tax period. For example, if an apartment costs 3,000,000 rubles, and the payment is divided into two parts of 1,500,000 rubles each. (in 2021 and 2021), you can report first in 2021, and then in 2021 for the specified amount. Or submit a declaration in 2021 after the buyer has completely covered the debt (Letter of the Federal Tax Service dated February 11, 2015 No. BS-4-11/2049).

Lawyer's answers to private questions

Is it possible not to pay installments for an apartment if construction is stopped?

No, otherwise the developer will be able to demand a penalty for non-payment. Failure to fulfill obligations by a company is its sole responsibility. The shareholder will also be able to collect a penalty if the apartment is not delivered to him on time.

Is it possible to conclude a contract for an apartment in installments with the employer, so that he can then deduct the obligatory payments from the salary?

Yes, this is not prohibited by law. But if the buyer quits, this will not relieve him of his obligations under the policy.

Is it possible to buy an apartment with installment payment if it belongs to a child?

No. The transaction requires permission from the guardianship authority, and no one will approve the installment plan.

Is it possible to terminate a contract with installments concluded a year ago if I want to sell the apartment and move to another place?

Yes, but the seller will demand full repayment of the debt, and only after that Rosreestr will remove the encumbrance. You can also agree with him to cover the debt using a large deposit from the buyer.

Is it possible to get a property deduction if an apartment is purchased in installments?

Yes. To do this, you must annually submit a declaration and documents confirming the repayment of payments for the tax period.