Buying An Incomplete Property

Buying An Incomplete Property

Throughout Zambia it is quite common to come across partially completed homes on the market in their varying stages of completion. Most go on the market due to a diverse number of uncalculated, unforeseen and unplanned circumstances. Buying an unfinished home can be a fantastic route to obtaining a prime piece of property at a low cost. Unfortunately, buying unfinished homes also comes with risks. This article will help you answer the question.

There are some basic things to consider before purchasing a partially finished or unfinished home. The following list outlines some of these issues but bear in mind that it is by no means exhaustive nor is it professionally given. There exist no guarantees, warranties or undertakings, implied or otherwise. We recommend that professional advice be sought at all times. A competent real estate lawyer will carry out most of the checks before the purchase.

To learn about the pitfalls and benefits of purchasing unfinished homes, keep reading for tips and tricks that can help you with your next purchase.

Title deeds

  • Check the title of the property.  Even though the property is unfinished it must be registered with the Ministry of Lands and Natural Resources.
  • Ensure that you have complete possession. This is to say that no one has any claims on any part of the building, land or materials.
  • Check if there are rights of way or other covenants attached to the property or original site vendor.

Permits

  • Ensure that the unfinished home comes with existing planning and building permits.
  • Bring in expert help, such as certified planners and real estate lawyers to assist you to evaluate that all requirements are met.
  • Plan ahead and make sure you check and understand the permits and building codes for that particular area.

Contractor

  • Who is the registered architect, contractor or engineer who oversaw the building stages?
  • What is their existing contract and is there any insurance in place.
  • Does the insurance cover the build-to-date and completion?
  • Have any certificates been issued?

Warranties

  • Check any structural warranty and warranties for any specialist items installed, e.g. solar panels.
  • Are the warranties transferrable?
  • Acquire contact details of main tradesmen.

Financing

Bear in mind that many financial institutions are reluctant and quite hesitant to offer either construction loans or full financing for unfinished homes. The value of the property is diminished and they are at a greater risk during a resale should you default on the mortgage.

Completion costs

List ALL the remaining construction works remaining and prepare a full costing. Include an estimated time schedule for completion as the total cost will be relevant when working out the true value of the property in its existing state.

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