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.

Required documents

Applying for an installment plan from a developer is not a very troublesome action, since a minimum package of documents is required. Among them:

1. Apartment buyer's passport;
2. Notarized consent of the buyer's spouse;

Before concluding a contract, you must familiarize yourself with the documents for the residential building in which you intend to purchase an apartment. The developer must provide:

• Title documents for the land plot on which the apartment building is located;
• Project documentation for the real estate;
• Project justification documentation;
• Report on the state examination (in the form of a certificate).

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?

The essence of the scheme

As a rule, apartments in new buildings are purchased in installments according to the following scheme. First, the buyer pays a down payment ranging from 10 to 70% of the cost of the property. The amount of this amount largely depends on the stage of construction of the new building. The balance is paid by the buyer in equal installments over a specified period or according to a schedule agreed with the seller. Perhaps, for example, this option: the terms of the first and last payment are fixed, and the buyer decides the frequency and amount of payment independently. In most cases, installment plans for an apartment range from 6 to 12 months. It is important that the debt is fully repaid before the new building is handed over to the State Commission.

How does an installment plan differ from a mortgage?

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

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.

Advantages of purchasing housing in installments

1. To formalize an agreement between the seller and the buyer, much fewer documents are required. The procedure for concluding a contract is simpler.
2. The price of the apartment specified in the contract is fixed.
3. Interest rates on a mortgage loan increase the final cost of real estate, sometimes several times.
4. When buying an apartment in installments, the commission amount is significantly lower. Moreover, some developers and homeowners offer interest-free repayment of the remaining cost.

The procedure for applying for an installment plan for real estate has been simplified as much as possible. To conclude an agreement between the seller and the buyer of an apartment, additional risk insurance, which is used by banks, is not required. There is no need to look for guarantors, pay bail, or pay extra insurance. Usually it is enough to have a passport and money for a down payment. By concluding an agreement to purchase housing in installments, the buyer simply receives the right to pay the residual value of the apartment in installments.

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.

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.

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.

Installment payment agreement: what you should pay attention to

Each developer company creates individual terms for the service, but there are a number of mandatory provisions that are reflected in each agreement and require close attention. These include:

1. An indication of the party providing the installment plan (the developer himself must be indicated as such; if the installment plan is provided by a bank, then this is a different type of obligation, which determines other payment terms, fees, interest rates, etc.);
2. The amount of the contribution, the regularity of payments and the possibility of increasing them (the amount of the contribution must be calculated individually and must be reflected in the contract);
3. Early repayment;
4. The moment of transfer of ownership of the apartment (after making the down payment; after repaying the installment obligation; after putting the housing into operation);
5. Penalties and penalties for late payment (if the terms of payment are regularly violated, the developer may provide for the possibility of unilaterally terminating the contract and deduct a commission from the previously paid amount upon its return);
6. Transfer of obligations to another person (does the company allow the contract to be reissued to another person? This becomes relevant when the original borrower understands that he cannot cope with the imposed burden and wants to resolve the situation as profitably as possible);
7. Possibility of converting the obligation from an installment plan to a mortgage.

Download the installment payment agreement for an apartment with the developer (sample)