Difficulties and algorithm for evaluating an apartment in a new building

Buying an apartment is a very responsible undertaking. At the same time, dangers can await not only in the secondary market, but also in new buildings. After the innovations of July 1, 2021, buying apartments in buildings under construction has become a little safer, but you should not let your guard down. Any mistake when buying real estate can cost millions of rubles and years of wasted time. In this article we will tell you how to choose a developer when buying an apartment and what parameters to check.

Apartment appraisal service in a new building

Valuation of an apartment in a new building is a popular service.
It involves work to determine the market value of a residential property. It is ordered by agencies, homeowners (present and future), and banks. Market price is the most objective indicator, and it is the one that appears in many transactions. There are two possible situations when resorting to real estate valuation in a new building:

An apartment building was built and put into operation, the apartments in it were registered, they were assigned cadastral numbers.
The house is just being built, and by taking out a mortgage on an apartment in it or buying it with one’s own funds, an individual does not yet become the owner. He is only a co-investor in the construction. In this situation, an assessment is also necessary, since there is no information anywhere about the market value of the apartment and when purchasing it is necessary to be based on specific (and, very important, objective) data.

What is an escrow account?

Escrow is a special account opened in a bank for settlements under DDU when purchasing housing in a building under construction. The investor transfers money there, but the developer receives it only after the house is put into operation. For construction, he finds money from his own budget or attracts funds from outside: for example, takes out a loan.

When paying through escrow, the risks for the shareholder are reduced to a minimum. If the construction company does not comply with the terms of the agreement and delays the deadlines, it can terminate the contract and then get the money back from the bank.

Is it possible to buy an apartment without an escrow account?

The main purpose of introducing escrow accounts for settlements on real estate transactions was the safety of equity holders. But reliable construction companies can still accept money from them directly; they just need to meet a few requirements:

The first contractual agreement was concluded until July 1, 2019.
The house is at least 30% complete, more than 10% of the apartments have been sold.
The company can confirm the degree of readiness with a conclusion.
The shares sold by the company will be checked in Rosreestr along with the project declaration and registered agreements.
If the developer has received the right to work without an escrow account, he is obliged to transfer money to the fund for the protection of shareholders. In the future, compensation is paid from there if the company does not fulfill its obligations under the DDU. The contribution is 1.2% of the cost of housing.

Important! In some cases, the requirements for the minimum degree of readiness are reduced. For example, 6% is enough if the company is systemically important, builds more than 4,000,000 apartments, and there are social facilities on the site. 15% is enough if entire microdistricts are being built up according to territory development programs, schools, clinics and kindergartens are being built.

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

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

Why are there such different prices for real estate in a new building?

The reality is that the cost of approximately identical apartments is different. This is due to the fact that the price of each object depends on many factors:

Location. If you plan to buy in the city center, then you need to be prepared for the fact that the cost of the apartment will be higher than housing on the outskirts. The higher “price tag” is explained by the fact that land for development is more expensive, the demand for real estate is higher, the cost of connecting to communications is higher, etc.
Transport accessibility. The cost is affected by the proximity of transport interchanges, train stops, and metro stations.
Availability of finishing. Practice shows that about 15% of apartments on the primary market are sold fully furnished. They are more expensive, but this difference is lower than the amount that owners would have to spend on renovating an apartment without finishing.
Square.
Stage of house construction. Housing in a house under construction costs less than in one that has already been built and put into operation.

We present only a few factors. Independent appraisers evaluating an apartment in a new building take into account dozens of criteria so that the result obtained - the market value of the property - is objective. In their work they use income, cost and comparative methods.

Selecting an area

When choosing the location of the area, it is worth considering the following features:

transport accessibility of the area, give preference to areas with different types of transport (trains, buses, minibuses, metro, etc.)
look for areas near parks and walking areas
do not go to very remote areas from your closest people
try to choose houses where there is already a ready-made infrastructure nearby (clinic, school, garden) or at least these facilities have begun to be built
do not take houses where there are large wholesale trade complexes, vegetable warehouses and very large shopping centers nearby
it’s good if there is a kindergarten or school directly in the yard
give preference to houses located at a sufficient distance from others
come to the area late in the evening on a weekday and evaluate the availability of parking spaces

Why do you need an apartment appraisal in a new building?

The assessment of an apartment in a new building is carried out for different purposes:

For a mortgage.
When registering property rights.
For the court.
When buying and selling.
For insurance.
When inheriting.
In case of property disputes, for example, division of property between divorced spouses.
When receiving a non-targeted loan.

One of the common situations when a real estate appraisal in a new building is necessary is obtaining a mortgage.

Which house is better: monolithic or panel?

Today, panel houses, monolithic and brick, are more often built. Thanks to fairly cheap construction technology, panel apartments are much cheaper. They are built in 7-10 months. But such housing has many disadvantages.

Firstly, the panels have poor sound insulation and are very hot in the summer. Secondly, it can be cold in a panel house in winter. Also, in a panel house, it is impossible to remodel the apartment, since even interior partitions can serve as load-bearing walls. But a new panel building costs less, and is built very quickly, and this attracts many buyers.

Monolithic houses boast apartments with excellent layouts and high ceilings, excellent sound insulation and excellent living comfort. But a monolithic house takes longer to build than a panel house: 1.5-2 years, and the apartments in it are too expensive.

Brick houses are now being built less and less often, and they take a very long time to build. Housing in a brick house is very expensive, but the high level of comfort and beautiful apartments justify the costs. A new brick building from foundation to delivery is completed in 2.5 years.

What should you know about assessing an apartment in a new building for a mortgage?

Before registering ownership of an apartment purchased with a mortgage, you must register a mortgage on the property with the bank. The document must reflect the market value of the mortgaged (collateralized) apartment. Let us remind you that all these features and the algorithm for registering an apartment in a new building with a mortgage are regulated by the Federal Law “On Mortgages (Pledge of Real Estate)”.

The purpose of assessing an apartment in a new building for a mortgage is to determine the liquidity of the property. The appraiser needs to go to the property to inspect and photograph it and the surrounding area. If a multi-storey residential building has not yet been built, then assessing objects that do not yet exist or are unfinished is a complex procedure. In fact, the market value is determined not of the apartment itself, but of the property right to it. Appraisers carefully select analogue apartments located in similar buildings. In the situation with unfinished apartments, the factors influencing the price that we cited above are partially applied, and the specialist determines the cost taking into account the coefficients. Thus, the market price is determined taking into account inflation risks. The risk of bankruptcy of the developer company does not stand aside either. The year of completion of construction and the period of commissioning also matter.

What to look for when buying a new building?

Most often, people are interested in what questions to ask the developer when buying an apartment. First of all, you need to ask if he has a construction permit and design documentation, then read the documents.

It is also recommended to clarify:

How developed is the infrastructure, how are things going with transport links?
Are there any plans to build new facilities nearby?
Are there agreements with energy companies and other companies providing services?
Does the developer work with mortgage investors if a mortgage is planned?
What materials is the house built from?

Legal advice: the developer can answer anything. It is better to check all the information yourself by requesting documents and familiarizing yourself with the infrastructure of the area.

Who has the right to evaluate an apartment in a new building?

Not every specialist working in the field of appraisal activities can evaluate apartments in a new building and other residential real estate. When ordering an assessment, owners must determine whether the specialist meets the following requirements:

Listed in SRO.
His civil liability is insured for the amount of 300,000 rubles.
Has a higher education and at least one year of work experience in this field.

Only an appraiser who meets these requirements has the right to draw up an official document - an appraisal report, which will be accepted by the credit institution as a source of reliable and objective information. Sometimes banks require approval of the “candidacy” of an appraiser. This is due to the fact that the credit institution and clients expect different results from the assessment. The first one wants to reduce the value of the collateral property, and the second one wants to determine the value of the object as close as possible to the market value. This is one of the important reasons why banks will carefully, meticulously check the appraisal report, so it is very important to contact a professional appraiser. The result of his work will not cause any complaints from interested parties.

Apartment location

The location of the apartment relative to the cardinal directions is a parameter that many people neglect, which they later regret because:

One-piece apartments always have an advantage over linear apartments, the windows of which face one side. With this configuration, you will always have the opportunity to quickly ventilate the apartment and achieve a constant flow of air from the street. You also have more options to choose a place for a nursery or bedroom, hiding from the morning sun and from the busy street outside the window.
Housing with windows facing east or west is considered the most comfortable. On the south side it can be very hot, and on the north side the apartment can be too dark and cold.
The higher the apartment, the more sunlight you receive. On the lower floors, even with a good location relative to the cardinal directions, the sun may not reach you due to dense trees or nearby houses.
Avoid apartments with windows overlooking restaurants, clubs and other drinking establishments.

What documents are needed when evaluating an apartment in a new building for a mortgage?

The list of documents is quite extensive. It is necessary to, on the one hand, determine the legal status of the property, and on the other, to form a complete picture of the property. The appraiser must provide:

A document showing how the property in the new building was acquired (for example, an agreement on shared participation, purchase and sale, etc.).
Copies of the constituent documents of the developer company.
Cadastral passport of the apartment, extract from the Unified State Register (their copies).
A copy of the technical passport issued by the BTI (with information about the explication and floor plan).
Transfer and acceptance certificate (copy).
Identity card of the customer of the assessment.

This list is approximate and can be supplemented in each specific situation.

Layout of the apartment and rooms

When assessing the layout, pay attention to the following parameters:

a large corridor with the opportunity to create a full-fledged place for outerwear and shoes, separated from the passage through the apartment
the presence of fire escapes on the balcony. There are neighbors who are fundamentally against walling them up. Carefully study the plan of the entire floor or the entire house; such information may not be available on an individual diagram.
location of ventilation shafts and their number. Most often they are located in the kitchen or in the hallway. In high-rise buildings there may be two of them.
the apartment is adjacent to the garbage chute and the elevator shaft. It's a noisy neighborhood
connecting a common balcony to your window or balcony. This is a great way for thieves to get into your apartment.

Valuation report as a result of determining the market value of an apartment in a new building

After visiting the site and studying all the documentation, an independent appraiser carries out calculations using one or a set of methods:

Income approach – takes into account the possibility of increasing the value of the property in the future.
Cost - the amount of costs for the construction of a similar apartment is determined.
Comparative – takes into account the experience of selling apartments similar to the property being evaluated.

All calculations, photographs, conclusions are reflected in the assessment report - a document that has legal force and is accepted by the bank as a weighty argument. It is valid for 6 months. Its preparation is paid for by the future owner, that is, the one who takes out the mortgage.

On a note! Often, appraisal companies are asked to evaluate an apartment in a new building that has not yet passed the state commission and therefore has not been put into operation. Such an apartment is not registered in Rosreestr, it is impossible to obtain a certificate of ownership for it, and the bank, in turn, cannot enter a note in the register about the presence of an encumbrance. Does this mean that it is impossible to evaluate such real estate? As practice shows, it is possible. The bank gives a mortgage and receives the right to claim the future property.

Applying for an estimate of the cost of an apartment in a new building in is a guarantee of your profitable deals!

Federal Law “On Valuation Activities in the Russian Federation” (No. 135-FZ)

Federal Law “On State Cadastral Valuation” (No. 237-FZ) dated 07/03/2016

Federal assessment standard “General concepts of assessment, approaches to assessment and requirements for assessment” (FSO No. 1)

Federal Valuation Standard “Purpose of Valuation and Types of Value” (FSO No. 2)

Federal assessment standard “Requirements for an assessment report” (FSO No. 3)

Which floor to choose

If you want to buy a view apartment on a high floor, first find out whether the beautiful view from the windows will be blocked in the coming years by the next high-rise building. Experts say that only in houses on the embankment can you buy an apartment with a view, since they certainly won’t build anything on the water. The view of the park or the city can easily block the next house.

The most comfortable floors are from 4 to 8. If the elevator breaks down, it will not be difficult to climb the stairs to your apartment. At the same time, on these floors you don’t particularly hear car noises and screams from companies on a spree at night. For those who do not have children and who are not afraid of the prospect of climbing stairs in case of elevator failures, it is worth considering the option of the last floor, especially if the window offers a beautiful view of a park or pond. This option is also convenient for lovers of silence, since no one will run over you from above and there is little chance of leaks, unless, of course, the developer has conscientiously waterproofed the roof.

You should be especially careful when purchasing an apartment on the second or third floors. If there are non-residential premises on the 1st floor, your life can turn into hell. All night you'll hear the hum of refrigeration units or drunken songs from the pub below you. There is also a high probability of seeing the entrance canopy that is always dirty and welcoming cockroaches from the store below you. An additional nuisance can be the exhaust gases from cars that take a long time to warm up in winter right under your windows.

Why you should contact us

Guarantee. Several cooperation options for your convenience. You pay only for the result! The liability of each of our appraisers is insured under an insurance contract.

Efficiency. By calling our company, you get in direct contact with a specialist. You don’t need to explain your problem several times and listen to ringtones on your phone endlessly. At any stage of interaction with the company - from the first call to specialists to the assessment - the Customer can count on a quick and effective solution to their issues.

Convenience. It is you who choose the day and time of inspection of the property being assessed. You don't need to reschedule any business. We will arrive when it is convenient for you.

Quality. In our company, each conclusion - assessment report - before printing, undergoes a two-stage check for compliance with the standards of expert activity - checked by a leading expert and the head of the organization.

Reputation. Why take my word for it? Look at the reviews from our Clients. Maybe your partner is among them?

Professionalism. We employ certified specialists who are members of a self-regulatory organization and have a license.

Good practice. More than 300 won cases.