Can you imagine paying hundreds of thousands, or even millions, to buy a house that hasn’t been built yet? You are buying that house based on an idea, a plan, and 3D images. This is off-plan sales, a real estate sales method that is particularly prevalent in large projects and modern residential communities. 

But the question remains: is it a smart investment? Or is it a risk that could cost you a lot? Can we fairly evaluate this type of property before it goes from an idea on paper to a building on the ground? In this article, we will provide an in-depth explanation of the concept of off-plan sales, its advantages and disadvantages, and how to evaluate a property before it is built, so that you can make an informed decision with confidence.

What does off-plan selling mean?

  An off-plan selling system occurs when an investor purchases a property unit that has not yet been constructed. In most cases, the real estate developer sells before construction to obtain the funds needed to complete the project. But is there any benefit to this? Below, we explain the most important advantages of buying off-plan property:

• Reasonable prices: As mentioned, the real estate developer resorts to selling properties before construction to complete the project, making it a good opportunity to buy at reasonable prices, especially with the availability of many properties. 

• Affordable prices: Real estate developers resort to selling properties before construction to complete their projects, which makes it an opportunity to buy at affordable prices, especially with the many offers and discounts available when purchasing in the pre-construction phase. The price difference between these properties and those that have already been built can be as much as 20-30% lower. In addition,  real estate prices rise over time. Once construction is complete and there is real demand for the project, prices may rise significantly, so in that case, buying off-plan property is a real investment. 
• Various options: When buying a property, some options cannot be controlled, such as the floor, the direction of the unit, and its type. Unlike the off-plan sales system, you have many options available, so you can choose between multiple types of units, choose the floor you prefer, the area, and many other options that meet your needs. 

• Design you like: One of the most important advantages of buying a property that has not yet been built is that it is an opportunity to own a property with your specifications in terms of design, flooring, woodwork, kitchen design, sanitary and electrical fittings, and all other designs according to your taste and your family’s needs.  

• Best return on investment: Real estate investment is one of the safest types of investment in the long term, and off-plan investment is a smart investment where you can benefit from the maximum potential gains through various benefits and price discounts that the buyer gets, reducing the actual cost of purchasing a built property. It is also a potential source of rental income, providing the investor with a steady income. 

These are the most important and prominent potential benefits that a real estate investor can gain when buying off-plan. At Aain, we help real estate developers and investors evaluate properties before construction, where a valuation company helps you make the best decisions.  

What is the off-plan sales system? 

The off-plan sales system in Saudi Arabia was issued by Royal Decree No. (M/44) dated 10/3/1445 AH. This system is one of the important regulatory mechanisms that aims to regulate real estate sales projects before their completion, whether they are residential, commercial, tourist, office, industrial units, or even developed land.

The Ministry of Municipal, Rural Affairs and Housing’s Wafi program oversees this system and is the official body responsible for licensing and monitoring off-plan sales projects to ensure that the rights of all parties (developer, buyer, financier, and contractor) are protected.

The system requires real estate developers to obtain prior approval before selling any off-plan units. It also requires the opening of a separate bank account for each project, into which all amounts paid by buyers are deposited and from which funds are disbursed only by specified completion rates and under the supervision of a certified accounting authority, known as an escrow account. 

One of the most important objectives of this system is to enhance trust and transparency in the real estate sector, protect buyers and investors, regulate the relationship between developers and buyers, and support self-financing of real estate projects. 

In conclusion 

Off-plan sales are an important investment that contributes to many benefits and gains for investors, and the Off-Plan Sales Law greatly contributes to regulating the real estate development sector and enhancing trust between all parties involved, including developers, buyers, and financiers. However, property valuation remains an essential step that cannot be ignored before making a purchase or investment decision. 

This is where the certified real estate valuer comes in as a neutral and professional party, providing an objective and accurate assessment of the true value of the property before it is built, taking into account many factors such as location, project quality, and market prices.

 This helps them make investment decisions based on accurate information, which reduces potential risks and guarantees their rights under the off-plan sales law. project quality, and market prices. This helps them make investment decisions based on accurate information, reducing potential risks and guaranteeing their rights within a clear and transparent legal system. At Aain, we help you make confident decisions. Contact us now for a professional real estate valuation that guarantees you a safe and successful investment!