Both possibilities have advantages and disadvantages, therefore, they must be well studied. Today, we are going to present as much information about the real estate consortium.
Want to better understand how it works? Read on!
What is the real estate consortium?
The consortium is a kind of “collective purchase”.
It is based on the formation of groups, in which each member wants to acquire a good of equivalent value to that of the others. In the case of real estate, everyone seeks to buy or renovate a property. However, for this to be possible, there is a monthly fee.
The real estate consortium is a plan in which the person obtains his property only in the long term and the receipt of the property is conditioned to the number of installments paid. On the other hand, the buyer can count on luck.
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How it works?
Once part of the consortium, the members periodically participate in meetings, or meetings. At each meeting there is a drawing in which some people are awarded the advance of the property.
However, only those who are up to date with monthly payments can participate. So it is good to keep an eye! Whoever is selected receives the right to use the letter of credit, which is the value of the transaction.
Imagine a consortium group with a letter of credit of R $ 200 thousand. A person is drawn in the sixth month and, from that moment, can use that amount according to the contract. With that, he selects the house he wants to buy and informs the company, which carries out the acquisition.
In addition, it is important to note that sweepstakes are not the only possibilities for obtaining a letter of credit . The buyer can offer bids, which act as "advances" of the amount to be paid.
They are of three types:
- free: each participant provides the amount that is comfortable and the largest is contemplated;
- fixed: stipulated by the administrator, represents a percentage of 20 to 30% of the letter of credit. Everyone who gives this amount participates in a separate draw;
- embedded: paid with a discount of the letter of credit. It is available to all participants, but leads to a lower receipt at the end.
Thus, it is a great option to bid when you have money saved. The entry of a loan, for example, can be offered as a bid in the consortium to anticipate contemplation.
The entire process is conducted by an administrator, who is responsible for forming the groups, establishing the rules and making the draws. In the case of the Caixa consortium , for example, the bank manages the groups.
In addition, it is not necessary to pay an entrance fee to participate in the real estate consortium. In fact, there is no interest on the credit contracted.
Attention to the fees charged!
Although there is no need to make an entry and there is no interest, it is necessary to be aware that there are other fees that may be charged, for the protection of the administrator. They focus on the plot, so it is essential to keep an eye on.
See which are the main ones:
- management fee: it is the remuneration of the administrator for carrying out the consortium, charged on the full amount of the letter of credit;
- common fund: as it is responsible for forming the “cashier” of the group, it is the largest of the installment. It is calculated based on the letters of credit, the number of participants and the duration of the group;
- reserve fund: it serves as an extra protection - mainly, against default. It has a fixed amount, is divided by the total installments and represents a small portion of what is paid;
- insurance: the fee is aimed at contracting protection policies. The most common include payment in the event of default, death or unemployment.
Is luck worth counting on?
Consortia last, on average, 10 years. When you rely only on luck, you can be contemplated in the first month or only in the last. Without bidding, you may have to pay years before receiving the property.
In addition, if you live on rent, the value of the consortium adds up to that cost - and can weigh on your budget. For anyone who lives in a favor home or needs to move quickly, it is also a problem. After all, you cannot predict when contemplation will happen.
So it’s important to have a good bid strategy in order to anticipate the use of value.
What are the advantages of a real estate consortium?
One of the main benefits of this alternative is that it does not count interest and can be taken into account more than a loan, for example. In addition, there are other aspects that deserve to be highlighted. So, see what are the advantages of the consortium!
It's a way to save money
Those who do not have much financial control see, in this option, a chance to save. With this collective “savings”, it is easy to collect what is necessary to pay off the value of the home.
Contemplation can be quick
As we said, maybe you will be drawn right away. Then you can negotiate the purchase without having to wait so long.
The letter of credit improves trading
With contemplation, it is possible to acquire a property in sight. This increases the bargaining power and favors the achievement of discounts.
Usage includes reforms and debt elimination
Although the real estate consortium is widely used for purchase, this is not the only alternative. You can use it to renovate and even to end the debts of a property.
FGTS can be used
In addition, you can use the FGTS to amortize the amount, reduce the installments or bid. For those who receive a good amount, it is the chance to complete the acquisition of the home itself.
What are the disadvantages of the consortium?
Despite the benefits, you cannot ignore the negative aspects. Knowing what is not so good is important for you to make an informed decision. After all, nothing better than knowing what you're doing, right?
So, discover some points of attention about the real estate consortium:
Other investments are more profitable
Although it is a way of saving money, there are other, more advantageous alternatives. Investing this total in public or private bonds offers higher returns, for example.
Fees are high to save
When you look at how the real estate consortium works, you notice that, in practice, you pay to save. With discipline, it is possible to save the same amount and not have to pay anything for it.
The value of the installments may increase over time
Over the duration of the group, the parcels may become larger. The readjustment is mainly due to the INCC . It is something that prevents the loss of purchasing power of the letter of credit, but increases the costs. In addition, a high number of defaulters increases the collection so that it is possible to maintain the draws.
Payment continues after contemplation
Many people forget this, but contemplation does not end their obligations to the consortium. If there are still installments to be paid, you must pay off all the debt so that the property is no longer sold.
Luck is unpredictable
As we said earlier, depending only on luck makes everything a little unpredictable. Thus, it is not possible to know when contemplation will occur.
Real estate financing x real estate consortium
In addition to the consortium, there is another well-known form of property acquisition: financing . It consists of diluting the purchase price in several installments. It can last from 20 to 35 years and has an interest charge.
As for the installments, there are different types of amortization . There are financings that start more expensive and end cheaper, while others have constant costs.
It is a myth to think that consortia are less demanding with credit analysis. All institutions want to have minimum guarantees, so it is necessary to present certain conditions. Even in financing, this study has become simpler today.
The biggest advantage of financing is that it is possible to start the process and already move. For those who live on rent , it is a chance to use the amount paid monthly to acquire the property itself.
In addition, financing can bring a higher level of security.
Large banks and construction companies usually offer reliable and recognized lines. In the consortia, there are some fraudulent companies. In any case, it is always important to keep an eye on and check the suitability of the institution and the solution.
After all, what is the best way to buy a property?
The answer to this question is individual. The ideal is to analyze your reality, your conditions and your expectations.
Those who need to move quickly should opt for financing. Those who can wait and want to pay a lower final value, can choose the real estate consortium. There are many situations in which one solution stands out from the other.
The important thing is to be careful with the decision. In both cases, the property is the guarantee for the company. So, it is essential to avoid the accumulation of debts, as this leads to default and loss of property.
Therefore, analyze clearly. Before making any financial commitment, find out and do good planning. With your dream at stake, the ideal is to consult specialists - and we at LAR Imóveis are always willing to help!
Investing is the best way to use your money and we want to help you do that! You already understand what a real estate consortium is , now get to know the real estate investment funds and expand your possibilities of doing business!