The real estate consortium has become a good alternative for those who want to purchase a property, new or used, or want to renovate/expand construction in their own property.
It has also been widely used by people who already have unpaid property and want to get rid of bank financing debt due to its high interest rates.
Discover the benefits and implications of this type of purchase and investment.
One of the main advantages of buying a consortium quota is that you are not hostage to the high-interest rates and terms of existing financing and you can search the market for the property you want to buy, paying a lower installment value, which is the main nature of the consortium.
How does the real estate consortium work?
When you buy a consortium share, you become part of a group of consortium members whose purpose is to make a “savings” for the purchase of real estate through self-financing.
All members of the group pay monthly fees, calculated according to the credit contracted, plus the administration fee and reserve fund. It is important to note that the consortium does not charge interest as in bank financing.
Every month, raffles and bids are offered by the consortium members, with the aim of achieving contemplation and taking possession of the long-awaited letter of credit.
Many consortia allow you to use the FGTS (Guarantee Fund for Length of Service) to make bids or, if necessary, complement the value of the letter of credit contemplated at the time of purchase of the property or pay off the installments that are to come.
There is the possibility of using your letter of credit for the full settlement of an existing mortgage, thus saving a good amount of money. All are according to the rules defined by CEF.
Another advantage of the real estate consortium is that as the consortium members are awarded, the number of participants in the group decreases, so the chances of being included in the monthly draw increase.
When contracting the plan, the administrator indicates the best group option for the client, according to its objective.
A consortium is an option for those who are in no hurry to move and are thinking about the future. But if you are in a hurry, the purchase of a letter of credit that has already been included is undoubtedly the solution, as you can purchase the property immediately without having to wait to be awarded by bid or raffle and it is not necessary to have the total value of the property for your cash payment.
Unlike the common consortium, in which you join a group, pay the monthly fees, participate in the draws and can offer bids in an attempt to be considered, by buying a consortium quota that has already been contemplated, you have credit in the act.
You pay a down payment, which varies according to what has already been paid for that share of the consortium and the rest of the credit is paid in installments. The letter of credit allows the consortium member to obtain the good insight, thus, it becomes possible to negotiate with the apartment seller a better price and discount.
Credit release of the contemplated quota
The release of the credit for the considered quota occurs when the consortium member, awarded by bid or raffle, has the right to receive the credit before finishing paying the consortium and which will be paid directly to the person or company that is selling the property.
The letter of credit can be used for the purchase of any type of property, renovation of own property on behalf of the consortium member, or for the construction of property on land owned by them.
Solution for those in a hurry: With a down payment, it is possible to buy a share already covered and obtain credit immediately
As mentioned earlier, it is also possible to settle a bank loan on behalf of the consortium member. To do so, it is necessary to send the consortium administrator all the documentation necessary for the analysis and comply with the guarantees for the credit to be released.
Precautions to be taken before purchasing a consortium share or contemplated letter of credit
Scams are frequent when buying and selling contemplated cards, which requires maximum attention and research before the transaction. Marcio Moreira, a resident of Monte Mor, São Paulo, was experiencing financial difficulties when he announced the sale of his quota on the internet:
“Several applicants appeared with even tempting proposals”, says Marcio, who after consultations with CNPJs and on Reclame Aqui, ended up opting for ConsórcioCRED, a specialized company located in the center of São Paulo.
Before purchasing a consortium quota or a contemplated letter of credit, it is important to verify that the consortium administrator is registered on the Central Bank website and is able to operate in the country.
Carefully read the Adhesion Agreement, where all the rules governing the contracting business are stipulated, such as the number of installments to be paid, the number of monthly draws, bids, credit amount, payment term, contemplation, etc.
Clarify all your doubts regarding the rights and obligations you will assume before signing the contract.
Check all documents delivered by the administrator along with the contract so that the transaction is legal and formalized. Only sign the transfer of the contract at the head office or branch of the consortium administrator, as this process depends exclusively on your approval.
The consortium contemplated is not marketed by a consortium manager, it is necessary to purchase it directly from the seller.
Therefore, it is essential that consumers take care not to fall for scams. It is essential to check with the consortium administrator if the quota being sold really exists and if its payments are up to date, and in the case of quotas that have already been contemplated if they really are in this condition.
Do not make any payments until you are sure of this so that the purchase and transfer of the share can be done safely.
Negotiation of the real estate consortium.
With the letter of credit in hand, the new consortium member must offer the guarantees required by the administrator, providing proof that it will continue to pay the installments. The consortium member must choose the asset according to the value of the share it purchased, and inform the administrator of the seller’s data and the asset it wishes to acquire.
After this information, the consortium administrator will evaluate the negotiation and after that, will approve the release of credit for the purchase. Therefore, it is necessary to present some personal and property documents, as well as a formal appraisal of the property, the letter of credit and the consortium contract.
With all this documentation prepared and the payment of some fees charged by the registry (depending on the value of the property), the registration is carried out.
The property acquired in the consortium or through a covering letter of credit is mortgaged or fiduciary sold to the administrator.
In the case of mortgages, the property is already in the name of the buyer, who will not be able to sell it until the debt is paid off. In the fiduciary sale, the property is in the name of the administrator, who will transfer the property to the buyer when the debt is paid in full.
If the consortium member has another property in his name, he may offer the guaranteed exchange as long as the administrator authorizes it. At the end of the consortium, even those who failed to be included in the draws or bids will receive the item.
Economy and planning have been increasingly present in people’s daily routine and the flexibility of the consortium system becomes a great ally in the purchase of the property.
The purchase of a consortium or letter of credit that was contemplated became part of the budget of many Brazilian families and is on the list of scheduled purchases and investments. No interest, no down payment, no intermediate installments, lower fees and less bureaucracy when buying a property.
There are dozens of credit and tuition options to fit any pocket size. The installments are readjusted by the INCC, which makes the value of the letter of credit maintain its purchasing power throughout the plan.