Buying a property off the plan can be daunting but for some it is seen as an opportunity. In this blog article, we have expanded on some of the main concerns when it comes to buying off the plan to help you determine if this is the right choice for you.
As with any property purchase it is imperative to diligently research, not only the area but also the builder and development company to get an idea of their insurance status, their past projects and any financial blemishes against their name.
There are a few financial incentives to take advantage of. Governments across Australia offer stamp duty concessions and developers may be willing to offer additional bonuses for first release properties to attract buyers. This can help them reach their sales quota and meet requirements set by their financiers. If you are early enough you can also capitalise on some other aspects, like being able to select a property with the best view, the most private courtyard or a more desirable internal layout. You may also be able to negotiate some of the pre-selected finishes and minor internal layout decisions if the developer is open to that.
Be sure to obtain legal advice, as you would when signing any contract. To reassure yourself that the off the plan property contract does not disadvantage the purchaser, it is wise to have the contract revised by a legal professional experienced in property law. Ensure you are comfortable with the terms of the contract and that you understand the obligations of both parties.
During the contract revision process, your legal representative will be able to tell you if there are any penalties or costs associated with contract cancellation or request any changes to the finishes or internal layout of the property. At this stage they will also advise whether you are able to inspect the property prior to settlement and to what extent and timeframe rectifications will be addressed by the builder. The delay of construction is an important point as this can affect your living situation and financial obligations.
When buying off the plan, you don’t have the opportunity to physically see the property which may cause uncertainty in the finished product. Relying on computer imagery, staged display suites, mood boards showing ‘similar’ finishes and architectural plans, all designed to present an idea and market the property to attract buyers, may result in the property not being quite as it was anticipated.
These risks are easily navigated if you seek the right advice and enter into an agreement understanding the terms and conditions of all parties involved. The one thing that is hard to get around is the time needed for construction and the idea that you will put your trust in the developer to deliver you a property that meets your expectations.
On the other hand, you will be purchasing a new property, possibly at a discounted price that has the potential to increase in value between the time of purchase and the time of settlement. With the current government incentives, such as stamp duty savings, and the opportunity to secure the best featured property at that price point, purchasing off-the-plan is an advantageous strategy. Once all the research is done and the legalities are in order, all you have to do is sit back and wait while construction of your property progresses.
DISCLAIMER – Alleura recommends each individual seek the services of a qualified service provider before undertaking any financial investment. The information provided here is for general information purposes only. It is not intended as financial or investment advice.