Buying off the plan can be a great option for potential homeowners due to its affordability and flexibility. If you’re thinking of buying off the plan instead of buying an already-existing property, there can be many benefits.
Depending on the state or territory you live in, you can save a lot on stamp duties as you may be eligible for concessions or exemptions.
Buying off the plan means that even though the price you pay for the property is locked in, there is potential for the market to grow and the value of your property to increase before you even move in.
However the property market can often be unpredictable, and there’s always a chance that the value of the property will have fallen by the time it’s built.
In general, you will initially only have to pay a deposit of about 10%, which gives you time to save while the property is being built.
Source: Miller Atkins
When you buy off the plan, a loan from the bank isn’t guaranteed. They won’t loan you the money until the property is built and they have performed a valuation and re-evaluated your finances. If you’re not approved for a loan, there’s a chance that the developer will seize your deposit and, if the property sells less for what you were going to pay, could sue you.
Depending on the state or territory you live in, you will generally be covered by builders’ warranty, which means that should any structural or interior problems emerge within a certain timeframe they must be repaired by the builder.
Ultimately, you won’t know what the final product is going to be like until it’s completely constructed, and you’ve already paid the money.
The earlier you get in on the development, the better. You will often get a better price as the developer needs to make a certain amount of sales early on in order to meet the financial requirements. You will also be able to customise your property a lot more, and you can potentially even choose things like location, floor plans, and finishes.
The most important thing when you’re thinking about buying off the plan is that you do your research and ensure that you get a solicitor to go through the contract with you very carefully. That way, a lot of the issues associated with buying off the plan can be avoided.