There are a number of advantages of buying off the plan but often buyers can be understandably a bit hesitant to purchase property without seeing the final product. So, here are some tips and ideas on how you can take advantage of off the plan buying whilst minimising the risk of you not being happy with the final product.
Developers are often keen to get the first few properties sold in a project so they can get the project underway. Often banks won’t finalise finance for a development until they have a certain amount properties sold. This means if you get in early you may be able to secure a property at a slightly discounted rate. Getting in early also means that you can choose your ideal location and layout.
The other thing that is a huge advantage with buying off the plan is that you don’t pay as much stamp duty. You will simply pay the stamp duty on the land component and the value of the construction at the time of purchasing. So, the sooner you get in the less stamp duty you pay, this can literally save you tens of thousands of dollars.
You do need to do your research on the developer. I’d recommend asking for some addresses of other projects they’ve completed and some referees you can talk to. You want to know that the finish on the property is what you expect for the price and if there were any issues when someone moved in, how well were they handled.
Buying off the plan requires you to sign an off the plan contract which is prepared by the vendors/developers solicitor. These contracts are quite different to the standard sale contracts. Make sure you use a good solicitor and get it checked thoroughly before signing. Be very clear what the inclusions are.
The completion date is something that often varies greatly from what the developer expects at the start of the project, to when it actually is complete. Find out what the “sunset clause” is and what your rights are should the project take a lot longer than expected to complete. The sunset clause is a date at which the purchaser can pull out of the contract if it is not complete.
One thing that you do need to be careful of is that rooms are of a reasonable size. I would make sure you closely review the plans with measurements and measure the rooms against where you live now to get a feel for the size.
For any real estate advice or assistance please feel free to call me, Tamara Lloyd on 0408 585 319.
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