The Wise Guide To Buying Off The Plan

Market Insights
8 years ago
2 minutes

Buying off the plan wisely

Buying a property that is yet to be built (known as buying ‘off the plan’) may seem risky to some.

After all, how can you be sure that the property will look good, suit your lifestyle requirements and make for the perfect home for you or any potential future owner?

If you do your homework, you can lessen the risks associated with buying off the plan.

So, why would anyone buy a property that has not yet been built? Often, buying off the plan can be a good way to secure your ideal property at a lower cost.

If you’re in no immediate rush to move houses or you have other plans for the property, buying off the plan could be a great option for you.

When you do choose to buy off the plan, you can lock in the price based on the current market value – this is one of the most appealing things about buying this way.

Normally, you would only be required to pay a deposit in order to secure the property with the total amount to be paid once the property is built.

Once the property is built, you might find that you’ll benefit from a builders guarantee which means that any structural or interior building faults are covered.

Things to keep in mind:

Buying off the plan means that you’ll sign a contract before inspecting the finished property. Make sure that you understand the contract – ask yourself this question: can I confidently state that I know what I’m agreeing to?

Be aware of what withdrawing from the contract before its completion could mean for you and what will happen to your deposit if the builder cancels the contract or experiences financial difficulty. If you need to, seek expert and / or legal advice.

In terms of your finance, you need to prepare for the unknown: should the construction run either under or over time, will you be able to adapt accordingly? 

It’s always in your best interest to do your homework - go with the developer who has a solid track record. Speaking of homework, know your numbers in terms of finance, return, gearing, growth and so on.

When it comes to buying off the plan, the benefits can be substantial – just make sure you know what you’re agreeing to when signing on that dotted line.

Find more information on Apartments and Buying off the Plan here.