Buying property is always exciting and is often wonderfully life-changing.
Off-the-plan apartments have become an increasingly popular way to enter the market, or move up the property ladder.
It’s important to understand how purchasing off the plan differs from buying an existing property at auction for through private treaty.
Off-the-plan buying gives you the opportunity to maximise your investment potential, especially in a strong market. For a 10% deposit, you can reserve an apartment and then enjoy the benefits of rising values while construction is completed.
You’ll need to use your imagination though, as this will not be like buying a physical property.
Firstly, you’ll need to picture your new home or investment using a floor plan and an artist’s impression of the building as your guide.
That’s not the only difference, and as you’re local real estate agent we’ll be happy to discuss all aspects of an off-the-plan purchase with you so that you can make your decision with confidence.
Here, we outline a nine unique aspects of buying off-the-plan. We look forward to providing you with more detailed advice:
- If you fall in love with an off-the-plan development but are not ready to jump straight in, you can often reserve it with a refundable $1,000. That will take the property off the market for 14 days while you decide what to do.
- Ask the developer to help you select your desired colour scheme and fittings and fixtures at this point. The choices can be limited, so check what is available.
- Paying a deposit comes next. In most cases, you will need to put down 10% of the property’s value. Be aware, your bank or lender will not issue a mortgage for you until construction is completed and they can undertake their own independent valuation.
- Not every developer will allow you to reserve an apartment. Some instead will seek from you an expression of interest. This can be made with a small, refundable payment (approx. $500). In this arrangement, there is no obligation for you to buy, or for the developer to sell to you.
- The developer will send their contract to your nominated legal representative. You’ll have 14 days to negotiate, clarify any items and pay the 10% deposit.
- It’s great if you’re an early buyer as you’ll likely have the pick of the building in your price bracket. Those with the best views go first.
- With your deposit paid and contracts exchanged, the developer will provide regular updates on construction.
- You’ll be invited to a pre-settlement inspection during which you must inspect the work and point out any issues. Contracts usually permit some leeway for developers in terms of changing the floor plan and even reducing the square footage.
- You have three months to complain formally if you’re not happy with the finished product. Your developer will have homeowners’ warranty insurance to compensate you if work is incomplete or defective; (This will also come into play if the developer goes broke, dies, has their building licence suspended etc.).
Buying off the plan can give you a great opportunity to maximise your investment as well as enjoy a brand new home. Come and talk to us about your options so you can make a decision with confidence.