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How to buy off-the-plan

By Courtenay Morrison

Looking to make your next property move? For investors and owner-occupiers alike, buying off-the-plan proves a popular option with plenty of lucrative benefits.

As with any major purchase, it is crucial to plan ahead and do ample research before committing to buy a home off-the-plan. Not all properties will increase in value over time, and the reality of the finished home may fail to meet your expectations.

Careful consideration of the property’s location, developer and contract of sale are necessary to protect yourself against unforeseen challenges. Learn the checks you need to make prior to sale and what steps are essential to ensure you select the best property to suit your individual needs.

WHAT DOES BUYING OFF-THE-PLAN INVOLVE?

Essentially, buying off-the-plan means committing to purchasing a property that has not yet been built. It’s an attractive option for first-home buyers, allowing prospective owners to customise a home to best suit their tastes and preferences.

The process involves signing a legally binding agreement to purchase a home prior to completion. Aided by government incentives, stamp duty concessions and the assurance of owning a home prior to settlement, buying off-the-plan is an affordable and flexible option for many buyers.

GET IN EARLY

The best way to own your dream home? Get in at the early stages of a development! Being one of the first buyers to make a deposit means you’ll have the broadest range of homes to choose from.

Plus, you’ll be in the perfect position to negotiate a good deal. Typically, developers are eager to close sales early, with the first properties released offered at a discounted rate. Avoid waiting until their financial requirements are met, as these remaining properties will be where developers recoup lost profits.

This means that keeping up-to-date with area statistics, speaking to property professionals who know the area and being on top of where developments are planned to be built, is a must.

DO YOUR RESEARCH

Make an informed decision by researching the prospective development plan thoroughly. Buying off-the-plan comes with a range of complexities that buyers must consider prior to sale.

The most important factors to assess include finance, market conditions and buying costs. Be sure to check your current financial situation and set a realistic budget that allows you to comfortably service the home loan required.

Research the developer responsible for the project and ensure they have a reputable track record. Check their qualifications, license, DA approval and any information relating to past and present projects to ensure they are a trustworthy investment.

LOCATION, LOCATION, LOCATION!

When buying off-the-plan you should consider the suburb as carefully as the proposed property. It is wise to contact your local council to check zoning and future development plans that may decrease the value of the home over time.

It is important to look at market conditions in the area, such as vacancy rates, rental yields and local demographics. Take the time to select a property will healthy prospects for capital growth and strong returns.

Remember, you should see your off-the-plan purchase as an investment. Make your money work for you and purchase in a desirable suburb that will appeal to the broadest sector of the market and last the test of time.

SEEK PROFESSIONAL ADVICE

Buying a home off-the-plan is a complex process for many buyers. Get in touch with a contract or property lawyer before closing any sale to ensure you know your rights and entitlements.

Reviewing these contracts will ensure you are aware of exactly what you are buying. A legal professional will explain key information including time frames for completion, strata voting rights and dispute resolution processes.

Plus, this will prevent you from being caught out in the event of unexpected costs, delays in construction or defects in the property upon completion. Choosing to buy off-the-plan is an exciting and rewarding endeavour, but also requires careful consideration of the complexities involved in this purchasing process.

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