If you're considering buying a house, one important decision you'll face is whether to purchase an existing property or buy off the plan. While the appeal of a brand new, never-lived-in home is undeniable, there are several factors to consider before making a final decision.
One significant advantage of buying off the plan is the opportunity to have input into the design of your new home. This means you can have a modern and technologically advanced home without the need for costly renovations. Additionally, you can suggest customisations that cater to your specific needs and preferences.
There are certain benefits associated with buying a new home. Incentives, such as the First Home Grant and HomeStart Grant, offer more financial backing for first home buyers who purchase a new build.
Another advantage of buying off the plan is the potential to purchase at the current market price, even though the property will be completed later when prices may have likely increased.
However, it's essential to be aware of the downsides of buying off the plan.
Unfortunately, predicting future market conditions is impossible, and there is a risk that house prices may fall between the signing of the contract and the completion of construction.
Additionally, interest rates may rise during this period, affecting your financial situation.
Furthermore, when buying off the plan, you are reliant on the builder or developer. It's crucial to thoroughly research their reputation, financial stability, and track record. Visit their website, read online reviews, and investigate their previous projects to ensure they are reliable and trustworthy.
Before committing to an off-the-plan purchase, it's advisable to physically inspect the building site and review the building plans. Familiarise yourself with the local market conditions in that particular area and discuss your expectations with the builder or developer.
To make an informed decision when buying off the plan, consider the following tips:
Research the Developer
Conduct thorough research on the developer's portfolio, previous projects, and reputation. Look for positive reviews and testimonials from past buyers.
Understand the Contract
There are typically two types of contracts when buying off the plan. Familiarise yourself with the specific terms and conditions, seek legal advice, and ensure you understand the deposit requirements and any potential changes in property value.
Inspect Similar Projects
Request evidence of the developer's past projects and inspect similar-style houses to assess the layout and build quality. Reach out to previous buyers for their feedback and search for any negative reviews or media reports.
Ask about Customisation Options
Inquire about the flexibility for customisation in the design and layout of your new home. Understand the options provided by the developer and builder upfront.
Secure Financing Early
Arrange home loan preapproval in advance or apply for a loan as construction nears completion. Work closely with a mortgage broker to navigate the unique aspects of financing an off-the-plan property.
Be Prepared for Delays
Unexpected construction delays can occur, impacting your move-in or rental plans. Review the contract for any sunset clauses and have a contingency plan in place, including a financial cushion for unexpected costs.
Consider the Future Market
Assess the current and predicted property market conditions, as well as any factors that may influence the value of your home. Conduct thorough research on the location and its future potential.
Review the Floor Plan and Specifications
Scrutinise the contract, paying close attention to the floor plan, room sizes, garage, grounds, and available colour and finish options.
Stay Informed during Construction
Maintain regular communication with the developer or their representative to stay updated on any changes or developments. Seek legal advice from a property lawyer or conveyancer experienced in off-the-plan builds.
Remember, buying off the plan can be a complex and lengthy process. By considering these factors and seeking professional guidance, you can make an informed decision that aligns with your needs and preferences.
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