What does it mean to buy off-the-plan?
Buying off the plan means buying a home from a developer before or halfway through its construction. This can be exciting in terms of the freedom to choose how you want your dream home to be designed, but is this the best way to purchase real estate? Our conveyancing team at Complete Conveyancing Solutions are here to help you through the Contract process.
Is this profitable in the longer scheme of things? The loophole to buying has a lot of benefits, but it’s up to the individual as to whether the risks are worth it.
What are some benefits of off-the-plan transactions?
With this process, you view the building plans beforehand, and there are a lot of reduced costs associated with this! This includes:
- An overall lower property value compared to established homes.
- Deposits paid are generally 10%, but can be negotiated, and the remaining costs don’t need to be paid until the property is built.
- Having more time to save money, such as the costs of home repairs.
- Concessions or exemptions on stamp duty.
- You’re protected by a warranty by the building company.
- Potential for growth in the capital after the home or unit has been built.
What do you need to consider before buying off-the-plan land?
In summary, our professional conveyancers can assist you with:
- Research the building company, including developers, architects, builders and who you’ve chosen to finance it.
- Reviewing the contract. This could prevent your developer from changing part of the build to cut back the costs.
- Ensure you can reclaim your deposit if things don’t go as planned.
- Be aware of building delays. Pay attention to how long it will take for a developer to finish a project.
- A bank approves the plan contract. They won’t loan you money until the property is built.
- The price of the home can go up or down over time. Reselling the home can be impacted by financial changes, interest rates or market crashes, especially during the time of construction. It’s also wise to think about the location that you’re choosing to build on.
Should you invest in an off-the-plan conveyancer in Victoria?
Yes. Melbourne has a range of homebuilding companies, and you want to know you’re putting time and money into the right one. Off-the-plan contracts can have hidden costs or conditions, which might affect you financially in the future.
Consider unexpected faults in the build, if the home can be resold eventually, and what happens if a build is completed before its expected due date. All of these outcomes are vital to the success of an off-plan buy.
The temptation can be there for first home buyers who want a place to settle down, but always make sure you know what you’re getting into before committing. Always consult a professional conveyancer for advice.
Looking for an off-the-plan conveyancer in Melbourne? Complete Conveyancing Solutions has the solution.
Maria Tomlinson holds an unrestricted conveyancing licence together with Professional Indemnity Insurance against civil liability. Maria Tomlinson commenced her career in Conveyancing in 2001. She furthered her studying by completing her Diploma in Conveyancing in 2017 which has led her to hold an unrestricted Conveyancing License and successfully open her conveyancing firm, Complete Conveyancing Solutions.