EDITION 14
From The Experts:
Off The Plan
Buying a new home before construction has been completed has many advantages and can be an affordable way for first time buyers to enter the market. As with any new purchase, there are a number of things to consider before entering into a contract to buy a home off the plan – the team at Evans and Wislang break it down for us.
Benefits of buying off the plan
Buying off the plan offers several potential advantages, which can make it an appealing option for many buyers. Here’s a rundown of some of the key benefits:
1. Potential for Lower Purchase Price
Lower Price: Properties bought off the plan are often priced lower than similar completed properties, providing an opportunity to enter the market at a more affordable rate.
Buyer Incentives: Developers may offer incentives to attract buyers before construction begins.
2. Future Capital Growth
Appreciation Potential: If the property market rises, the value of the property may increase by the time construction is completed, allowing you to benefit from capital growth.
Investment Edge: Purchasing early can position you well in a growing neighborhood, potentially leading to a higher return on investment.
3. Customisation Opportunities
Personalisation: Depending on the stage of development, you might be able to choose certain finishes, fixtures, or even make minor modifications to the layout.
Modern Features: New builds often come with the latest design trends and technologies, which can enhance comfort and efficiency.
4. Extended Settlement Period
Time to Save: Since the property isn’t completed yet, you have more time to save for a larger deposit and prepare financially for settlement.
Planning Ahead: This extended timeline can be useful for planning your move and coordinating any necessary preparations.
5. New and Modern Construction
Up-to-Date Standards: New properties are built to current building codes and standards, which often means better energy efficiency, safety features, and modern amenities.
Less Immediate Maintenance: Newly constructed homes generally require less maintenance and repairs compared to older properties.
6. Warranty Protections
New Build Warranties: Some new properties come with warranties that cover defects in construction and major systems, giving you peace of mind regarding the quality of the build.
7. Choice of Location
Preferred Areas: Buying off the plan often allows you to select from the best locations within the development, such as desirable floor levels or views.
8. Potential for Stronger Negotiation
Market Leverage: As an early buyer, you might have more negotiating power with the developer, especially if they are keen to sell a certain number of units quickly.
9. Avoiding Bidding Wars
Fixed Pricing: When you buy off the plan, you avoid the competitive bidding process common with established properties, which can help in securing a purchase at a fixed price.
Buying off the plan: common questions and concerns
Buying off the plan can be a great way to secure a property before it’s built, but it also comes with its own set of considerations. Here’s a quick Q&A to cover some common questions and concerns:
Q: What does “buying off the plan” mean?
A: Buying off the plan means purchasing a property based on its architectural plans and design before it has been built. You’re essentially agreeing to buy a property that’s still in the planning or construction phase.
Q: What are some of the risks involved?
A: Delayed Completion: Construction delays can push back your moving-in date. Changes in Market Conditions: Property values or market conditions might change between the time of purchase and completion.
Q: What should I look for in a contract?
A: Sunset dates: Check for a clear timeline and what happens if it’s delayed or extended.
Specifications: Ensure the contract details the finishes, fixtures, and inclusions.
Deposit Requirements: Understand how much you need to pay upfront and the terms for refunds.
Warranties and Guarantees: Look for details on warranties for construction and appliances.
Builder’s Reputation: Research the builder’s history and reputation for completing projects on time and to standard.
Q: What is a sunset clause, and should I be concerned about it?
A: A sunset clause is a provision in the contract that allows the buyer or seller to cancel the contract if the property isn’t completed by a certain date. This can protect you from long delays but might also give the developer the ability to terminate the contract if they face significant issues.
If you’re considering making a purchase like this, it’s highly recommended to consult with a conveyancer or a lawyer who specialises in buying off the plan. They can help you understand the contract terms and protect your interests. Our experienced team at Evans & Wislang can assist you with any questions you may have when considering buying off the plan.
Phone (02) 4952 5344
Website evansandwislang.com.au
Website Suite 6, Level 2, 10 Bradford Close, Kotara NSW 2289