8 Step Guide to Buying Off the Plan

Buying a house or apartment off the plan can be an exciting venture, offering the promise of a brand-new living space tailored to your preferences. However, it’s important to navigate this process carefully. Here’s a comprehensive eight-step guide to help you make informed decisions.

Step 1: Finance

One of the initial steps in this journey is securing your finances. Most banks today will expect investors to have a minimum of 20 percent deposit. It’s crucial to assess your financial standing and ensure you have the necessary funds in place before proceeding.

Step 2: Government Grants

For first-time homebuyers, there’s the potential benefit of government grants. These grants vary from state to state, typically ranging between $10,000 and $20,000, with specific caps on purchase prices. It’s advisable to stay updated on any changes, especially around budgetary cycles, as these grants aim to stimulate the building industry.

Step 3: What to Buy

Your choice of property should align with your goals. Owner-occupiers often prioritize long-term amenity and quality inclusions, with a preference for two or three-bedroom properties. For investors, yield is paramount, while first-time buyers may focus on affordability.

Step 4: Where to Buy

Location is key in real estate. Consider factors like accessibility, amenities, and potential for growth when selecting the area for your off-the-plan purchase. Research the neighborhood thoroughly to ensure it aligns with your lifestyle and investment objectives.

Step 5: When to Buy

The timing of your purchase can significantly impact your experience. If securing finance is a concern, opting for a development nearing completion can be advantageous. Banks tend to be more lenient with valuations in such cases. Alternatively, investors may opt for early investment to allow ample time for deposit accumulation, particularly in long-term projects.

Step 6: Selections

When purchasing off the plan, flexibility in customization may be limited. Most projects offer a fixed selection of floorplans and finishes. If personalization is a priority, it’s essential to inquire about any potential modifications or amalgamations of multiple properties.

Step 7: Contracts

Legal guidance is crucial in this step. Always seek independent legal advice on the sale contract. A pivotal component to include is a sunset clause, which sets a deadline for project completion. This clause provides you with an exit strategy and safeguards your deposit in case of project delays. However, it’s important to note that this clause also grants the developer the same option, emphasizing the need for professional legal counsel experienced in off-the-plan contracts.

Step 8: Purchase

As you approach the final stage, be prepared for financial commitments. A reservation fee, typically between $2000 and $5000, is commonly required when selecting your house or apartment. This fee is refundable until the exchange of contracts, at which point a 10 percent non-refundable deposit will be due. The remaining balance of the purchase price is settled upon project completion.

In conclusion, buying an house or apartment off the plan can be a rewarding endeavor when approached with diligence and careful consideration of each step. By following this eight-step guide, you’ll be well-equipped to navigate the process and make informed decisions.


FAQs

Can I customize the apartment I’m buying off the plan?

While there may be some limitations on customization, it’s important to inquire with the developer about any potential modifications.

What is a sunset clause in a sale contract?

A sunset clause sets a deadline for project completion, providing an exit strategy and safeguarding your deposit in case of delays.

What is the typical reservation fee for an off-the-plan purchase?

The reservation fee commonly ranges between $2000 and $5000, but this may vary depending on the development.

When is the non-refundable deposit due in the buying process?

The 10 percent non-refundable deposit is typically due at the exchange of contracts, after which it becomes binding.