These are our top tips to help avoid cost blowouts when you’re looking to buy house and land off the plan. Unfortunately, many new first home buyers are still faced with very confusing and daunting experiences, where things are not so black and white.
The most important thing to do when buying a new house and land package off the plan is to work out what you get and at what price.
Why buy off the plan?
Buying “off the plan” has become quite popular, the concept has advantages for the buyer. From a buyer’s point of view, property which may not be completed for some time can be purchased at today’s prices. This can be a real benefit in times of rising prices.
Once you have made the decision to buy and have checked with your bank or mortgage broker to make sure you can afford the property, you simply reserve your desired property with an Expression of Interest Form (EOI) with a holding deposit which can range from $500 to $5,000, though $1,000 is most common. Most of the time this is fully refundable if you decide not to proceed.
Key benefits of buying off the plan
- The best price
Timing is so critical when you buy off the plan – a first release usually represents the best price and generally this is when the project is at its cheapest, because the developers require early or pre-sales for finance. Once they meet their financial requirements and sales momentum gathers, they can lift prices on upcoming stages as the project gathers momentum.
- Time to save
A longer settlement period means you have some breathing room – i.e. organise to move house and most importantly save money and reduce the amount of finance you will need to borrow
New properties have better incentives at the moment in QLD vs existing properties – i.e. stamp duty concessions and if you’re a First Home Owner the $20,000 grant.
- Get what you want with all the warranties
Getting in early allows you to choose from a range of properties within the development. You can grab the one with the best view, or that’s furthest from a busy street or the design that meets your needs. You don’t usually have multiple options within the one specific location when buying an established property. In addition new properties generally come with structural and finish warranties should anything break over the short to mid-term.