Here’s part two of our buying off the plan top tips to help avoid cost blowouts when you’re looking to buy house and land off the plan.
What you need to look out for
- Research your developer
Firstly, it’s important to make sure you’re buying from a reputable developer. It’s well worth taking the time to make sure they have a history of developing and delivering projects similar to what you’re looking for. Check that the development is development application (DA) approved.
It might sound like that’s an obvious thing to check, but a lot of developers over the last five years have been selling without DA approval, trying to take advantage of the market. They’re actually able to put a clause in the contract that allows it.
- Research the market – make sure you’re not over paying
We live in an age where we all have access to a plethora of information at our finger tips – get as much information on the area that you’re looking to purchase. I will always do the following when buying off the plan:
1. see what is current selling
2. how much stock is on the market for sale
3. price points for comparable properties (compare apples with apples)
4. who lives there and why
5. what supporting investment is occurring (job creation or transport etc)
- Understand your contract and don’t skimp on a solicitor (conveyancer)
Don’t be afraid to ask questions. Make sure you understand exactly what you’re getting. You need to be aware of the finishes and the fixtures. This kind of buying means it’s impossible to identify exactly what you’re getting, so it’s better to have an understanding of it and ask more questions.
It’s also imperative a buyer understands the contract and what they’re actually signing. What they need to understand is an off the plan contract is very different and you should ideally be using a solicitor who is very well versed in off the plan contracts, or it might even be their specialty.
- Know where your deposit is going
Make sure your deposit is held in a trust account.
- How long will it take and when is settlement
Understand the process – make sure that you can allow for delays in construction and ask when settlement is expected. Always request project updates.