Doing research is a must when buying off-the-plan. Here are 5 things to consider when you buy off the plan.
- Check the contract: It is imperative that you engage the services of a good conveyancer/ solicitor to review the contract prior to signing. There are a number of areas to review including the cooling off period, the inclusions and warranties. Look for any ‘sunset clause in the contract. A sunset clause varies from development to development but refers to the maximum time in which the developer has to finish the project. In the event that your home is not completed by this time, you can walk away from the contract and have your deposit returned.
- Builder: Go with a reputable developer. Do your research on your builder by performing a background check. Check they are licensed, check information about their recent developments and check online forums to see if there is any positive or negative experiences.
- Insurance: If the property is NOT part of a multi-unit/ multi storey development, check the property has home warranty insurance as this is the developer’s legal responsibility. Home warranty insurance will cover loss or damage If the work is not completed, breach of statutory warranty and loss of deposit.
- Finance: Lenders will have different policies around financing for off- the plan properties and it can be tricky to have finance approved. If you are borrowing more that 80% of the property value, there may be restrictions with property location and type from those providing lenders mortgage insurance. Many lenders will also not lend for properties that have a floor space that is less than 50 square meters. Before you put in an offer, it is worth contacting US to ensure that we can find a lender that will suit YOUR requirements.
- Property Location: Ensuring that you have done your research of the area as this will help to maximise your potential for capital growth. Research other properties in the area to ensure that you are not paying too much. Ensure that it is in an area that has growth potential by looking at access to public transport and other infrastructure.