What exactly is an off-the-plan property purchase? This means signing up to buy a property that has yet to be built, a development that is still in the planning stage and while there might be a show home, your plot is undeveloped at the time of purchase. Some might say there is an element of risk when buying a property that has not yet been constructed, but if you are dealing with a reputable developer, there is every reason to expect the project to be finished according to the timeline.
The benefits of buying an off-the-plan property
There are a few pluses to buying off-the-plan, which include,
- You have time to save money.
- Take advantage of price discounts; often the developer offers a discount to early buyers, which helps them with cashflow and capital.
- First time buyers are eligible for government concessions.
- Capital growth – The property value will likely increase during the construction time, giving you some equity when you finally move in.
- Stamp duty concessions – If the property is your main residence, you don’t have to stamp duty until 15 months after completion. Talk to a real estate lawyer for more details.
As you can see, the benefits are considerable when buying off the plan in NSW and with the help of a reputable law firm, you can sign the contract and start preparing for the day when you are handed the keys.
Risks of buying off-the-plan
While there are risks buying any real estate, off-the-plan has additional aspects to consider.
- Market volatility – It is possible the real estate market takes a dive while construction is underway.
- Developer bankruptcy – Of course, you should do your homework on the builder to check that they are established with several successful projects under their belt.
- Project delays – Despite the best will in the world, delays can and do happen. This can add to your costs as you may have to rent a home until completion.
- Workmanship – Off-the-plan means you have not seen the standard of the work; you should ask to see a previous project before making a decision.
There is much to consider when looking at off-the-plan properties; do your homework on the developer and make sure you seek the advice of a real estate lawyer. Click here to learn about ICICI banking.
Strong negotiating position
When you are looking at signing up for a property yet to be built, this is a time when the developer is anxious to get a few sales on their books and that can work in your favour. There is nothing to lose by trying and very often, the builder will drop a little more than he should, as he is very keen to get a few contracts signed.
To summarise, buying an off-the-plan property has its ups and downs and we strongly recommend engaging the services of an established real estate law firm.
