New Projects
Tips for Buying Off The Plan
March 20 2023
Buying an apartment that is yet to be built can present an exciting and lucrative opportunity. Follow these tips to determine if it is the right option for you.
Buying a brand-new home off the plan is becoming increasingly popular, particularly at a time when stock is low and opportunities restricted.
This method of sale can be extremely lucrative for those buying into the right project in the right location, with equity gains to be had before the property is even completed.
Yet buying something that is yet to be built is not without risks. Here are some of the questions that should be asked before buyers sign on the dotted line.
Who is the Developer?
It is essential that a buyer knows and trusts the developer in charge of creating their new home.
Smaller, newer developers often need to take out loans with high interest rates to complete a build. If their margins aren’t profitable, they may have to pull out of the project, leaving buyers disappointed.
When is the Settlement Date?
There will be several years lag between when a deposit is paid and an owner moves into their new home.
Once construction is underway, the builder should be able to provide a clear timeframe of a settlement date, although external factors may delay the build and completion.
Buyers should be kept well-informed on the schedule, and whether they are entitled to any compensation should the developer be unable to meet the handover date.
Enquire about the ‘sunset clause’, which puts a time limit on a contract’s validity. Buyers, builders or developers can use it to cancel a contract under sunset clause conditions.
The development journey can be long, but there are benefits to this. Fortunate buyers may acquire equity by the time the property settles, particularly if the home was purchased during favorable market conditions and in a high-growth area.
What About Customisation?
Some developers allow buyers to customise their homes, including floor plans, fixtures and fittings. For buyers wanting to do this, it is important to have a clear understanding of what is already being offered.
Top Tip: When buying off the plan, always seek the legal advice of a solicitor with knowledge of the local property laws, to safeguard against any unexpected complications.
Attend a display suite prior to purchase if possible, and request a comprehensive list of fixtures and fittings, plus the full dimensions of all internal and external spaces.
This ensures that a buyer’s quality and lifestyle expectations are met, and will help to highlight what may be worth customising, if possible.
Ask what, if any, customisations the builder will agree to, and what extra cost those changes will incur.
Is this Development Right for Me?
It is important to know whether a development will be residential-only to ensure it aligns with a buyers’ property goals. Those seeking a quiet development, without renters coming and going, would be suited to a residential-only building, while investors should seek one that allows lettings.
Buyers should also enquire about included amenities, plus conduct their own research on the local area’s conveniences.
