Are you thinking about buying a property off plans? To secure a new home to live in or for investment and for a better price is one of the attractions of off the plans property. Plus it’s a legitimate way to obtain a new home that’s well insulated with up to date materials for better wear and tear and saving on power usage. However, many purchasers are not well informed of the process, expectations and legal requirements; therefore, all purchasers need to exercise caution before deciding they’re ready to commit.
Established Versus Off Plans Property
When you buy off plans, there’s no home for you to inspect. House hunting usually involves going to open homes of properties listed for sale. The experience of using your senses to gauge your interest in a property usually all you have to work with.
Listing agents are aware of the psychology of home purchasing, and they recommend staging the property for sale. Decluttering the home, hiring furniture and adding touches like fresh flowers, and welcoming smells like baked bread or freshly roasted coffee provide the right memories which are all you’re left with once you depart from the home viewing. Compare this experience with that offered by off plans displays. There is no actual property.
You can look at the plans or blueprints, but you can’t see the final results yet. The developer or listing agent engaged to sell the property will have a slick presentation, and you’re likely to be invited to an ‘invitation only’ event that hosted in a welcoming environment with drinks and nibbles. The presentation will be professional and include a motivational talk, and before you know it your emotions are running high, and you’re asking where to sign!
Sale & Purchase Agreements
Not all sale and purchase agreements are equal. Established homes usually use a standard agreement; however off plans are customised to the specific development and vendors requirements. Remember the development is a plan not yet a property, and a lot can happen before it starts, during and on completion so there is never a situation when you can make a quick decision with increasing your level of risk.
Engage a lawyer ‘before’ you sign anything to protect you and your assets. Remember purchasing a house is a big-ticket item and it is likely to be your most valuable asset, so it just makes sense to use a lawyer to help you to understand the terms and any contracts that you’re required to sign.
A lawyer will also present questions (requisitions) to the vendor’s lawyer as part of the due diligence. This action can commence before you sign and continue within the due diligence clause or cooling down process of the contract.
When considering an off plans purchase, it’s a good idea to seek professional advice from more than just your lawyer so making an ‘on the spot’ decision is not a consideration. Consider the financial commitment and contractual requirements.
Loss Of Deposit
One thing to keep in mind is that the deposit you pay is often non-refundable when buying off plans property. If you don’t eventually settle and purchase the property, you lose the deposit. This could be a significant amount of money, so it’s vital to be careful.
Be sure that if you seek advice from anyone, you choose them carefully. Lousy advice could cost you a lot of time and money, so it pays to be cautious and thorough in your research. Ideally, get a referral from someone you trust and always get references from recent clients. This recommendation applies to all the professional experts you need, including, an architect or designer, financial advisor, accountant, lawyer.
If you’re wondering why you’d need a designer or architect, for off plans property you need to understand the property plans. They are not always accurate and can be deceptive so the designer will help you to take a closer look at the plans in the absence of being able to walk through an existing property.
It’s essential to be as thorough as possible when examining the plans and agreements for off plans property before deciding if it’s right for you.