As with most things, buying off the plan has both positives and negatives. You may see press about developers not doing a good job and developers going bust. Rarely does the media report any positive outcomes.
Buying off the plan
This means that you sign a contract to buy a property that is not built or it may be in the process of building. There is no physical property to inspect, and there may only be drawings and diagrams of the proposed building. You may have a display suit to walk through or a display house.
What are the positives?
The first positive is that you get to agree on a purchase price and only offer a small deposit. Second, you potentially pay less today as, by the time it is built, it is worth more than it was at the time of your contract agreement. Make sure you do your research though it is vital that you understand the market where it currently is and may be in the future.
A new property that you are the first owner and resident in has to be a huge positive. Potentially it will be more energy efficient, leading to lower energy bills in the future.
What are the risks?
One of the most obvious is that property prices may reduce and you end up contracted to pay more than it is currently worth. If you hope to sell immediately upon completion, this is an issue, as you may lose money.
The developer may go bankrupt, or the sunset clause may expire before completing the project. Sunset clause = Designed to protect buyers, it also allows the developer to delay the project, return the deposits and list the property for sale at a high price.
Get legal advice
Make sure that your contract is reviewed and you do all your research before getting tied into a purchase. Take the time to carefully consider all the positives and negatives of buying off the plan and ensure that it will be the best choice for you.
Speak to the team at Select Conveyancing for all your conveyancing needs.