Off-the-plan properties are, in most cases, conveyed as risky affairs. An off-the-plan contract means that you agree to purchase a property that is soon to be built. In simpler terms, you agree to buy a house that you have only seen in pictures. Sadly enough, pictures don’t always reflect the rough reality 100 percent.
Still, in spite of the risks associated with buying off-the-plan houses, there are various advantages that make this alternative quite attractive, given the convenient pricing. Keep on reading to get acquainted with top tips concerning buying an off-the-plan property for the first time.
Pay attention to the contract
First and foremost, you should pay increased attention to every detail stated in the contract. For instance, aspects such as inclusions, fixtures, fittings and building materials should be included in the contract. Generally speaking, the greater amount of items that are mentioned in the contract, the less you will have to purchase. There are off-the-plan offers that are highly convenient as they provide everything required for the best living environment.
Another clause you should pay attention to is the penalty interest, in the case of late settlement of the property. Equally important to comprehend the sunset clause, this determines how long it will last till the building is built. Normally, it could vary from 18 up to 60 months. The sunset clause also encompasses a date for the buyer to legally walk away from the contract if the building isn’t constructed in time.
Do your research regarding the developer of the property plan. Check whether they are properly funded, for instance. You need to make sure that you are dealing with a reputable developer. Find out the amount of time he/she has been in the business and information regarding his/her experience. Equally important is researching about the builder. He/she should have adequate builder’s insurance as well. Moreover, in order to get a bigger picture of the building you are financing for, you might want to check some of the past works of the builders. This will allow you to anticipate whether the style and craftsmanship of the building are worth paying for. Previous buildings or under-construction projects are positive tangible examples that should help you get a preview of the house.
Minimise and administer the deposit
In some cases, the developer will agree to receive a deposit bond or bank guarantee. This way, you won’t necessarily have to exchange a cash deposit. This will make it possible for you to direct your money towards existing debts or other sources. However, if you do decide to pay a cash deposit, and the sunset clause is extended, you should check whether your deposit is likely to be invested. In this case, will you be offered a percentage of the gained interest or will you share it with the developer?
Valuation and pricing
Before settling the exact value of the house, it is important to have a professional opinion’s settle whether the pricing is correct or not. The vendor’s view may be utterly distinct from an expert’s opinion.