Five Steps to Successfully Buying Off-The-Plan
Buying an apartment off-the-plan offers significant advantages but it can be a little tricky the first time. To help you navigate your off the plan buying journey, we’ve put together a five-step buying process.
There are a few key differences between buying an established property compared to one that's not built, the most obvious being that you can’t see or walk through your new off-the-plan home or investment yet. When you’re buying off-the-plan you instead rely on artist impressions, floorplans and property brochures that your sales consultant can help you understand in greater detail. Visiting a display suite is also an important part of the process. Here you can touch and feel the fixtures and fittings and get an understanding of how it’s going to look in real life.
To help you navigate your off-the-plan buying journey, we’ve put together a five-step buying process.
1. Do your research and establish a budget
Spend time researching the area, developer and team on the project. Ensure it’s both a sound investment and lifestyle decision for you.
If you’re buying an apartment to live in check to see that the location suits your lifestyle, or if you’re buying an investment property ask to see statistics that show the rental demand and population growth for the suburb.
You’ll also need to make sure you’ve saved enough money for your deposit. Depending on the development you’ll be required to pay between 5 and 10 per cent up front. The remaining amount can be paid at settlement once the property is finished being built.
It’s a good idea to speak with a finance specialist to determine how much you can borrow and understand the benefits, savings and/or additional costs involved in purchasing the home (such as legal fees and stamp duty).
2. Select your apartment
Book an appointment with your Sales Consultant quickly as to allow a greater opportunity to choose the apartment that meets your criteria.
When looking at different floorplans and prices keep in mind other features like the aspect (whether the apartment faces north, south, east or west), the level the apartment is on and access to amenities like gyms, pools or rooftop gardens.
Once you have selected your apartment you will need to pay a $1000 refundable reservation fee to ensure it is taken off the market. This gives you up to a week to organise your finances for the deposit.
3. Finalise your contract
The contract is sent to your nominated solicitor or conveyancer for signing. If you don’t have a solicitor or conveyancer, your Sales Consultant will be able to guide you in the right direction. From the issue date of the contract, you’ll have 14 days to exchange contracts and pay the balance of the 10% deposit.
If you are a first home buyer, don’t forget to ask your solicitor for assistance with the First Home Owner Grant.
4. Wait phase
Depending on when you purchase your apartment, the build time can be around 24 months or more. During this time continue saving for your property as traditionally lenders require you want to have at least 20% deposit by the time you settle.
If you don’t have 20% by the time you settle, ask your lender about Lender’s Mortgage Insurance which can allow you to buy property with a smaller deposit.
We’ll be in touch 12–16 weeks before settlement to let you know we’re on track. This is when you should contact your financier and conveyancer. You will have an opportunity to inspect your property and your valuer will also have access to the property at this time.
Once the plan of subdivision is registered the property will receive an occupancy permit, from this date you will have 14 days to settle.
Your conveyancer will effect settlement on your behalf and you will be formally notified. Then you can then collect your keys and move in or rent it out.
It’s time to pop the champagne — congratulations!
Top 5 Benefits of Buying off-the-plan
- You only have to pay a deposit with the remaining balance on completion of the property so you have more time to save.
- New properties have little or no maintenance.
- There's more tax depreciation available on new properties.
- Stamp duty savings
- In Victoria, if you are a first home buyer, you are entitled to the First Home Owner Grant (FHOG) when you purchase a new property.