There is a lot of excitement and joy in being able to own your own home. Buying off the plan is a popular option for those looking to own a new home.
It is enticing to be able to own a brand-new home, designed to a plan that you have approved, along with brand-new top of the line appliances and finishes as you have chosen. This is especially so for first home buyers, who can also benefit from government initiatives such as stamp duty exemptions, first homeowner grants and developer incentives.
Buying a brand-new home off the plan does however come with some risks and considerations. It’s important to understand these risks, and be well-prepared to deal with them should they arise. Buying off the plan risks include the following:
Financial Risks
- A change in market conditions
- Rising interest rates
- Changes in the design or construction
- Changes in lending policies
These risks can each affect the property value of your home and can affect a lender’s willingness to advance to you a loan to purchase a property off the plan.
Without finance, these buying off the plan risks could affect a buyer’s ability to complete the purchase, without alternative means to source funding.
Time Delay Risks
- Builder Bankruptcy
- DA approval delays
- Builder finance approval delays
- Registration Delays
These risks can significantly delay completion of the construction and occupation of your home. These delays can also add unnecessary stress and expense to you.
These risks can be avoided by carrying out proper due diligence into the builder and the developer, the quality of the work that they provide, and their history on completing development projects on time.
Buying Off The Plan Risks: Our Conclusion
Buying an off the plan property can be a good investment option, but it is important to be aware of the potential risks involved and to take steps to minimise them.
Before making a purchase, buyers should consult an experienced solicitor in property development to assist with investigations and research on the development project, to carry out due diligence, and to ensure the buyer is making an informed decision.
Our trusted and experienced property development lawyers have assisted many purchasers buy off the plan developments and have also assisted other purchasers in managing risks and handling building and construction disputes.
Still looking to buy a property off the plan?
Long Saad Woodbridge’s property law team specialises in acting for both the developers and purchasers of off-the-plan projects, from small scale land subdivisions through to large mixed-use buildings across Australia.
Our experience has highlighted some key points that buyers ought to be aware of from the out-set of their property hunt, to set their expectations early as to what they can expect from a legal view. A well versed and specialised property lawyer is vital for a successful transaction.
Click here to read our guide to buying a property off the plan, and the key points to be aware of.
Do I need a property lawyer?
Long Saad Woodbridge’s property law team will always:
- thoroughly review proposed contracts and negotiate for the best protection mechanisms for the purchasers, as contracts will always heavily favour the developer.
- ensure that GST, CGT and all other state and federal government requirements are adhered to at all times.
If you are looking to buy off the plan or have bought off the plan and are experiencing problems such as those set out above, please speak to our property lawyers today.
Important Disclaimer: The content of this article is general in nature and for reference purposes only. It does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.
