What are off the plan apartments? These properties are those that are advertised for sale before the building has been constructed. When you decide to purchase an off the plan apartment, you are simply paying for a property that has not yet been completed. Off the plan, properties can bring forward many benefits, but also have their set-backs! It is important that you are equipped with the necessary knowledge before you make a decision.
Consider these before you sign on the dotted line
- The contract: it is important that you review the contract carefully and understand exactly what you are buying before you commit to anything. Usually, you will need to pay a deposit to secure the property with the balance payable upon settlement. The date for completing the contract is usually not until the building is finished. You should carefully check the conditions of the contract and obtain legal advice on the terms, benefits and restrictions.
Some important questions you should consider before making a decision about purchasing an off the plan apartment include:
- Can you make changes to the finishes in the kitchen or bathroom?
- Can you select your own appliances or alter the floor and wall tiles
- Can you visit the site during construction
- What are your rights if construction is delayed or the design is altered
- Can you on-sell the property to someone else during the construction period
It is crucial that you read your contract carefully and obtain advice from property professionals before you sign on the dotted line.
- Expression of interest: usually you can purchase an off the plan property at an auction or at a fixed price. At the same time, developers can also contract real estate agencies to sell their properties. An expression of interest payment does not secure the property but it signals interest. Once you make an expression of interest payment, the agent should then give you a written confirmation that you have no obligation to buy the property, there is no obligation to sell the property to you and that they will refund the deposit if you don’t end up securing the contract.
- Prohibited marketing tactics: when buying an off the plan apartment in Sydney, it is important that you aren’t misled or deceived during any of the processes. Agents must follow strict rules when they are selling off the plan properties. These include:
- Prohibited to advertise a property for a lesser price than other similar properties if the advertised property is no longer available
- Can’t indicate a price range for a property – where the lower end is less than the agent’s estimated selling price for the property
- Restrained from keeping your expression of interest payment and using it as a tact to get you to up-bid another buyer.
Benefits of buying off the plan apartments
Like most things in life, there are always drawbacks but there are also always benefits! Let’s take a look at all the positive aspects you should know about if you are considering purchasing an off the plan apartment in Sydney. Off the plan deals usually, have a bad reputation. However, they are not always as bad as they may seem. Here are some of the perks of buying off the plan:
- Large stamp duty savings
- Depreciation benefits
- Repair cost savings
- Lower power bills
- Potential capital gains
- Buys time to secure a deposit
Yes, there are good reasons to buy off the plan apartments. You just need to conduct your research. Need help making a decision? Talk to property investors or professionals who can assist you to make a choice.