How safe is buying off the plan?

How safe is buying off the plan in Melbourne Australia?

Are you thinking to buy off the plan? Maybe you are wondering how safe is buying off the plan in Melbourne Australia? We have some insight here and it is probably not what you think.

Apart from investors, who buy to profit, a big percentage of off the plan townhouse buyers are making lifetime investments. That is why making a purchasing decision must be made wisely. Buying off the plan is considered to be a safe and legal way to finding a perfect home, but it is a tricky process and includes a lot of papyrology, a lot of time and a deeper analysis. Here are some things to consider when deciding to go for off the plan townhouse, which can help answer the question many buyers ask – Is buying a property off the plan safe?

The developer

The first thing to look for when looking for a safe investment is the developer. The reputation the developers enjoys say a lot about how safe buying property from them is. It is always a wise decision to buy from the experienced developer, who has many successful projects behind and no legal problems in their working history. Therefore, it is important to do detailed research before signing the contract and ask some questions such as was the previous project completed on time and are there any serious complaints from previous buyers.

The contract details

The contract is the legal platform for all legal interactions between the developer and the builder. That is why it must meet all the necessary information and protect the buyer’s rights. All the agreements made must be made explicit and clear and must meet all the legal terms and be approved by legal authorities.

The future development of the area

The location is of great importance when looking for a safe investment, as it can impact the price when signing the contract, but also after, when the property settles. The development of the area where the townhouse is located can change the price and sometimes change it drastically. That is why it is important, especially if the property is located in the area that is yet to be developed, to check if there are any future projects in the area that can affect the value of the property, such as building a noisy boulevard or industrial complex.

The property specifications

For making a safe investment and purchasing the right property, it is important to pay attention to all the information concerning property specifications. This includes not only the location and square footage but also house orientation, amenities, room organisation, materials used, electricity and water systems, design, flooring, finishes and other. There also some information that concerns the property specifications in a way, but is not part of the contract. This includes different pieces of information such as what the neighbourhood is like, is it safe, how far away is the city centre, questions related to public transportation and townhouse connection to other city areas and so on. This information must be carefully researched in order to make a safe investment when buying off the plan, since they can not be found in the original contract.

Check out more info about buying a townhouse off the plan in South East Melbourne, or specifically in Burwood East, Mount Waverley or Box Hill.

House and land packages are also often sold off the plan see more info about home and land packages in Melbourne Vic here,

5 Common concerns buyers face when buying an off the plan townhouse

5 Common concerns buyers face when buying an off the plan townhouse

Since the purchase of a property is big financial and usually a lifetime investment, when deciding to or not to purchase a townhouse or any other property type off the plan, buyers frequently have some well-justified concerns. Here are the 5 Common concerns buyers face when buying an off the plan townhouse. These are the frequent questions that every buyer needs to get answered before purchasing a property off the plan.

Will I get the same townhouse that was promised?

It is in the developers best interest to deliver what is promised. However, due to financial matters, time limitations or regulatory controls, they sometimes make changes to the project, whether it is a change in the design, material or construction itself. The good news is that the buyer is protected by the contract with what is called defects liability clause. Having that in mind, the developer must consult the buyer when making any changes that are not the part of the original deal. The developer is obligated to deliver the promised quality, but sometimes there are failed expectations on the buyer’s side. It is a risk all buyers have to take.

Are my rights protected?

The contract has to be detailed and cover all legal matters that protect the buyer. The disclosure statement is there to ensure the property purchase and future ownership of the buyer. Sunset clause is there to ensure that the construction will be finished on time, and if not, the deposit must be returned. Withdrawal cause and Cooling-off period are related to conditions in which the buyer can back off of the purchase and defects liability clause secure the rights of making objections in the case of defects made on the house. If in doubts, it is always a good advice to consult with the legal adviser.

What are potential dangers I could face when buying off the plan?
Apart from not getting the expected results, the other risks include construction delays and pauses, not respecting the sunset clause and bankruptcy of the developer. Most of the time, fortunately, if the contract is explicit and legal as it should be, the developer is obligated to return the deposit. For the investors, the danger can be property value going down where the purchase proves not to be financially rewarding.

Will the change in property value, after the contract is signed, affect me?
When buying off the plan, the price and the deposit are fixed and determined by the date the contract is signed, Therefore, if the property value changes, even drastically, buyers are still protected by the contract and will not be affected. The investors, however, still face the problem of property value variations, as mentioned above.

Can I change my mind and withdraw from the off the plan purchase?

The answer here is yes, but there are certain terms under which the withdrawal is possible. For example, in the case of delayed construction, the construction terms not being met, or violating the agreements made between two parties, both developer and the buyer have the right to withdrawal. That is why withdrawal conditions have to be thoroughly analysed, as not all contracts are the same.

Are you interested to purchase an off the plan townhouse? Check out this article about off the plan townhouses in Melbourne, Victoria, Australia or this article about buying a townhouse in South East Melbourne. There is more great information about what you should know before making the decision to buy.

Why buying off the plan townhouses is perfect for first home buyers

For those who decided to go with a townhouse as the best first house option, there are few things that need to be taken into account. Buying the first house usually brings with it some amount of investment inexperience, a lot of chaos and stress. Some people, when looking for a perfect first home solution, don’t have the patience to think through all the possible options, but those who do are usually sooner or later introduced to the idea of buying off the plan, which is probably one of the best ideas for the first time buyers. Here are some useful advices for townhouse buyers, who decided to go with the buy off the plan option for their first home purchase, that can help in finding and buying the best property for their needs.

Townhouses have many advantages to other building types They are neither apartments nor single houses and have the best of both worlds. It is known that they are cheaper than single family houses in the same area but provide almost the same comfort. The strategy to buying a townhouse off the plan is similar to buying an apartment or choosing between a single houses complex. There are few units available and buyers can choose which suits them the best. Since these homes are cheaper, they are great compensation and a perfect option for anyone who is looking for a family home with a garden, but can’t afford the full pleasure.

When looking for a perfect first home it is important to buy early when the project starts, because with buying off the plan the golden rule is that buying a home early in the project lowers the price and requires the lower the deposit. When it comes to payment and buying a first house, this is a great solution because not only the price is lower than the finished townhouse of the same type, but also because there is more time to dedicate to getting a loan from the bank and saving more money for the desired home. You have more time to consider your financing options and secure a financing, so you don’t have to worry about unnecessary financial issues. Many developers offer great deals for the first buyers and many also offer some discounts and special offers, which lowers the price of property even more.

Buying off the plan gives more time for necessary financial and organisational preparations. You will have more time to think and organise your budget effectively, so when the sunset date is known you be able to make planes about furnishings and other details. It will allow planning moving in way ahead and make necessary preparations, which is not the case when buying an already built townhouse. Some builders also offer to make adjustments in projects for clients needs, meaning there is more room for changing what you don’t like about your future home. This makes it more customised and perfect for first-time buyers who are looking for their special place.

Learn about off the plan townhouses in Mount Waverley or Burwood East. There are some great options available.

Advantages and disadvantages of buying off the plan townhouse

When considering buying off the plan townhouse, we must take into consideration both pros and cons of this option to make the best judgment.

Pros

Good price

The main reason why this property buying option is getting more and more popular is that fairly good price you get for a brand new home. The thing with buying off the plan is that it is in developers interest to get the first funds as quickly as possible to ensure the financial stability. That is why the first off the plan townhouses are the cheapest and chances are big that you will be in a good position to pick the best home developer offers. The price is fixed so that means you can even profit from buying this way if property value goes up.

Flexible payment methods

What is great about purchasing your dream home off the plan is the flexibility of payment. There is buy now and play later method, which includes only small deposit usually prior to signing the contract. Since the price is fixed, you won’t have to deal with unnecessary math. You can also choose from different payment options and go for the one that suits you best.

More time for making plans

Buying off the plan is great because it not only allows you to deal with your finances more effectively but also with your time and preparations for moving in. As construction of your new townhouse takes some time, you can save more money and it gives your bank more time for loan approval and raises the chances of getting it.

Cons

Unexpected results

Since buying off the plan is buying a property before it is built and ready for moving in, we buy it based on the plans and provided information only. Since we can not see and feel the space we are buying, we must be ready for an element of surprise when it comes to how will our townhouse look like. Since developers have more-less freedom to go for the alternatives in choosing the material and ways of building after you purchase the property and sign the contract, there can be some unpleasant surprises such as low quality. What we can deal with here is our expectations not being met.

Construction competition past the due date

Another problem many buyers face is delayed house competition. Due to financial issues developers sometimes face, there is a possibility of not meeting the construction due date which can delay your plans of moving in.

Cancellation or bankruptcy

These are both probably the worse case scenarios, but both can happen. Cancellation of your contract under special circumstances is possible, so there is a chance if you haven’t studied the contract to a detail, that your contract gets canceled. Many buyers also risk dealing with the bankruptcy of the builder. What can happen here is simply not getting your townhouse at all and there is a chance of not getting the deposit back as well, which is not a pleasant experience.

Read more about the 6 things to consider when buying an off the plan townhouse in Australia.

 

6 things to consider when buying off the plan townhouse

Our finances and legal matters play the main role, but when buying a townhouse off the plan, there are some things that need to be considered before signing a contract with chosen developer.

Construction due date

The first thing to consider is how long will it take until you move in your new home. Some projects take longer to finish, so think about how long can you wait for your new home, as construction can take up to 2 years or even more. If the deadline doesn’t suit you or you perceive it isn’t worth waiting, for financial or other reasons, go for another option.

Location and surroundings

While analysing the plan of your potential future townhouse, take the time to think about the location. Remember it is not only about the distance from your work, school, important facilities or town centre, but also the safety of the neighbourhood and connection to other important locations in the city. Noisy and busy streets and neighbourhoods are not really desirable options. On the other side, good infrastructure, parking lot, public transportation availability and calm neighbourhood are always a plus in choosing a perfect home.

Quality

The developer of your choice should have a good reputation for the quality of the work they provide. It is not unusual for developers to go for alternatives during construction, especially when it comes to materials used while building your home, if their finances ask for adaptation. Make sure that they have a history of previous buyers who are content, so even when the materials, floorings and windows aren’t exactly like on a plan you still get a good quality.

Public utilities in the area

It is important to consider how high the bills for electricity, water, sewage and other utilities will be, as uneconomic systems are bad solutions in the long run and will greatly impact your budget in the future.

Space organisation and arrangement

Space arrangement is definitely very important, and we are all always hoping for more square meters for less money. But, what is also important is how that space is used, which is why buying a townhouse off the plan must be based on careful analysis of the space. Unlike when buying a townhouse which is already built, buying off the plan means we have to rely on plans only and try to visualise how that space will look like when the house is finished. Space must be used economically and wisely, so you get the best space arrangement possible.

House orientation

This is something many people neglect while buying their houses, but it is definitely necessary for consideration. There is a difference in having an east oriented living room or west oriented one. House and rooms orientation impacts how much natural light there will be during the day. Also, there is a difference in having a main street oriented house and having a park oriented house, so orientation definitely plays a part in choosing a perfect townhouse for your needs and should be taken into a count.

Check out info about townhouses in Melbourne.

3 steps to buying your off the plan townhouse

 

Buying a dream townhouse off the plan is a great solution for any budget out there. As important as choosing the right property is, using the most of what developers have to offer is crucial and will give buyers the right home keys. To make the best purchasing decision and avoid being too caught up in the process, here are some tips to help in finding the best option and purchasing the most suitable off the plan home for any taste.

Know what you are looking for

Before buying a property off plan it is important to have well-defined criteria and know what you are looking for and what you are trying to avoid, and this goes both for townhouses and developers. It is important to know your financial limits and based on that do a proper research on developers and properties available. What are your preferred location and townhouse size? What about available payment options? How should the interior look like and what is the number of rooms and bathrooms? How compatible your criteria is with actual prices? These are some of the questions you have to answer before finding a developer and property which suits you.

Choosing developer and the plan

This step takes time, but it is crucial for finding a perfect house. After you have established your criteria and done a research on potential developers, it is time to narrow your options and pick a developer and a townhouse plan which suits you the most. It is important to pay attention to developers reputation and the quality of work they provide, so take the time to do a research to prevent yourself from regretting your choice later. The perfect developer should have a good reputation and must match your criteria so don’t haste and take the time to find the right one. When the developer is chosen, it is time to analyze the house plan. Does it match your criteria? Is the arrangement of rooms suitable? What are the floor and ceiling like? Windows, doors, and materials? When will the house be finished? Can you customise the interior design? If in doubt or inexperienced, ask for a legal advice, as it is important that chosen developer matches all legal criteria.

Signing the contract and choosing payment options

When signing the contract be sure to understand all the rules, terms and conditions mentioned. Take time to analyse cooling off period and deposit withdrawal options. Read carefully about inclusion and warranties as well as payment options mentioned in the contract. Usually, when it comes to payment, with most buying off plan properties, developers ask for a 10% deposit as a guarantee. Most of the time there are few payment options available, paying in cash or taking a credit from the bank, so pick the most reasonable option for you. Pay attention to a stamp duty which must be paid while purchasing a house. Analyse the contract carefully, check the annual fees and make sure all legal terms are met in order to avoid any unpleasant surprises.