Buying off the plan
Buying off the plan can be an exciting, daunting, stressful and rewarding experience. Here are some simple steps that you can take to make this process easier.
Do your research.
Most people do research before buying a new TV, car or going on a holiday. But when it comes to property, as long as the location and basics like the number of bedrooms meet your needs, research is often overlooked. Here are some things to consider:
- The developer’s experience: Have they developed a property of this size before? Visit previous projects to get a sense of the community and hear first-hand from past owners.
- The builder’s expertise: Have they had claims against them for defective work? Most properties will have minor issues as they become “living” properties. Look at the nature and extent of the claims being made. Were they successful or not?
- The titling: You might be buying an apartment but what else is being built? If the property is mixed-use, will it include hotel or retail facilities? Will there be multiple bodies corporate? What is the expected completion date for your property and others. Will yours be finished earlier and you then need to live with construction around you for another three years?
You are the expert when it comes to designing the property of your dreams, but don’t forget to speak with other experts for advice including:
- Solicitors—is property their expert field and do they also have expertise with bodies corporate?
- Finance—not just your mortgage but other costs, including body corporate fees.
- Insurance—ensure you speak to your broker about what your obligations are.
- Body Corporate and Community Management (BCCM) office—for guidance on body corporate legislation.
Be aware of artist impressions.
From time to time, the developer may make changes to the original plan. Consider what changes you would be okay with and have an honest conversation with the developer so you can seek protections within your contract.
Be practical rather than emotive.
Check your plan includes items that have been promised. If the site is mixed-use, check the operating hours of retail areas. Check the position of your apartment in relation to retail areas. In terms of fees, do you know what your ongoing costs will be. How accurate are the levy estimates being provided? Low levies may seem attractive initially however make sure the estimate is realistic to insure and maintain the property. And most importantly, make sure you have the capacity to pay increased levies and expect that they will change over time, in-line with the market.
A big advantage of buying off the plan is the ability to change the default design—you might like a different car space than the one on offer or timber flooring rather than carpet, perhaps more powerpoints. This is the time to work with the developer to get your dream property. Any changes you want will be much easier to do when buying off the plan than after completion when body corporate and/or council approval might be required.
Just remember caveat emptor—buyer beware—it is your responsibility to be an informed purchaser and don’t forget that the developer is wanting a positive outcome also.
Information in this article is of a general nature and should not be considered as tailored, professional advice.
Article written by Matilda Halliday, National New Business Advisor at PICA Group
This article was first published in the Spring 2018 edition of UDIA Queensland’s Establish magazine and is republished here.