People say that "location, location, location" are the three most important factors when buying a property. You may agree if you have found the perfect spot for you and your family and cannot imagine living elsewhere. However, there may be no homes on the market at that location, but a developer may be getting ready to build. In this case, you may be tempted to reserve a property on the expectation that it will be your dream home — in your perfect place. But what do you need to know about the pros and cons of this approach, typically known as buying "off-the-plan"?
Proceed with Your Eyes Open
The first thing to understand is that this approach is not unusual and can certainly work so long as you take the necessary precautions. You may also be able to get certain concessions depending on where you live when it comes to stamp duty.
Appreciate the Advantages
When you buy a property in this fashion, you can customise the build according to your specific needs. You may also be able to negotiate with the developer so they add certain fixtures and fittings to the plan. This would obviously be challenging if you were buying a previously finished home.
Make sure you get a guarantee from the builder that covers any potential faults, problems or defects that may arise once you have settled. Also, pay very close attention to the financial requirements. See how much of a deposit you need to give with the contract and see if you can split it over a longer period if that is beneficial.
Understand the Potential Drawbacks
You should be aware that there can be certain drawbacks and pay even closer attention to these issues from the outset. Ask the developer what should happen if the building is delayed for any reason, within or outside their control. Often, they have the discretion to end the contract if they feel such a delay would be substantial. You should also have the right to terminate the contract during a certain period of time, known as a sunset clause.
Look to the Future
Finally, remember that a lot can happen in your personal circumstances between now and the projected settlement date. After all, this could be some years into the future, and you need to be comfortable with the commitment that you are making.
Get Expert Advice
As always, with any real estate transaction, make sure that you work with an experienced conveyancer. They'll take the time to go through the contract and explain the pros and cons of each clause in detail, so you can be sure that you are making the right decision.
For more information, contact a conveyancer near you.
