Buying Off The Plan
Bishwas Bhattarai, Senior Lending Manager
BS MIE, Dip FS
22 April 2017
Buying the property off the plan has its advantages to some degrees however, a lot of research and expert knowledge is equally important to make it a worthwhile investment.
Especially, in the last years we have seen the trend for buying the off the plan property sky rocketed. Especially, in the bullish market it provides and a great comfort for buyers who finds them in the better position by the time property is ready. However, we can hear the alarm bells ringing and any buyers who enters into a binding agreement now.
For this publication we will be focusing on the economic and financial ls impact for purchasing the off the plan property.
The biggest concerns in this market for singing the off the plan property would be the future value or the value of the property when complete.
For the purpose of the loan, Bank and financial institution valuation is very different than what one might estimate. Bank’s Valuation is based on comparable sales of similar properties with similar attributes in the similar suburb and next suburb. For the off plan it means not in the same building as well. It is not relevant of what price was paid for, market growth on the area or the properties listed on sale. Especially, in the bearish market this could mean the property when ready could be valued less than what actually was paid for.
Biggest concern in the bearish market would be the supply of the property. Especially, if there are over supply usually caused by the availability of lot of properties
There are numerous factors to consider in order to purchase off the plan property.
Firstly, contract of sale are very much complicated in comparison to the existing properties. Sunset clause which recently been the talk and the special condition are few that needs to be fulfilled as per vendors requirement. Off the plan contract generally gives very less negotiating terms and condition however, having a knowledgeable and experience conveyancer could always provide you with upper hand.
Also, the finished product may not be the same as per the plan and size. There are numerous compliance, and requirements needs to be met while construction is going