We know that purchasing your first home can be a daunting and confusing process and when it comes to buying off the plan we wouldn’t be surprised if you were a little nervous.
Buying off the plan can save you money - but with those savings comes risk. We’ve put together a few things to look out for when buying off the plan, so you can make informed risks and navigate your way to home ownership with confidence.
We’ve all done it: carried out a quick Facebook-stalk of your new date just to see what they’re like, maybe even shared it around the group chat to get some opinions.
Much like this, you should always research your developer online and see what they’re into. Ask, what have they built before? How successful were those developments?
This information, just like the profile pic of your new date performing a keg stand, should give you an idea of what you’re in for.
Great – so you’ve found an apartment for $450,000! But it’s only 45sqm and your bank will only finance 50% of its value. When it comes to financing your home, size does matter. So before celebrating about your apartment’s affordability, it pays to make sure the size of your apartment meets your lender’s criteria.
Keep this in mind if you’re planning on applying for a HomeStart grant as there are certain criteria you’ll have to meet here as well.
It may seem obvious, but make sure you know the area you plan on moving to or investing in.
Ask, what kind of growth has this area seen? What is being put in place to ensure the continued growth of the area? Are there other developers in the area?
Things like infrastructure spend and population growth has affected the value of many of Auckland’s suburbs, so it’s important to understand the facts. Your developer should be able to provide you with current information about the area, what the capital gain growth looks like here, its amenities and transport links.
Much like the reputation of the developer, the calibre and track record of the construction partner is a key indicator of whether your development will actually go ahead or be completed.
Have a look online for previous apartments they’ve built and whether they adhere to building standards, or go above and beyond. Whether construction has begun is a good sign that your development has sold enough to fund the build. If construction hasn’t yet begun, checking the other things on this list should help give you an idea.
This is the part where you do your own research and make sure you agree with everything in the Sale and Purchase Agreement. It’s important that you have a lawyer go over the agreement and cover off any of the things set out in your conditional agreement like an independent builders report or land evaluation if necessary. It helps to work with a lawyer who is experienced in ‘off the plan’ contracts.
Buying off the plan is an excellent option for first home buyers, but only when the developer has covered their bases. To find out more about buying off the plan, or to see off the plan properties that tick all these boxes – book a meeting and let’s talk.
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