There are many benefits to buying a residential property off-the-plan but for many, it is a completely new way of purchasing property.
Here’s the 7 most common questions first-time purchasers ask when buying of off-the-plan property.
Will the display be identical to my apartment layout?
The display suite will show a level of finishes but because there are many different configurations and apartment types within the one building, you’ll need to ask the sales consultant how your apartment differs from the display. Request a schedule of finishes relevant to the apartment you’re looking at.
When will the building be finished and when do I pay for it?
Construction times vary depending on the size of the building – the larger the construction, the longer the build time. You’ll most likely need to pay a 10% deposit when you sign the contract, with the balance due when it’s finished.
Who normally keeps the interest from my 10% deposit?
This varies from project to project. Usually the developer receives the interest from the deposit. It is always wise to ask the sales person this question, as often you can negotiate to share part or full payment of the interest with the developer.
If I pay a cash deposit is it secure if something happens to the developer?
Your deposit will be held in a solicitor’s trust account until the project is finished or the registration/sunset period expires.
What is the sunset clause or registration period?
A sunset clause is a section in the sales contract that refers to the maximum amount of time the developer has to complete construction of the project. It also gives the buyer a date when they can legally walk away from the contract if the building isn’t finished on time. Your deposit should be returned if the developer doesn’t by the date in the sunset clause.
How can I ensure tenants will look after my new property?
You can never know how tenants will treat your property so it could be a good idea to take out landlord insurance. This insurance covers you for potential loss of rent due to tenants defaulting on rent, causing malicious or accidental damage and public liability.
What happens if the market drops or interest rates rise – do I still have to settle?
Yes, you are obligated under the contract to settle. It’s important to get independent advice form an experienced broker or your bank. You will then be sure you have enough deposit and can afford the repayments should interest rates increase.
At Craig Tracey Lending we give you all the information you need in simple language that is easy to understand – we call it your “Borrowing Plan”. Click here for more details: Your Borrowing Plan