Purchasing a property ‘off-the-plan’ can be a complicated process that typically requires assistance from an expert in conveyancing. Melbourne has no short of conveyancing practitioners available to help buyers navigate this tricky process.
Buying off-the-plan means purchasing real estate that does not actually exist when the contract is signed. It is a popular choice because of the possible financial benefits, which can include huge stamp duty savings. Of course, there are also several risks involved with buying something that essentially doesn’t exist, including unreliable settlement dates and complex conveyancing issues – not to mention Melbourne’s volatile property market.
As with any major purchase, considerable research should be done beforehand to ensure you are making a good investment.
Buying off the plan offers buyers a range of benefits. These include:
There are many potential financial advantages of buying off-the-plan, such as:
- Big stamp duty savings
- Tax depreciation benefits
- Lower purchase price – Off-the-plan properties are often very competitively priced, and the price can be locked in at the contract date.
- Potential capital gains – A property’s value will generally increase between the signing of the contract and the completion of development.
- Government incentives and grants.
- Time to save for a deposit – These properties often allow buyers to pay the deposit via a ‘deposit bond’, giving them more time to save the 10% usually required as a deposit
Financial advantages like these mean buying off-the-plan is one of the easiest ways to enter the property market.
A Brand New Property
Off-the-plan purchasers get a stylish and contemporary home fitted out with brand new appliances and the latest technology. This means the property and its fittings shouldn’t require maintenance for a considerable amount of time.
Purchasers may get the chance to customise the property to a certain degree by making suggestions on the design and finishes.
The main disadvantages relate to the potential risks and unforeseeable issues that can arise. Hiring a Melbourne conveyancing solicitor can help you avoid and/or deal with some of these common pitfalls.
Projects can go over time by months and sometimes even years. When this occurs, the settlement date can be postponed by a significant period of time. This can cause a wide range of problems, including the risk that a buyer’s finance approval may lapse before settlement occurs.
Not What You Ordered
It’s very hard to get a sense of what a building will actually look like when you are relying solely on pictures. There is always the chance that the finished structure will vary slightly from what you expected in terms of size, area, fixtures, fittings, etc. You may also be unhappy with the workmanship on the completed product, or you might simply not like the look of the completed building. For example, a room may not get as much natural light as you expected.
Contracts and Section 32 Vendor’s Statements for off-the-plan matters are usually long and very complicated, necessitating the considerable involvement of a conveyancing solicitor.
Most off-the-plan transaction contracts contain special conditions that will allow vendors to cancel the contract under specific circumstances. Permission for the development could also be refused or could become unviable.
Despite the risks and potential problems with conveyancing, Melbourne home buyers continue to opt for off-the-plan properties because of the considerable financial benefits – and the added appeal of getting a brand new home built just for them.
As with any property purchase, getting the best result is simply a matter of doing considerable research, staying abreast of any movements in the property market, and investing in expert conveyancing assistance.