How does buying off the plan work?

Buying a property can be the most rewarding experience of a lifetime. Buying an establish property or an off the plan property are two popular ways to get into the real estate market. However the process of buying established or off the plan can be quite different.

Buying off the plan means that you are buying a property that has not yet been built or it’s still under construction. Ultimately you cannot physically see it or walk through it.

Your due diligence is to review the property documents, including the floor plans, price lists, artist impressions and other miscellaneous details to help make your decision to buy.

So if you are considering buying a property off the plan, you might want to know how buying off the plan works. At Crest Property Investments, we ‘hold your hand’ through our professional concierge service from start to finish.

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Here is an overview of the process to buy off the plan:

Step 1 – Establish your budget

Buying a property is very exciting. Some often start shopping without having an guidance as to what they can afford. The first step in the buying process is to establish a budget. Ascertain what you can afford, by considering the loan repayments, estimated outgoing expenses of the property, how much deposit you have to meet the general requirement of a 10% deposit of the purchase price.

When signing a contract off the plan, the transaction is unconditional. Having an establish budget is the foundation to making the right decision.

Step 2 – Confirm the basis behind buying

Once a budget is in place, determine the purpose of your choice to buy. Are you buying a property to occupy or are you aiming to invest. Some buyers consider the prospect of living in it short term with the long term approach to rent it out.

Set strict objectives. If they vary from property to property, your decision making will be restricted by your emotional attachment. A successful buyer needs to make this decision early so it doesn’t limit your opportunities.

Step 3 – Speak to a Property Adviser at Crest Property Investments

Now it’s time to seek professional advice. Someone who has property knowledge and strong connections to off-market opportunities. We pride ourselves at Crest Property Investments. It is at this point where you share your property experiences and objectives to buy.

There are many cases where buyers are still unsure what their primary objectives are. Don’t panic. It’s exciting to buy a property, but also an anxious one. We can help establish these in our appointment and give you time to digest them.

This appointment is a chance to build a repour with one another. It’s a good chance to ask as many questions as possible, particularly if it’s your first time buying off the plan.

As we learn what is suitable and relevant to your needs, we can commence the exciting part of the buying process. SHOPPING!!

Step 4 – Pick your property

We have an array of choices, from Apartments, Townhouses and House and Land packages. Additionally, we also have a fine selection of commercial properties to suit certain types of investors. We refine our search and start to present some wonderful new opportunities.

Ultimately, we present two to three properties and substantiate why we see them as suitable assets. For an owner occupier, we may be presenting properties within certain school zones while an investor purchaser may be satisfied with an area’s vacancy rates or connectivity of public transport.

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Step 5 – Place a reservation on your property

After taking some time to review our presentation, you come to the conclusion that you are satisfied with he advice and want to proceed with the purchase.

The next step is to complete a reservation form and to pay a fully refundable holding deposit of $1,000 – $2,000. The reservation then takes the property off the market, meaning no one else can take the property away from you. During this exclusive time fame of up to 14 days you can review the contract of sale, vendor statement and speak to a conveyancer or solicitor..

Step 6 – Execute your property purchase

It’s now time to sign up and buy your property. We meet to help execute and sign your contract of sale and arrange the developer to counter sign their end. Once co-signed, we collect a copy for you to keep and provide a copy to your conveyancer or solicitor.

In order to execute your property purchase, you will be required to pay a typical 10% property deposit. In the contract it will determine the day you must pay your 10% property deposit. This is generally within 7 days of executing the contract of sale.

The property deposit is then help in a legal trust account and retained until settlement.

Step 7 – Wait for the construction to unfold

We will regularly communicate with you, keeping you updated during the construction phase. At each milestone, we share photos taken on site and provide a written update.

As settlement approaches we will notify you between 2-3 months prior to settlement to commence your loan application process. This provides ample time to address your circumstances and ensure the bank will approve your loan in time.

If you are an owner occupier, you may want to look consult a furniture removalist while an investor may need to appoint a property manager. At Crest Property Investments, we have various professional contacts that can help you.

Step 8 – Property Inspection & Property Valuation

Once the property has reached practical completion, you will be provided with a pre-settlement inspection. This will give you a full preview to what you will soon settle. You are welcome to employ a building inspector to review the quality and workmanship. They aim to find defects and any other potential problems. Noting these defects on a condition report, we request the developer to rectify these prior to settlement. At Crest Property Investments we discuss property inspections with many reputable building inspectors. We can introduce to you to some to help ensure you have a quality property on your hands.

The property valuation can now be booked. Your nominated bank/lender can employ a valuer to attend the property as part of your loan application process.

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Step 9 – Property Settlement

WOW… As your buying experience comes closer to an end, we finally get to celebrate your property settlement. Once your lender and conveyancer have booked a settlement date/time it’s time to collect your keys!

Step 10 – Move In or Rent Out

Finally i is no longer off the plan. It’s now time to move in and enjoy your new property. If you are an investor, it’s time to get your property tenanted. It would be beneficial to purchase a depreciation schedule to maximise your full depreciation claims for year one. We can again introduce you to a quantity surveyor who create it for tax purposes.

Congratulations on your off the plan purchase!

www.crestproperty.net.au

While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you want to learn more please contact us. We welcome the opportunity to assist you.

February 2019