4 myths about buying off the plan
Buying a property off the plan can seem like a risk, but there are a number of benefits to this strategy for Canberra buyers. Let’s take a look at some of the myths and realities of off the plan purchases.
Myth 1: You can lose your deposit when buying off the plan
This is a popular topic for TV segments. However, in the ACT is that any deposit given to a builder is held in a trust account until the building is finally completed.
Myth 2: There’s no protection again builder defects
Before you settle on an off the plan property, your builder should arrange a room-by-room inspection, This gives you the chance to:
- check for any issues that need to be fixed before you settle
- make sure that all fixtures and fittings outlined in the initial purchase agreement are in fact included in the property.
Myth 3: Off the plan is bad for first home buyers
In the ACT, buying off the plan homes are considered ‘new build’ properties. If your property meets the following criteria, you may be eligible for the First Home Owner Grant of $7,000:
- building commenced after January 1, 2017
- property is valued at $750,000 or less, and
- you are a first home buyer,
Myth 4: You still have to save a 10% deposit
Along with the FHOG, even better news for first time home buyers is that an off the plan purchase can give you extra time to save your house deposit. Usually, off the plan properties can be secured through a bond only, rather than the traditional 10% deposit. This gives you extra time to save what you need while the building is being completed.
Hints for making the best off the plan purchase
If buying off the plan meets your needs, keep these things in mind to make the most of your purchase:
- Know the market: Understanding price trends in the local area is important before making any real estate purchase. For investors in particular, it’s crucial to know whether an off the plan property in your desired location will provide maximum capital growth over the long term.
- Do your research: Researching the history and credentials of the builder overseeing your off the plan property is key. Where possible, make time to inspect previously completed projects, talk to residents and check online for any relevant reviews and information.
- Get the right advice: As with any property purchase, clear, expert advice for your particular financial situation should be part of your plan. This will help you make sure you’re aware of all the potential costs involved. It will also help you develop a concrete strategy for financial security once you buy. The right legal advice is also important to protect you from potential issues like delays or queries on your contract.
To talk with our expert team about preparing to buy off the plan in Canberra, get in touch with the Milestone Lending Team today on (02) 6176 3110.
