Off the Plan Purchases

With our practice in Burwood, every day seems to bring changes to our skyline. This is the case in many Sydney suburbs, other parts of New South Wales and Australia. Construction, particularly along transport corridors, is booming and heading upwards. What does this mean for the purchaser and how is it affecting conveyancing?

A major change is that many purchasers are buying “Off the Plan” for the first time. With an “Off the Plan” purchase the Vendor sells a property that is in the planning phase only or at best, partially constructed. The Vendor is usually developing a large site with a lengthy construction period.

“Off the Plan” provides the Vendor with the advantage of locking in up to 100% of their sales before the soil is turned or the first nail hammered!

What do you need to know as a Purchaser?

Typically you will see an illustration of the planned development and visit a display site. If this display site is not located at the actual planned building site, ensure you visit that location and check the surrounding area and amenities.

Display sites provide an idea of your future dream living quarters. Draft plans, for both the entire development and individual units/townhouses within the development, are on display for your perusal. Agents will be occupied selling you the “image” and lifestyle of the site you are proposing to live in. The display unit/townhouse does not pertain to be identical to the one you may be purchasing but provides a three dimensional floor plan.

When visiting the display you should take note of fixtures, fittings and finishes and consider what choices you have regarding any changes you may request.

Be mindful that the Vendor is entitled to make variations to the plans as may be necessary for the construction of the development. For example, it is very common for the Vendor to be able to decrease the area of the unit less than or equal to 5% of the area proposed in the Contract and you cannot raise any claim or objection to such a matter.

What do you need to consider?

All conveyancing requires due diligence, consideration of location, need and affordability. If you decide to proceed, you need to read the Contract and have the capacity to meet your future financial commitment.

There are a number of steps that follow:

*        Complete an Application Form providing your details, details of your solicitor, nominating the size and location of the apartment you are purchasing, and the agreed purchase price

*        Pay a holding deposit (usually around $5,000- $10,000) to facilitate the Contract being issued in your name and sent to us

*        We will prepare a Contract Review and discuss the particulars of your Contract with you – you are still required to read the Contract yourself before signing

*        Depending on the Contract, the balance of the 10% deposit will be due either on exchange or within a set time period after exchange.

 

The advantage to you, the Purchaser, is that you have secured your property for the 10% deposit and settlement is quite some time into the future.

Have your finances in order and start working to improve your financial position immediately.

 

Good luck with your property search. We are always happy to assist you – call (02) 9744 0722 today to discuss your needs.