Buying a house off-plan has its benefits, but it also has its risks. Use the following precautions to minimize the risks and protect your investment:
Make Sure the Contract Protects Your Rights
When buying an off-plan property, you will be buying a "proposed" property rather than one that is existing. You shouldn't just take the developers at their word when they make claims of how the house will be built, the materials that will be used and the type of security features that will be in place. Instead, these things should be detailed in the purchase contract. Here are some of the details that this contract should contain:
- How much time you have to commit to or pull out of the agreement
- How much deposit is required and what happens to the interest it will accrue before the construction is complete
- How much time the developer has to complete the project
Make Sure the Developer Has a Good Reputation
Enforcing a contract when one party breaches it isn't easy, so it is advisable to sign a contract that you know has high chances of succeeding. Your purchase contract has a high chance of succeeding if the developer signing it has a good reputation. Therefore, research the developer to confirm that they have successfully handled similar projects before. The research will help you avoid getting into an agreement with a developer that has is facing a litany of court cases for breaches of contracts.
Start Your Loan Search Early Enough
Finding a mortgage for an off-plan property isn't that easy because financiers fear them. There is no guarantee that the development or property will be constructed in the proposed manner, which means the financier risks losing their money. Besides, buying an off-plan house means that you are buying a future construction at current prices, which also presents a risk to financiers. Therefore, understand the terms and conditions usually attached to such mortgages and start your mortgage hunting early to improve your chances of success.
Make Sure the Home Warranty Is Good Enough
Most off-plan properties are sold with home warranties to assuage the fears of potential buyers who feel that is it risky to buy off-plan properties. Scrutinize the home warranty to confirm what it covers; the usual risks include loss of deposit and non-completion of construction, among others.
Hopefully, your off-plan purchase will be a worthy investment after applying the above measures. Consult a company like Almost Home Real Estate Services to help you ensure that is the case.