While buying an established home makes sense – after all, you can see it, walk through it and touch the walls – buying off the plan is a little harder. You’re committing thousands of dollars towards something you can only see on paper.
To ensure the process of buying a townhouse off the plan is stress-free, it’s important you understand as much as possible about what you’re buying. Here are the most important factors to be aware of before purchasing.
1. Know what’s in your contract
Your contract is a written plan for the building of your home. In the absence of being able to see and touch your finished house, the contract is your guide to what you’re getting. It will outline the timeline for the building process, the payment schedule and detailed specifications of the build. It’s an important document and it’s essential you fully understand it before diving in.
The contract includes pretty specific details, right down to the number of power points and the tapware. It will also outline the quality and colour of paint and other finishes. In the absence of being able to see the house before buying, the contract is designed to fully capture what you’re finished home will look like.
Your contract should also tell you what’s not included or what is available at an additional cost. These might be things like window treatments and flyscreens, light fittings or security doors. These little things can add up when you’re talking about a whole house and if you haven’t budgeted them in, you might be up for a few thousand more than you thought.
You should give yourself time to go over the contract, as well as sending it to your conveyancer for review. If you have any questions about any aspect of it, raise it with your builder to get clarification. After all, it’s in their best interests that you fully understand what you’re signing up to.
2. Research your builder’s reputation
Just like you wouldn’t date someone without stalking them online, you shouldn’t sign a contract with a builder without doing background research.
Find out how long your builder has been in the industry and how many properties they have built. Take some time to visit the builder’s previous work, inspect the quality and even speak to previous clients, if you can, to find out how happy they are with their property.
Not only do you want to ensure your builder has a reputation for quality work, but also that they have experience building the type of development you’re looking at buying – there’s a big difference between building three boutique townhouses on small block and a multi-unit development.
3. Understand the timeline
One of the frustrating things about buying off the plan is waiting for your townhouse to be completed. It can take a year or more from signing the contract to moving into your new home.
There are a few stages to understand with the timeline of any development. The first is the build start date – which is when construction is scheduled to commence. The next is the projected completion date, this is when settlement will occur and you will get the keys to your home. There may be unexpected delays which will push out timelines, but don’t be afraid to ask your real estate agent or the builder for updates along the way.
4. Know your payment milestones
Just as you need to be aware of the construction timeline, it’s also important you’re aware of the payment milestones and your obligations.
In most cases, you’ll pay a 5-10% deposit when you sign the contract to secure your home. You’ll then pay the remaining amount upon settlement. This will usually require you to secure finance from a bank or lender. It’s important to note that finance can take a month or more. So, as your settlement date approaches, ensure you’ve got plenty of time to get your paperwork together and secure approval.
One of the benefits of buying off the plan is the extra time you have to save while you wait for your home to be completed. This can mean taking on a smaller mortgage, reducing your overall payments.
View Bank Homes is a trusted developer with 25 years experience building homes across Melbourne’s northern suburbs. Explore our recent developments in Reservoir, South Morang and Preston, or join our email list to find out about exciting new projects.