Buying a house off-plan is often an unpopular option. It’s widely considered as a complicated and difficult process. Having said this, there are plenty of advantages to be had by this type of property investment. If you’re looking to buy off-plan property, it’s worth getting clued up on the most common pros and cons you’re likely to encounter.
What does buying a house off-plan actually mean?
Buying property off-plan is when you put down a deposit to purchase a property that’s yet to be built or isn’t yet finished. Off-plan properties are considered not yet ready for occupation.
How to buy off-plan property?
If you’re thinking about buying somewhere off-plan, there’s a process you should follow:
- Do your research thoroughly
- Arrange finance well in advance
- Pick your property and pay the reservation fee
- Create a snagging list before exchanging contracts
- Conduct a snagging survey two weeks prior to final completion and check the property for any defects
Advantages of buying off-plan
There are plenty of reasons why people are attracted to off-plan homes. These are some of the most common:
You’ll be the very first owner
No one has lived in the property before you. You’ll be the first owner. If you get in early enough, you can try and negotiate on the interior decor as well as certain fixtures and fittings. You could even have your dream kitchen installed, instead of the developer’s standard issue.
Access to the latest designs and solutions
Developers are keen to show off their skills and knowledge of the industry. Take advantage of their use of the latest designs or space saving solutions. These can be optional extras so do a bit of negotiation. Even if you have to pay, it could still save you money in the future by negating the need to install further storage.
You get the freedom of choice
You quite literally get to choose where your home will be sited. Unlike existing property, where you get what you see, off-plan buying allows you to select which house or apartment you like. You may even get to choose which plot you’d like it built upon. You’ll often have freedom to choose which way your windows face and whether you’ll be on the main thoroughfare or tucked away in a corner. Do you want to be on the ground floor or top floor of an apartment block?
You can ‘flip’ before completion
If you get in early enough, secure a good price and favoured plot, it can sometimes be possible to ‘flip’ (sell) the property before it’s even completed. This kind of speculation can be extremely risky and is not for the faint hearted. Ultimately, we’d strongly advise only paying a deposit if you are prepared and have the means to complete the purchase of the property.
If you want to buy off-plan, the choice can be endless. The earlier you buy in the development scheme, the more options you will have.
Disadvantages of buying off-plan
Don’t be drawn into buying off-plan just yet, there are some genuine drawbacks that put off a lot of buyers.
They can be more expensive
Off-plan properties can be 10-20% more expensive than older equivalents, this is a result of their newness and the fact they’re promoting a particular lifestyle. This means you may not be able to sell the property for what you paid within the first couple of years. This is especially noticeable if it’s a large development and you find yourself competing with new-build properties still being completed.
You’ll only see a show home
All developers typically have a show home for their salespeople to show prospective buyers. Its primary purpose is to show off the developer’s style, yet it’s also there to sell you a lifestyle. It’s their showcase for the development so you can expect it to be fitted out with the highest specification of fixtures and fittings available for the scheme – some of which may be optional extras.
Developers know how to sell the dream
Developers have a few small tricks up their sleeve to help sell the dream. It’s important to have your wits about you and look out for ways these can influence your decision:
- Minimal furniture to enhance the use of space – in particular, look for wardrobes and cupboard space in bedrooms
- Small beds, rather than full size doubles to make the space appear larger than it actually is
- Doors taken off hinges to disguise cramped openings
- Decorations to hide flaws
Space is a premium
There’s usually a significant difference in square footage in comparison to similar older properties. Developers are restricted with space, it’s of a premium and they’ll use it to maximise profit on the scheme.
So, is an off-plan property for you?
So, is buying an off-plan property for you? You can secure a shiny new home with an element of choice. You can have your say on the plot while also giving the décor, kitchen and bathroom your own personal touch. Though this does come at a premium and it’s likely to be a 3-5 year minimum commitment.
Make sure you have good legal advice
Although buying a house off-plan will give you some say over the plot, you should always unearth the legal side with a good solicitor to ensure you move confidently and get the best deal in the process. We work with an approved panel of legal professionals to help with that. Tell us what you need and they will get in touch with you.