Monday, March 3, 2014
The real estate market offers many options for home buyers. One option that has been constantly offered by housing developers, from condominium developments to community and subdivision developments, is buying off plan.
Buying off plan entails signing a contract and buying a property, whether a condo or a house, before it’s built. Your purchase would be primarily based on seeing the developer’s building plans and designs for the condo or house and the community’s features and amenities. Other terms used to describe this home buying option are pre-selling and pre-construction.
Buying off plan provides several benefits, the most significant of which is a considerably lower price compared to buying a completed house or condo. However, there are also some risks and disadvantages to this option.
Pre-sale contracts and even pre-selling development advertisements often have terms in the fine print, such as, 'subject to change without prior notice.' When buying off plan, you run the risk of ending up with a home that is not quite what you signed up for in the first place. Unit sizes and floor plans may vary, and material specifications and finishes may change. If these home features are central to your decision in buying the pre-selling property, this may not be the best option for you. That six-lane pool you’re excited about may actually become smaller in reality, as changes in development amenities and features may also occur.
Another risk home buyers should be aware of is the possibility of delays. While developers advertise a project turnover date for condos and houses, this is not always followed to the letter. The construction process may take unexpected detours and delays, due to different reasons. Developers may lack funds to continue the project, or worse, declare bankruptcy. It’s important to assess the pre-sale contract carefully to know what you’re getting into.
Buying off plan can be a worthwhile real estate investment, however, you should also be wary of the risksinvolved. Consider different options and read the fine print before you commit to a pre-sale contract.