Buying off the plan can be an exciting proposal, it has many benefits which can be capitalised on if purchasing correctly and with enough due diligence
put into practice, however, every rose has its thorns, and it is important to be aware of the risks that can be associated to this method of purchasing
property.

Risks

The cautious buyer will understand first, the risks associated with a particular decision, in order to ensure they don’t make hasty decisions based
on blind optimism. When buying a property off the plan there is usually a long settlement period which really just lengthens the opportunity for
change to set in between committing to a
property and having to come up with the balance of the funds. In some cases, this can be up to a year, or even years.

Within this timeframe you can face some of the following:

  • Market fluctuations (with the fact we’re talking about risks, assume this trended downward)
  • Property doesn’t come out as you had hoped
  • Your finance is compromised due to changes in circumstances
  • The build itself takes longer than expected (more time = more opportunity for your circumstances to change)
  • The developer falls over

Aside from the above emotional points relating to the actual building not meeting expectations, finance seems to be a key similarity between the remaining
points. In many
cases, finance will be difficult to secure for a long-settlement of a year or more. If your circumstances change within this period, while
you may have been approved for the usual pre-approval period by your bank initially (usually 30-90 days) it doesn’t guarantee your approval will
be honoured in the future. Your position could change for...