How to Buy Off the Plan: Our Comprehensive Beginners Guide

Buying off the plan can be a great way to get into the property market, but it can also be a daunting prospect. As an experienced Australian mortgage broker, we at Ello Lending understand the complexities of the process and want to help you make the right decisions. In this comprehensive guide, we’ll take you through the process step-by-step, so you can make an informed decision about whether buying off the plan is right for you.

What is Buying Off the Plan?

Buying off the plan is when you purchase a property before it is built. You’ll usually sign a contract with the developer, who will then build the property and transfer it to you once it’s complete. It’s a popular option for first home buyers, as it can be a more affordable way to get into the property market.

The Benefits of Buying Off the Plan

There are a number of benefits to buying off the plan. Firstly, you can often get a better price than if you were buying an existing property. This is because developers are often willing to offer discounts to encourage buyers to purchase off the plan.

Secondly, you can often get a better loan-to-value ratio (LVR) when buying off the plan. This means that you can borrow more money from the bank, which can help you get into the property market sooner.

Finally, you can often get a better return on your investment when buying off the plan. This is because the value of the property is likely to increase once it’s built, so you can potentially make a profit when you sell it.

The Risks of Buying Off the Plan

While there are many benefits to buying off the plan, there are also some risks that you should be aware of. Firstly, the property may not be built to the standard that you were expecting. This could mean that the property is not worth as much as you thought it would be, or that it needs more repairs than you anticipated.

Secondly, the developer may not complete the project on time. This could mean that you have to wait longer than expected to move into the property, or that you have to pay more in interest on your loan.

Finally, the property market may change in the time between when you sign the contract and when the property is built. This could mean that the property is worth less than you expected when it is completed, or that you can’t get a loan with a good interest rate.

How to Buy Off the Plan

If you’ve decided that buying off the plan is right for you, there are a few
steps you should take to ensure that you make a smart investment.

Firstly, you should do your research. Make sure you understand the local
property market, and that you’re aware of any potential risks associated with buying off the plan.

Secondly, you should speak to a mortgage broker. They can help you understand the loan options available to you, and can help you find the best loan for your needs.

Thirdly, you should speak to a solicitor. They can help you understand the
contract that you’ll be signing, and can ensure that you’re protected in the
event of any issues.

Finally, you should speak to the developer. Make sure you understand the
timeline for the project, and that you’re comfortable with the quality of the
property that will be built.

At Ello Lending, we understand that buying off the plan can be a complex
process. We’re here to help you make the right decisions and get the best loan for your needs. If you have any questions about buying off the plan, or if you’d like to discuss your loan options, please don’t hesitate to get in touch. We’d love to help you get into the property market.