To buy an off-plan property has made a huge comeback over the years. It means investing in a home or a property which is undergoing development. Buyers consider a room for bargain whereas builders mitigate risks by selling early.
For those eyeing for a new and hassle-free home, investing in an off-plan is a perfect option. The deal allows purchasers to jab more or less 10 percent deposit as a security followed by installments. Within the time, the value of investment catapults substantially whereas delayed payment responsibilities mark off-plan properties an ideal purchase for first-time buyers.
Investors also get plenty of time to save and arrange a mortgage. But how to prepare for the purchase! Check the details outlined below;
Consult a financial advisor
Depending on the lender you’ve come across, getting a mortgage offer on off-plan properties isn’t possible until six months prior completion. An expert financial advisor would surely give you a head start on the amount that can be borrowed and when to initiate the formal application process. Always consult a financial advisor thereby ensuring mortgage when the actual time comes.
Determine the goals
In order to make a profitable investment, always determine the goals or aims. For instance, are you planning to live in the property once completed or is it just an investment! In case it’s just an investment, would you expect a solid rental yield, capital growth in the long-run or both! Brainstorm on all the factors before plunging into the deal.
Development & selection
Urbanization and the rise of Millennials triggered the swift development of off-plan properties across the world but not all projects are profitable or even pose a habitable environment. Carefully probe different developments, perform a general SWOT (Strength, Weakness, Opportunity & Threat) analysis so that you’re all prepared to take an informed decision. Focus on price and location as both go alongside each other.
Pay the deposit
Once negotiated and settled on the price, you’re liable to pay reservation deposit after which property listing would go off the market as you’ll become the purchaser/buyer. You’ll also need filling out a reservation form and book a lawyer.
Just in case there isn’t a professional solicitor available, an individual with basic to in-depth knowledge of the real estate process is good to go with. You’ll need someone to make you understand the contract details so as to proceed smoothly.
The exchange procedure
The exchange process is executed by the solicitor which takes more or less four weeks to complete so you should exercise patience. You’ll be asked to pay 10 percent of the original purchase price excluding the reservation fee that’s already paid. Further installments may take place depending on the development of the property.
Wait & watch
In the meantime, all you can do is lay back, relax and watch the development as it proceeds. Although the developer would keep you updated at all times, you should be vigilant and active enough to query from time-to-time.
Sort the mortgages
After the exchange takes place, check with the financial advisor over the initiation of mortgage application process. While the time period may vary from a developer to another and scope of the project, it usually takes six months prior to the completion.
Once development for off-plan properties reaches its final stage, a completion notice would be dispatched to you more or less two weeks in advance. The notice would also contain details as to formalities you need to fulfill while rest of the process would be managed best by the solicitor and the mortgage company. Keys to the home or property papers would be given on the day of completion.
Benefits of off-plan properties
A number of savvy investors are appealed to off-plan developments for a number of reasons such as;
- The luxury of living in a new property
- Minimal or simply zero cost on repairs and redecoration
- Buyers get to select fixtures and fittings per their liking
With the above details, you’re all set to grasp a successful off-plan development purchase deal.