Usually, homebuyers would check out properties listed for sale, make a shortlist of suitable properties and schedule a visit. Once satisfied with a handful of the properties within the shortlist, homebuyers would indulge in serious assessments and then the formalities of the purchase. It is similar for real estate investors as well. Beyond this norm exists a practice which is known as ‘buy off the plan’.
So what does it mean to buy ‘off-plan’?
When you, either as a homebuyer or as an investor check out a property, it is almost always finished. People check out completed properties that are approved for occupancy and are then listed for sale. There can be property inspections, mortgage preapprovals and lengthy negotiations. The investors or homebuyers may want to upgrade the property a little or make substantial changes while adhering to building codes after moving in. But the property is essentially finished and one can move in if all formalities are completed.
A ‘buying off the plan’ property pertains to an unfinished property. The piece of real estate is in the developmental phase. It could be just a lot of land with an approved plan. It may only have the foundation and perhaps a perimeter fence. It may have one storey and the stairs may be in the construction phase. The property can be in any phase but it is not completed. In most cases, the property is substantially short of completion.
Pros and Cons of ‘buying off plan’
The most notable advantage of buying off the plan is the cost. Finished or completely developed properties that are ready for occupancy will always cost much more than buying off plan properties. You can make changes to a plan as the property is in a phase of development. You can tweak the construction standards or upgrade the kind of fixtures being used for furnishing. Buying off plan can save you money and put you in control.
There is the risk of fluctuating deadlines and you may have some developments that are not to your liking. These can be easily managed, overcome and also proactively averted if you have a reliable, experienced and resourceful real estate agent by your side.