Frequently Asked Questions
Buying Off The Plan
Buying properties off-the-plan can be quite intimidating especially if you haven’t purchased a property before. The Carpe team has a wealth of experience in off-the-plan apartments and a proven track record of delivering quality developments on time for some of Australia’s leading developers. Below, we have answered some of your frequently asked questions about the process and the great benefits of buying off-the-plan.
What does buying off-the-plan mean?
Buying off-the-plan essentially means that you are purchasing a property that has been designed and planned, but has not been built when the contract of sale is signed.
What benefits do I get from buying off-the-plan?
There are plenty of perks when you buy off-the-plan properties:
- You are purchasing at today’s prices. This could mean that you may own a property that is worth more than what you’ve paid for it once the construction is completed, depending on market movements. Off-the-plan properties are usually priced lower prior to construction. Getting in early means that you don’t have to worry about any upsurge in the price rates as the development takes shape and demand increases.
- Quality insurance – a well-built new home also means that there is seldom a need for expensive ongoing maintenance or repairs for several years or longer. Finally, the Australian Building Code ensures that new properties abide by strict energy efficiency requirements. This generally means low energy bills.
- Flexibility – you have the ability to make changes and customise your property to your liking. This may also be cost neutral depending on the extent of the changes. In new home purchases that are not off-the-plan, the buyer would be responsible for the additional costs of the requested changes or upgrades.
- You may be eligible for depreciation benefits such as substantial tax deductions, if you’re buying an off-the-plan property as an investor.
- If you are relocating or downsizing from your family home, you have time to plan your move and organise the sale of your old home.
How much is the deposit to secure the property?
An initial 10% deposit is needed in order to secure the property. No additional payments will be necessary until you pay the balance of the purchase price at settlement. The initial deposit can be paid via cash or bank guarantee. If it is paid in cash these funds are invested into a term deposit and the interest accrued is then reimbursed at settlement.
What is the sunset clause?
The sunset clause in a contract serves to protect both the vendor and the purchaser. This provision is one of the requirements in the lending policy, usually stipulated by the project financier. Also known as the registration period, it pertains to the duration of time wherein the seller and the buyer are both bound to the contract of sale. This period commonly lasts from 36 to 48 months, which is normally longer than the length of sales and construction.
Is there a period of time where the developer is obliged to fix any issues in the property after settlement?
Your developer is obliged to fix major issues before the settlement date. In the event that there are further defects in the property after settlement, you will be given 3 months to report the issues so that they may fixed in a prompt manner.
How much are the levies or strata fees and what do they cover?
These quarterly fees are determined by your corporate manager. They generally include, but are not limited to; contributions to public liability insurance, building insurance, building maintenance, and the ongoing maintenance of communal areas in your building i.e. lobby cleaning.
What is included in the property?
A comprehensive list of inclusions in the property is discussed in the contract of sale and is available in “The Finishes & Specifications Schedule”. We recommend reviewing the details carefully before committing to the contract. Please note that items such as blinds, curtains, and other similar items, are not usually part of the inclusions unless specifically stated in the contract.
How accurate are the marketing collateral and renders of the property?
At Carpe, we strive to give you a real sense of what the property will look like once it is finished. In order to do this, we provide all the necessary information for you to make the right decision through our marketing material and renders. We also provide the finishes & specifications schedule in the contract of sale. We note that the images shown in the marketing collateral and renders are only indicative of the completed property.
Can I have a copy of the floor plan?
Yes, the floor plan is provided. A member of the Carpe team can take you through the floor plan in detail. This will allow you to evaluate the room measurements and inclusions. This guarantees that your off-the-plan purchase is suitable to your requirements and preferences. Don’t hesitate to ask the Carpe team for any questions regarding the floor plan.
When should I secure my finances?
We strongly advise that you consider your financial requirements and discuss them with your lender, before you commit to any contract of sale for an off-the-plan home. This ensures you will be able to secure your financing at closing. Consult with your lender again 3 to 6 months before the projected completion of the property, in order to guarantee their assistance when it comes to meeting your commitments.
What does “cooling off period” mean?
The “cooling off period” refers to the time period following an off-the-plan purchase wherein the buyer is given the ability to cancel the contract of sale without losing the deposit. Specifically, this is 3 business days from contract signature and expires at midnight on the last day. Please be aware that 0.2% of the purchase price may still be forfeited should you wish to withdraw from the contract.
What is the process involved in the final settlement?
You can expect regular project updates from our team throughout the construction of your new property. It is advisable to have your financing and final payment already prepared in order to avoid any delays. The developer will schedule a final inspection and final settlement is due upon inspection completion and approval.
Carpe will ensure that you remain completely informed throughout the construction process. Don’t hesitate to ask the Carpe team if you have any questions in relation to the settlement process and time frames.
What is the legal process of buying off-the-plan?
It is our recommendation that you seek independent legal advice from a legal adviser or solicitor in order for you to be fully informed about the legal process of buying an off-the-plan property.