Over the years, many individuals have asked whether it is a wise idea to buy a new-build before it is finished. While some people think there is no harm in doing that, others feel it is much better to buy after the property is ready to move in. If you are about to buy a recent home, you might have the same question.
Without getting too technical, yes, it is possible to buy a new-build before it is finished. Generally, this type of purchase is known as purchase off-plan.
If you decide to go this route, there are several questions to ask yourself beforehand. What are your current circumstances? Have you researched the builder? Are you informed about the current property market?
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Is It Beneficial To Purchase A New Build Before It’s Completed?
There can be numerous reasons for you to purchase off-plan. We all know how expensive properties can be. When they are complete, they may cost you a fortune to purchase. But if you buy during an off-plan, you can save lump sum money. This is an affordable method to purchase your preferred home without any worries.
Another great benefit of purchasing a property off-plan is that you can buy it and lock in the lower price at the time that you purchased it. So, if you buy off-plan, the property is not ready. That is why it may be affordable. But once you move in and the property is all set, its value will increase exponentially. This means that you now have a home that is worth more than when you first bought it. That is some excellent news!
Among most other benefits, you can also have a say on the finishing touches of your home and the flooring you prefer. For instance, if you want laminate floors in the house, you can request them. Apart from this, you can also decide on the renovation and redecoration of the place as per your likes. On the whole, this investment will allow you to add personalized features when the house is being constructed rather than adding additional features in an already-built house.
Risks Of Purchasing A New Build Off-Plan
Undoubtedly, there are some significant benefits of purchasing a new build off-plan. However, one must also focus on the downsides to measure their convenience more appropriately in the long run. One of the main problems is that your move-in date is likely to be postponed if the construction is delayed. If you are looking to move quickly, this could be quite a concern for you.
Another major problem here is that access to mortgages is quite limited. So if the property that you are planning to buy hasn’t been built yet, the developer may start taking legal action. This may also occur in the case of a falling mortgage where you have to back out.
Among all other risks, it gets even worse if a sudden slump in the housing market may indicate that you are left with negative equity with no house to move into. That is why we advise you to measure these significant risks before you wish to purchase a new off-plan. You can also speak to a few experts to take the proper steps when in need. This will help you out exponentially in making the right decision on time.
What Are The Problems With Buying Off-plan?
Now, you can buy a property off-plan because it feels like the more convenient option. But at this point, you must understand the legalities and ensure that you are guarded against any risks. Also, do not forget to get the ownership of the property under your name. It would help if you did this as soon as the home is ready. It is likely to bring numerous benefits to you.
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Tips For Selecting The Right Build Off-Plan
Be Aware Of The Neighborhood
If you are interested in a pre-construction project, visit the home site. It will allow you to inspect the neighborhood you may be interested in in the future. You can assess how far away your potential home is located from facilities like shopping centers, parks, schools, etc.
Read Through The Purchase Agreement Prior To Signing
It is among the most important documents that legally binds you and the vendor. Therefore, you must read the agreement thoroughly and understand it. You can elicit the assistance of a lawyer who will help you comprehend every detail included in the document.
What Does Your Warranty Cover?
The new home warranty and protection plan implies that all new homes in Ontario must have a warranty. The coverage is divided into one-year, two-year, and seven-year periods. It is imperative that you understand the types of issues that are covered in each warranty period.
Before possession, take time to walk through the house with the builder to ensure that nothing is incomplete, damaged, or missing. You should take the checklist provided by the builder so that you have an idea of the entire model.