Off the plan property settlement - how does it work?
A number of people ask - what is the settlement process when buying off the plan property?
The simple answer is that the process is one part of the off the plan buying journey that isn't too dissimilar to buying in the established market.
The major difference is the time from exchange to settlement, given the off the plan property isn't built yet. The standard settlement for established property is around six to eight weeks.
This however has a number of pros for off the plan buyers.
One of the biggest is that the price paid for the property at the time of exchange doesn't change. Even if the value of the apartment has risen during construction, buyers will still settle on their apartments at the same price agreed.
The settlement date will be forecasted in the contract, as to when the developer believes the building will be complete, and the certificate of occupancy is obtained. Then settlement can start to occur and buyers can move in.
The settlement date forecast is another pro for buyers. While this date can chop and change due to a number of reasons, least of all delays in construction, labour, and materials, it gives the buyer a ballpark future date where they need to have their finances in shape to settle.
By paying a deposit you lock in that price, and you might not be required to pay the rest of the deposit for two or three years, if the construction timeline is that far away. This allows buyers years to save up the rest of the money while their yet-to-be-built property potential grows in value.
The settlement date estimate also puts a time limit on buyers as to when they should either vacate their current rental, or put the wheels in motion to sell their current home.
If you're thinking of purchasing an off the plan apartment, it's a good idea to speak to a conveyancer or solicitor who can advise you on the settlement process and help ensure that everything goes smoothly.
