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What is buying off the plan?
August, 2008 
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This is where an estate agency or development company offers property for sale that is yet to be completed or has not yet commenced construction. Increasingly, large residential developments are being offered for sale before completion. Buying off the plan represents unique challenges for the conveyancing process as a multitude of different considerations are required to be taken into account.

Buying off the plan can be a very risky venture and when considering buying a property of this sort you should be aware of the following risks relating to price after completion, changes to construction and management contracts:

• Is the selling price fair? You have little way of knowing what the selling price will be after the completion of the property. While some consumers find they have a completed unit that has a market price higher than that which they paid for it, often the opposite is true. Remember, market prices for real estate fluctuate greatly;
• Can they change the plans? Yes, changes to building plans often have to made during the construction process. Often the completed building will be quite different to that originally conceived. This may have an effect on the desirability of the property and the price compared with the original estimate if the building is not substantially the same as the original plan;
• Quality of construction. The purchaser has no guarantee that the property will be constructed to a certain level of quality. Indeed, the purchaser has little idea of what the standard of fixtures and fittings will be after the property has been completed. A variable quality in these fixtures and fittings may have a detrimental effect on the value of the property after completion; and
• Management contracts. Often the developers will enter into contracts for the management of the property for after completion. These contracts may not be in the best interests of the property's value or utility and may be difficult for the owner's corporation or body corporate to overturn or change.

Generally, buying off the plan is very risky as the final product may not be as it was originally imaged. Financially, while buying off the plan may lead to the securing of a property for less than its worth when completed. However, the reverse may often be true and a buyer may buy an unfinished home or unit that turns out to be worth less than the original asking price.
 
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