Steps to buying off plan

Buying off plan is exciting but make sure you do your homework. The first thing to note is that even like-for-like properties on the same development will not necessarily come with the same price tag. Generally the earlier you pitch up, the better deals available and, of course, the greater the choice.

You’ll need to be sure exactly what the price includes – for example, light fittings, carpets, white goods and even garden turf. If there is no driveway on the plot or you are buying off plan in an apartment block, does the price include a parking space? You will also need to find out about charges for any management services and ongoing annual service charges.

Steps to buying off plan

Once you have found the off plan home you want at a price you are happy with, you will need to do the following:

  1. 1. Pay the reservation fee: To secure a plot with a developer you will have to pay a reservation fee (typically between £500 and £1,000). You have the right to pull out of the sale at any time during the ‘reservation period’ (which ends when you exchange contracts) and have the fee refunded minus any reasonable administration costs incurred by the builder.
  2. Exchange contracts: Referred to as Contract of Sale, this is when you pay your deposit and it’s also when the purchase becomes legally binding. A completion date will be included in the Contract of Sale. When buying off plan, an ‘unreasonable’ delay is usually defined as no longer than six months for a house and no longer than 12 months for an apartment – both from the completion date stated in the Contract of Sale.
  3. Complete: The property build is finished, the balance is paid to the developer and you complete, get the keys and move in.

Please note, if you require a mortgage many mortgage agreements last for a maximum of six months – and some agreements are as short as three months. So if you exchange contracts and your home is completed later than the date agreed in the Contract of Sale (even the original date), you may have to reapply for the same mortgage.

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