In our previous article, we briefly described the advantages and disadvantages of purchasing off-plan properties. Now that you are aware of the good and the bad, you have weighed your options and have decided to purchase an off-plan property.
How do you go about it?
1. Do your own market research
Are you getting the best purchase price that will give you a high return on your investment? the best way to figure this out is to look at the location of the property, is it a conducive place where one can rent out the property, are the surrounding properties of high value or is there a likelihood of property prices going up and is there good infrastructure in the area?
2. Find out the developers track record
Does the developer have a proven track record, have they developed other properties? how long did it take to complete previous projects? do they ensure that their properties have high quality finishes? Is the developer trustworthy and transparent in how they handle finances allocated to the development? Do they frequently update their clients on the progress of the development?
3. Inspect the architectural and building plans
This is crucial before entering into the agreement to purchase as it will give you an idea of how the property will look like once completed, ensuring that the developer has a good track record as explained above will also reassure you of the quality of works to be carried out. Do a site visit and if the developer has a show house, even better for you as it will give you a complete picture of what the finished property will look like. Further, you can also have your architect go through the plans and advise you on the same.
4. Conduct due diligence
Finding out who the developer is and if they own the parcel of land where the property will be constructed is important. It will be useful to know such factors like if the developer has taken out a loan from the bank to finance construction or if the land is owned by a third party. Also find out if the developer has obtained all the necessary approvals from the relevant authorities i.e., NEMA and the County Government.
5. Thoroughly review the offer letter and contract
This will define and spell out the terms of sale, the payment plan, the completion date and other obligations between the developer and yourself. If the contract is too rigid and places you at a disadvantage, having professional assistance in reviewing your contract will help you in understanding and negotiating better contract terms.
6. Prepare Financially
Having a proper financial plan while purchasing the property will save you from making late payments and incurring additional costs due to penalties for late payments. In the event that you are being financed by a bank, plan accordingly as there are other additional costs involved in the financing process.
7. Lastly, Consult Other Professionals
Dispel all doubt by ensuring you consult other professionals for expert advice about the project. For instance, a valuer’ advice will ensure that you are not being overcharged on the value of the property and contractors will advise if the developer’s promises/ plans are realistic.
Many people have been discouraged from purchasing off-plan properties due to other failed developments that have seen numerous purchasers lose a lot of money but with proper planning, research and expert consultation you can comfortably purchase your off-plan property with no hustle.
Please feel free to contact MCCK Advocates LLP for any clarification, questions or advice concerning this article and any Conveyancing and Real Estate matters at email@example.com
This article is issued for general information only and should not be relied upon without seeking specific subject matter legal advice.