Things to Consider Before Buying An Off-The-Plan Home

Buying a home under construction can feel exciting,  everything new, tailored finishes, and the chance to move into your dream home. Builders and developers will often paint a rosy picture, but behind the polished brochures and display homes lie risks that many buyers don’t find out about until it’s too late.

Before you commit, here are 7 costly mistakes you must avoid when buying a home under construction:

1. Trusting Verbal Promises Over Written Contracts

Builders might assure you that certain finishes, upgrades, or features are “included” but unless it’s clearly written into the contract, it means nothing. Verbal promises are not legally enforceable.

Buyer tip: Always insist that every promise, even small ones, are detailed in the written contract before you sign. If it’s not in writing, don’t count on it.

2. Overlooking the Fine Print on Variations and Extras

In many contracts for buying a home under construction, builders reserve the right to make “minor variations” and what’s considered “minor” can be surprisingly major (e.g., changing the layout, materials, or fixtures). Worse, many contracts allow them to charge extra for “unforeseen costs.”

Buyer tip: Carefully review the variation clauses and understand what rights the builder has to alter or increase costs. Negotiate limits on these rights if possible.

3. Assuming Completion Dates Are Set in Stone

When buying a home under construction, delays are common. Weather, material shortages, labour issues, or council approvals can push your move-in date back by months, sometimes years. Contracts often allow builders considerable leeway on timing.

Buyer tip: Check the clauses on completion timeframes. Ask about penalties if the builder fails to deliver on time and be prepared with a backup plan for accommodation if delays occur.

4. Not Understanding Progress Payment Traps

Most buying a home under construction contracts require progress payments at different build stages. But paying too much upfront, or paying before work is genuinely completed, can leave you financially exposed if the builder goes bankrupt or abandons the project.

Buyer tip: Structure payments tightly aligned with construction milestones and get independent inspections before releasing payments.

5. Ignoring the Risk of Builder Insolvency

Builders can and do collapse mid-project, leaving buyers stuck with unfinished homes and messy legal battles. When you’re buying a home under construction, you’re exposed until the keys are handed over  and even insurance won’t always cover everything.

Buyer tip: Choose a reputable, financially stable builder. Ask for proof of completion insurance (often called Home Warranty Insurance) and make sure it’s in place before paying deposits.

6. Accepting Incomplete or Rushed Work at Handover

Near completion, builders often rush to finish projects to secure final payment. As a result, workmanship can be poor, and defects may be overlooked. Without proper inspection, you could inherit serious issues that cost thousands to fix later.

Buyer tip: Never skip a final, independent building inspection before accepting handover. Create a defects list and insist the builder remedies all issues before final payment.

7. Failing to Plan for Hidden Costs

Buying a home under construction doesn’t always include everything you need to move in. You may have to budget separately for:

• Landscaping

• Fencing

• Driveways

• Window coverings

• Upgrades not included in the standard package

These hidden costs can easily add tens of thousands to your original budget.

Buyer tip: Clarify exactly what’s included — and what’s not — early on. Get a full list of inclusions and prepare a realistic post-settlement budget.

There are many positives to purchasing an Off-The-Plan (OTP) property. Firstly, new builds are usually eligible for special government grants, such as HomeBuilder and the Queensland First Home Owner’s Grant that have been implemented to support the construction industry and first home buyers. Buying OTP also offers you the luxury of time if you need it. Once the deposit is paid you won’t need to start paying your mortgage until the building is complete, so if you are not quite ready to move out, you can have months, to save more money before settlement.

With these benefits does come risks, however, so it is prudent to ask lots of questions before committing to an OTP purchase. We have compiled some of the most vital questions to ask when buying off the plan.

What should I ask my lender?

The bank or lender that you plan to borrow from may have special policies that apply strictly to purchasers of OTP properties. As a borrower, it is important that you know where you stand so you should ensure you ask your lender the following:

• Will the bank lend to me without a valuation? i.e. will the bank lend without seeing the property, on a valuation based purely on the contract?
• Will I even be able to apply for finance prior to the commencement of the build? If not, at which point will I be able to apply for finance?

What should I ask my solicitor or conveyancer?

Your solicitor or conveyancer will be able to answer all the legal questions you may have about the purchase of an off-the-plan property. Different rules apply to OTP purchases, so be sure to seek clarity on the below before you sign the Contract of Sale.

The most common questions about OTP purchases you will need to ask are:

• What are the penalties, if any, for rescinding the contract?
• Does the contract have a “sunset clause”? A sunset clause is a date by which the project must be completed. If it is not finished by this date you are within your rights to cancel the contract and have your money returned or enter into a new one with the developer.
• Is there a cooling-off period in which I am allowed to withdraw from the contract? If so, how long is that period, and will I be required to forfeit some or all of my deposit if I do so?
• Is the developer allowed to delay settlement if the project isn’t completed in time?

What should I ask the property developer?

Some of the most important questions will need to be directed to the property developer. After all, they are the ones with the most visibility and control over the construction of the property. Some crucial questions include:

• How long will construction of the property take?
• Have the developers accounted for flexibility around the completion date? i.e. is it going to take far longer than planned to complete the build?
• Can I make changes to the proposed finishes and fixtures prior to completion?
• What is the process for having building defects rectified at the builder’s expense?
• How close are the developers to receiving development approval based on the number of properties sold?

If you have purchased or are considering purchasing an OTP property and need advice on the conveyancing process, contact our conveyancing team today.