14 Questions Every Home Buyer Should Ask When Buying Off-The-Plan

There’s no question that buying off-the-plan (OTP) has become an increasingly popular option for home buyers in recent years. Between the appeal of settling into a brand new build, only needing to dish out a 10% down payment, and having to pay little to no stamp duty, it’s no wonder OTP projects have enjoyed such traction. 


But, while there certainly are benefits to be reaped, there are just as many important questions to consider before signing along the dotted line. After all, the off-the-plan process is vastly different to the traditional purchase of an existing home. Think of this article as your handy guide to buying a new home off-the-plan, where we answer the top questions home buyers are asking. 

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Questions To Ask When Buying Off-The-Plan 

1. Can You Negotiate The Design? 

Being able to tweak the design of your OTP build and put your own little twist on the interior style is by no means out of the question. Though just how much input you can have will depend on the terms of the contract. Customising fittings, appliances, fixtures and interior colour schemes could well be on the table. Just have a chat to your developer to find out how much flexibility you have. 

2. Can You Negotiate The Price?

Getting in early in the pre-sale period can really work in your favour. Since developers are  often eager to show the banks that they’ve secured sales during the early stages, this can  mean they’re more amenable to offering you a more affordable purchase price. 

However, getting in early isn’t your only opportunity -  a dedicated property consultant at iBuyNew can help you work through all moments of negotiation that present themselves at different stages of the sales and construction process.

3. What Are The Benefits? 

First home buyers and investors alike can benefit greatly from buying properties off the plan. Government-issued grants for first home buyers can provide a helpful cash injection towards an OTP purchase, while stamp duty concessions on OTP builds can also bolster the overall affordability. Plus, home buyers can enjoy the capital growth that could come with rising house prices during construction. An investor, on the other hand, can also enjoy the ability to access valuable tax concessions by claiming back on the depreciation of the new build. These are just a few of the upsides. 

4. What Are The Risks?

As with just about everything in life, buying off-the-plan does have its potential drawbacks. It could happen that during the construction phase property prices decrease, leaving you with a newly built home that’s worth less than the original purchase price, at least in the short term. Some OTP builds can end up with structural defects, and construction delays could occur to some extent. Like with any real estate purchase, due diligence and research is key to minimising risks. Your conveyancer is the best person to advise you on which clauses are worth incorporating  into your contract with the developer to protect you. But safeguarding your interests isn’t all on you. In NSW, the Building Commissioner has recently added protections for buyers auditing new apartments in residential developments to ensure they are constructed to building code standards. Giving you added peace of mind.

5. How Much Is Strata? 

When buying apartments off-the-plan, strata fees are an inevitable financial outlay that you’ll have to factor into your budget. Fees cover insurance and building maintenance, including the upkeep of common facilities, such as gyms, pools, car parks, fire safety and lifts. Of course, OTP developments with more amenities  will tend to require a higher strata than those without.. However, depending on how concerned you are about resale value or rental return, paying extra for more facilities could be worth your while. 

6. What Are The Rules Around Financing An OTP Build?

If you need to take out a loan to secure your OTP purchase, it’s vital that the contract be subject to you obtaining funding from a lender. Developers typically allow buyers anywhere between 14 to 30 days from signing the contract to secure finance approval. But, it’s also just as important to consider how your financial circumstances will change by the time of settlement. While your financier may have granted you conditional approval in the beginning, if your financial situation declines by the time of completion, you may not be able to borrow as much as you initially thought.

7. What If The Completed Build Is Different From The Original Plan? 

Generally speaking, developers have some liberty when it comes to tweaking the building plans. Often, an OTP contract will allow the developer to make any changes, just so long as those changes don’t detrimentally or substantially affect the buyer. Floor plans are thus open to adjustment (assuming the floor area doesn’t vary by more than 5%), and altering the specifications is totally acceptable (as long as the standard of quality is substantially similar). So, working with a developer with a good reputation is important here. 

8. Whose Help Do I Enlist To Go Over The Contract With Me? 

The contract of sale which you will sign when buying a house, townhouse or apartment off-the-plan is a fair bit different to a normal property contract. Not only does it outline all your obligations with respect to payment and purchase, but it also lists the developer’s obligations. Not to mention it also includes a thorough rundown of precisely what you are buying. With so much important (and legal) information, it’s essential that you seek a lawyer or the legal services of a property law professional, like a conveyancer who specialises in off-the-plan contracts, to review the contract carefully, and double check for any unusual costs or conditions. You’ll want to know what will happen if there are delays or if the project runs out of money.

9. What If There Are Delays?

Like with any new build or renovation, between waiting for council approval, bad weather and stalled shipments of building materials, there are a fair few reasons why OTP projects can be delayed. Usually though, the developer is allowed some wiggle room to push back the estimated project completion date, so long as they are doing all they reasonably can to finish the build as fast as possible. To make sure you’re prepared we recommend sitting down with your lawyer or conveyancer who specialises in OTP property so they can help you understand your options, like defining the terms of the sunset clause (more on that in a moment). 

10. What Is The Sunset Clause?

In a contract, a sunset clause puts a time limit on the contract's validity. If settlement has not occurred by the end date included in the clause, the buyer, builder or developer are legally entitled to walk away from the contract, however the buyer must provide written consent. If this was to happen, the buyer would receive their deposit back in full. For large scale developments, the sunset period typically ranges from 3-6 years, with smaller projects usually sitting between 1-3 years.

11. What Is The Shrinkage Clause?

This is a contractual provision that grants the developer flexibility to vary the size of your OTP property. While you probably won’t be able to eliminate the clause entirely, you can try to set a limit that you’re happy with. Up to a 3% reduction in the overall size, for example, might be manageable. In NSW, for instance, the industry standard allows for a 5% reduction in the overall size. At the same time, you might even get lucky and end up with an apartment that’s slightly bigger than what you were expecting. Again, talking to an OTP legal specialist is the way to go when it comes to navigating these finer points of the contract.

12. Does My Developer Have Insurance?

Ensuring that your developer has arranged for insurance to protect your OTP build means protection for you, as well as peace of mind. This is why the terms of the contract should be crystal clear that construction can only begin once the developer has taken out the adequate cover, and provided you with proof of this cover on an agreed number of days after it being taken out. Circumstances covered by the insurance should include insolvency, bankruptcy, death and disappearance of the developer. 

13. What If There Are Defects? 

You’ve spent months in anticipation, the development is finally complete. 

Prior to the final settlement, you’ll have the opportunity for a pre-inspection of your new OTP property. This allows you and, optionally, an independent building inspector, to access the premises and check for any defects, as well as any significant variations in the contracted inclusions. If defects or other shortcomings are found, your contract should spell out your rights in this scenario. Often, OTP contracts will indicate that it is the responsibility of the developer to fix any issues before the handover takes place. Then, ideally, these should be resolved before you move in.

14. What Is The Search-To-Settlement Process? 

Make no mistake, the steps you have to go through from search to settlement can be a fairly involved and time-consuming process. But for simplicity’s sake, the OTP journey can be broken down into 6 stages: 

  1. Finding an OTP project that’s to your liking

  2. Submitting an expression of interest

  3. Signing the contract and paying the deposit 

  4. Pre-settlement inspection where you can flag any issues or defects 

  5. Finalising your home loan (best to seek approval 6 weeks out from settlement)

  6. Moving on in. 


Whether you're looking for new property development or wanting to purchase an off the plan property, get in touch with iBuyNew and speak to our team of experts on 1800 123 463 to find out how we can help.

Published on 28th of April 2022 by Anthony Lamb
Anthony Lamb
Anthony Lamb


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