Buying off-plan property: 10 checks before you pay a deposit
Buying off-plan means paying for a home before it's built, usually in instalments, in return for a lower price or an easy payment plan. The main risks are delays, a finished product that doesn't match the brochure, and being unable to sell or rent it at the price you expected. These 10 checks cut most of that risk.
Recommended resource: for the full step-by-step method, Real Estate: Everything You Need to Know by Manthan Bhendkar (founder of Asendify) covers this in depth. PDF, £1450.00, instant download.
This is general information, not legal or financial advice. Rules differ by country and change; check with the official regulator and a qualified lawyer before you sign.
1. The developer's delivery record
Look up their completed projects, not their renders. Were they handed over on time? Visit one if you can and talk to owners.
2. The project is registered with the regulator
Most markets require off-plan projects to be registered (for example, with the Land Department or RERA authority in Dubai, or the state RERA in India). Get the registration number and check it on the regulator's own website.
Everything You Need to Know. £1450.00 one-time, instant download.
3. Your money goes into escrow
Your payments should go into a project escrow account, released to the developer as construction progresses, not into the developer's general account. Pay only into the escrow account named in the contract.
4. The payment plan vs construction
Map each instalment against a construction milestone. Plans that take most of the money before the building is substantially complete put more of the risk on you.
5. The handover date and delay terms
What happens if it's late? Look for a clear handover date, a grace period, and what you're entitled to if it slips beyond that.
6. What exactly you're buying
Floor plan, size (and how it's measured), finishes, parking, view. Anything the salesperson promises that isn't in the contract doesn't exist.
7. Service charges after handover
Ask for the expected annual service charge per square foot or square metre. It can turn a good-looking yield into a poor one.
8. The real rent and resale value
Check current rents and resale prices for finished units nearby, from listings and official transaction data where available. Don't rely on the developer's projected yield.
9. Your exit options
Can you sell before handover (assignment)? What fees and conditions apply? Many buyers plan to "flip" and find resale is slow or restricted until a percentage is paid.
10. The total cost, not the price
Add registration or transfer fees, agent fees, any off-plan registration charges, mortgage costs at handover, furnishing, and service charges. Then run the yield and the rent-vs-buy numbers on that total.
Red flags
- Pressure to pay a "booking fee" today, in cash or to a personal account.
- No registration number, or one you can't verify on the regulator's site.
- Guaranteed returns that sound too good, with no detail on who guarantees them.
- A contract that only exists in a language you can't read and no time to have it checked.
The complete off-plan section, plus due diligence, valuation and the buying process for the UK, US, India and Dubai, is in Real Estate: Everything You Need to Know.
FAQ
Is off-plan cheaper than ready property?
Often the headline price is lower, but you carry construction and delay risk and wait years for rent. Compare the total cost and the time your money is tied up.
Can I get a mortgage for off-plan?
Usually the bank lends at or near handover, and some developers offer their own payment plans before that. Check whether you'll qualify for the remaining amount at handover.
What if the developer goes bust?
Escrow and project registration are the main protections in markets that require them. That's why checks 2 and 3 come first.
More playbooks on other topics: https://www.asendify.co/books/
Everything You Need to Know. £1450.00 one-time, instant download.