Buying a brand spanking new home or apartment is a life-long dream for many Kiwis. Buying new often means buying off the plans -- before the home is built.

There can be some real advantages in signing up before building starts. Bayleys city living manager Matt Shirley says purchasers who buy a unit off the plans before construction work begins benefit from the surety of getting in ahead of the competition.

Properties bought off the plan can often be altered to meet the buyer's needs or wants. Don't like a stainless steel bench? Have a marble one installed anyway.

What's more, buyers get all the mod-con appliances and fixtures without the hassle of choosing and buying them or the cost of a renovation.


Buyers and investors also get to buy now with a small deposit and pay later, says Shirley.

"Generally speaking, the common amount has been 10 per cent deposit with the remainder payable at the completion of the project."

In some cases the value of the property can rise by the time the buyer pays in full.

Shirley says that as with any property transaction it is imperative potential buyers seek their own legal and financial advice before signing the contract.

In the case of financial advice mortgage rules could change between the time when the deposit is paid and settlement needed.

To be safe it's a really good idea to use a mortgage broker who will understand the banks' rules and any potential fish-hooks that could arise as a result of a change of policies at the lender or by the Reserve Bank of New Zealand.

It's a very good idea to check the developer's pedigree and track record, says Barfoot & Thompson's projects manager Matt Baird. You're backing the developer with a lot of money and you need to know the development will be completed in a timely manner to the standard outlined in the sales brochure and/or show home.

It's also a good idea to visit owners in the developer's previous projects. Find out how well the experience went for them and if the building has stood the test of time.


Baird says to consider whether the project is being built to minimum standards or if the developer is going above and beyond basic legal requirements. Find out whether the soundproofing exceeds the minimum required by law, if the outlook is going to give you plenty of natural light and if the size and layout is as big as you're expecting.

And what are the security and safety features in the block such as sprinklers, fire escapes and extinguishers?

"Make sure the developer isn't cutting corners," says Baird.

Beware as well of show homes that use illusions to make units appear bigger and better than they are. Show homes are often dressed using undersized furniture to make rooms appear larger and the doors are removed so they don't get in the way.

Clever lighting effects cover poor natural light, and thick carpets and curtains mask noise, but may not be suitable to live with.

The process of buying off the plans is different to an ordinary home purchase and buyers really need to understand the agreement they're signing, says Tina Hwang of Queen City Law. The contracts are often prepared by the developer's solicitors and the clauses differ from the NZLS/REINZ contract.


Be aware of the deposit payment dates, says Hwang, and find out if the developer has access to the deposit prior to settlement, because this carries risks.

Check the "sunset clause" which gives you a way out if the project stalls or is delayed. And be aware of the "material differences clause", which can allow developers to make changes to proposed floor plans and car park plans, says Hwang.

Other small print clauses in the agreement to watch out for include:

The "specifications list" that allows for the substitution of items that are not always like for like.

"Cancellation" clauses, which limit buyers' bargaining power.

The "defects liability period" that restricts the time in which buyers can hold builders accountable for defects.


"Staged development controls", which give buyers the right to cancel if conditions aren't satisfied within a certain timeframe. That could include obtaining resource consent, starting works on the floors, the roof and so on.

Finally, always do your due diligence on the body corporate before buying, says Baird. Check that the annual body corporate fees are affordable and will cover all expected maintenance.