Do you need an inspection on a new build?
It sounds odd, but yes — an independent inspection on a brand-new home is increasingly worth it. Inspectors can pick up defects or build-quality issues that you’d never spot in a shiny show home walkthrough.
Warranties can help, but they’re not a replacement for doing your homework:
- Third-party warranties (Master Builders, Halo, Stamford etc.) can be a backstop, but they’re typically geared towards major issues rather than every “finish quality” problem.
- The builder matters more than the warranty. Check the developer/builder history, how long they’ve been around, and whether they stand by their work once the last unit is sold.
Why you need a sunset clause
Buying off the plans can be a great way to lock in a new home, but it needs a bit more planning than people expect. Bank approvals have expiry dates, and while some lenders may extend an approval for a new build, it is not guaranteed.
That’s where a sunset clause matters. It puts a firm “finish by” date in the contract, so you can cancel and get your deposit back if the development isn’t completed by that date. The smart move is to align the sunset date with your expected finance expiry window.
The true cost of failing to settle
A common assumption is: “Worst case, I lose my 5–10% deposit.”
In reality, the downside can be much bigger.
If you can’t settle, the developer can on-sell the property. If it sells for less than your agreed price, you could be pursued for the shortfall (plus other costs depending on the contract). Example: you agree to buy at $1,000,000, it resells for $800,000 — you could be looking at a $200,000 liability with no property to show for it.
A couple of practical protections to discuss with your lawyer/adviser:
- Deposit safety: don’t assume the deposit automatically stays protected. Some agreements allow the seller to access the deposit after the contract goes unconditional, so it’s worth negotiating for the deposit to be held by your lawyer (ideally interest-bearing).
- Personal resilience: if you’re stretching to make the numbers work, think about what happens if income drops. Income protection can help in some situations, but the detail matters (especially around redundancy definitions and stand-down periods), so get proper advice before relying on it.
