Purchasing a property that is still in the planning or construction phase is a viable option, and it is totally safe and secure as long as you take all the necessary precautions. Many buyers are drawn to off-plan purchases for the lower entry prices, flexible payment plans, and the potential for strong capital appreciation by the time the project completes.
However, without the right due diligence, those same advantages can quickly become liabilities – delayed handovers, specification changes, and unprotected deposits are all risks that uninformed buyers have faced. Here we explain what they are.
Verify The Escrow Arrangement Before Anything Else
The most crucial step for you to take before you sign anything is to ensure that the buyer’s money goes into an escrow account – a third-party, government-regulated account that is project-specific. If the money is not going into an escrow account, then the next best thing to look for is a bank guarantee (a heavyweight bank agrees to pay you if things go wrong with the developer). The bank guarantee isn’t as good as escrow, but it’s the next best level of protection.
The purpose of the escrow account is clear, detailed in the contract you sign, and inescapable by either party: The developer can draw down money for the construction only when the construction has been independently verified as having reached agreed-upon milestones. It’s perfectly okay for the developer to put in some seed funding to begin the project, but your money needs to be protected in an escrow account until the actual construction begins.
Evaluate The Developer’s Actual Track Record
The marketing person of a developer will talk to you about the projects that make the company look good. You need to do some digging and find out about the projects that they’d prefer you weren’t aware of.
More important is their “delivered vs. promised” ratio – how many projects did they deliver on time, and how many times did what they delivered match what was marketed. Were there widespread complaints about build quality, or were there severe changes in actual product versus marketing material? Were there significant reductions in promised amenities? Public records, owner forums, and local real estate professionals are better sources for this information.
The track record for mid-project changes is especially revealing. It’s not unusual for a developer to change floor plans or specifications after a substantial number of SPAs have been signed. Your contract should protect you from such contingencies – ideally by explicitly stating that any material changes must have your written approval, and/or including a “material change” exit clause.
A professional who is well-versed in your local market is worth their weight in gold in this situation. Realtor Farrukh has the local experience to help you cross-reference claims made by developers against actual delivery records, and quality buyers know that the insider insights they provide are the best way to separate the off-plans that offer true value from the ones that don’t.
Read The SPA Like A Contract, Not A Formality
The most important document is the Sale and Purchase Agreement, but usually, it’s just skimmed.
The SPA should contain a construction schedule with defined milestones rather than a vague completion window, alongside a “long-stop date” – the maximum delay beyond the original handover date that you are required to tolerate before you can either legally exit the contract or claim compensation from the developer.
Penalty clauses tied to that date are equally important, as without them the long-stop date carries little weight. Pay close attention to how the force majeure clauses are drafted too. These provisions exist for legitimate reasons, but they vary enormously in scope, and the broader versions can effectively strip you of any recourse when a developer attributes delays to unforeseen circumstances.
If the SPA does not have either a long-stop date or meaningful penalties for delays, that is not just a red flag. That is a big contractual hole that leaves you with next to no recourse.
Price It Properly Against The Secondary Market
One of the most common mistakes off-plan buyers make is assuming the lower price is automatically a good deal. It might be. But the right comparison is the price per square foot for completed properties in the same area.
If comparable finished units are trading at AED 1,200 per square foot and you’re buying off-plan at 950, you have a real discount that accounts for construction risk and the wait. If the gap is 3-4%, the numbers don’t justify the exposure.
Off-plan transactions can account for over 50% of total sales volume in high-growth markets, but capital appreciation typically peaks only after the 80% construction milestone is reached (JLL). That timeline matters when you’re running the numbers on when you can sell or refinance.
Make Snagging A Condition Of Final Payment
Before making that final payment at handover, walk the property with a professional snagging inspector. Every identified defect should be logged in writing and presented to the developer as a formal snagging list. The developer is responsible for remediation before final payment is due. Skipping this step is how buyers end up absorbing costs that were never theirs to pay.
Don’t let handover enthusiasm or scheduling pressure rush you past this stage. A good snagging report protects you immediately and strengthens your position if disputes arise later.
The off-plan market offers real opportunity. But that opportunity only converts into returns when the legal and commercial groundwork is solid from the start.
