Financing an Off-Plan Purchase: Matching Drawdowns to the Escrow Milestones

Off-plan payment plans and finance drawdowns run on different clocks. A route through the licensing check, the escrow mechanism and the finance that has to arrive on each milestone date.

Buying off-plan means committing to payments on dates set by a developer’s milestone schedule, while a lender releases money against its own tests. If those two schedules are not aligned before you sign the reservation, you will be funding milestones from your own cash and asking the lender to catch up. The off-plan sales framework in the Kingdom runs through the Wafi programme with project accounts designed to protect buyer payments, and the operating detail is a matter to confirm through REGA at the time you buy.

Before stage one

Off-plan is the one purchase where the finance conversation has to happen before the reservation, not after it. Once you have signed a milestone schedule, your payment dates are fixed and your lender’s willingness to meet them is the only variable left.

• Confirmation that the project is licensed for off-plan sale, checked at source rather than taken from a brochure.
• The project account arrangements, and written confirmation that your payments go into them.
• The full milestone payment schedule with dates or triggers for every instalment.
• A lender’s written position on financing this specific project at this stage of construction.
• Your own cash for any milestone the lender will not fund, held and available.

Stage 1: Verify the project and the licence

Confirm that the development is licensed to sell off-plan and that the entity you are contracting with is the licensed one. Check it through the official route rather than relying on a sales office, because a project marketed before licensing is a different risk entirely.

• Deliverable: A dated record of the licence verification and the entity you verified.
• Owner: Buyer, confirming through REGA and the Wafi programme.
• Approval gate: No payment of any kind before verification is complete.

Stage 2: Understand the project account mechanism

Off-plan buyer payments are intended to run through a project account, with releases to the developer tied to progress rather than to its cash needs. Establish the account details, confirm that your payments are made into it and not elsewhere, and keep the proof of every transfer.

• Deliverable: Written confirmation of the account arrangements and proof of each payment into it.
• Owner: Buyer, with the developer.
• Approval gate: Every payment traceable into the project account, never into a general account.

Stage 3: Get a lender’s position on the project

Lenders form views on individual developments, not just on property types. Some will not fund until a stage of construction is reached, some will fund milestone by milestone, and some decline off-plan altogether. Ask for the position in writing, naming the project.

• Deliverable: A written statement from at least two lenders on this project and stage.
• Owner: Buyer.
• Approval gate: The lender position obtained before the reservation is signed.

Stage 4: Align the two schedules

Place the developer’s milestone dates beside the lender’s release conditions and mark every milestone the lender will not fund. Those are the amounts you must have in cash, and they are usually the earliest ones, which is the opposite of what buyers assume.

• Deliverable: A reconciled payment calendar showing the source of funds for every milestone.
• Owner: Buyer.
• Approval gate: No milestone left without an identified source of funds.

Stage 5: Read the contract clauses that matter

The specification, the permitted variance in area, the handover date and the remedies for delay, the conditions for assigning or reselling before handover, and the refund position if the project does not proceed all sit in the contract. Each of them interacts with your finance.

• Deliverable: A clause-by-clause note on specification, area variance, delay, assignment and refund.
• Owner: Buyer with a licensed legal adviser.
• Approval gate: Every one of those clauses understood before signature.

Stage 6: Fund the milestones and keep the file current

As construction progresses, keep the lender updated and your documents current, because a long build can outlive a salary certificate, an identity document or an approval. Request each drawdown in advance of the milestone date rather than on it.

• Deliverable: A paid-up milestone record with the lender’s file refreshed as documents expire.
• Owner: Buyer.
• Approval gate: No milestone date reached with a drawdown request not yet submitted.

Stage 7: Handover, valuation and conversion to long-term finance

At handover the unit is inspected, snags are listed, and the finance normally moves onto its long-term basis against a valuation of the completed property. A valuation below the price you agreed years earlier is a live possibility and should be planned for, not discovered.

• Deliverable: A snag list, a completion valuation and the long-term facility documents.
• Owner: Buyer, with the lender and the developer.
• Approval gate: Snags recorded before you accept handover, and the valuation position understood.

Stage 8: Register the title in your name

Ownership is completed by registration, not by handover of keys. Confirm the registration step for the finished unit, including any common property arrangements for the building, and obtain a copy of the record.

• Deliverable: A registered title in your name with the lender’s security correctly shown.
• Owner: Buyer.
• Approval gate: A fresh copy of the record read, not assumed.

Handovers between stages

The developer’s sales team, its collections team and your lender each hold one part of the calendar, and none of them reconciles the three. Keep the reconciled payment calendar yourself, send a copy to the lender and the developer, and update it whenever a milestone moves. The build will slip, and slippage changes when you need money.

How you know it is finished

The purchase is complete when the unit is handed over against a recorded snag list, the title is registered in your name, and the finance sits on its long-term terms with the security properly registered. The off-plan framework and its operating rules are developed over time, so verify the current requirements through REGA and your lender rather than relying on how an earlier project worked.

Domira works alongside the finance side of a property purchase or a build: the valuation evidence, the cost plan and the construction programme that a lender needs to see. The lending terms come from your bank or finance company, and Domira makes sure the property side of the file stands up.