Hey Guys,
Im looking at buying a property Apartment in Sydney (off the plan)..im new to this whole scenario and recently visited the Demo Room which shows what the expected end product to be…I just need some tips or cautions from the guys here that have experience in this (not just guessers. lol)
i.e
What to look out for (cautions, etc)
Qs to ask the developer
recommendations, etc
Thanks!
Rob
Look at the contract carefully, and if there's anything wrong with the unit on settlement (not built to specifications, structural problems, etc) - do not settle until these issues are resolved.
The photos the developer or their agent gives to you are not binding (except the floor plans).
Sweet..
But theres no conract now until it's finished in Dec 2015
but they're asking for a 10% deposit which is like $50,000 to secure it
We used Deposit Power www.depositpower.com.au once for an off the plan purchase.
Keeps your $50k in the bank earning interest.
Our settlement was delayed by more than 12 months. The developer wanted us to return the contract. We held out and had to buy another Deposit Bond (they last 12 months I think.)
All the time values were going up, and that's why the developer wanted us to cancel the contract, so he could sell it at a higher price.
The price increase was equivalent to the 10% deposit - how ironic.
Remember, the developer needs a percentage of pre-sales before the banks lend HIM money to begin construction.
All the blurb, demos, pictures are a fantasy and worthless until the bank OK's his loan. So keep your $50k in your pocket till you see something real happen. Hate to be stuck with a glossy brochure for $50k if something goes wrong.
OK so you're saying dont throw any deposit until construction starts?
At the moment it's a gaping hole in Sydney's South West area. There's not machinery
Can I get the contract without paying the deposit?
When is completion due - years? months?
Take a look at the DP website (and get an online quote) - it explains it better than I can.
Basically, if you can get finance from your bank, then Deposit Power will guarantee to the developer that you have a deposit ready (so meantime dont go spending your deposit).
On settlement date, you pay ALL the funds to the developer in one hit.
The cost for this guarantee depends on the deposit $ amount.
Per the website, I was one of the 750,000 people helped by Deposit Power.
If it's an investment property, the cost is deductible.
Your solicitor would/should be familiar with it.
(There are other companies as well)
Good luck.
I don't want to go against the grain here but I have worked in off plan property sales for the past 18 years of my life and most of the comments here are alarming at best. Please seek your own advice, I'm thinking ozb not the best place to take advice on this topic, a $500 bill from your solicitor to step you through the process and contact would be the best investment you can make in your circumstance.
Jason, I know I'm not asking OzBargainers for Financial advice or whether I should or shouldnt invest in that very unit, moreso, experiences in this, or things to look for.
You said you have dealt with Off plan property for 18yrs, is it more bad than good?
A friend got caught out with paying high rents due to a series of construction delays. Despite careful consideration the reality was <70% of expectation noted from floor plan, model and video displays. Rising cost during the construction phase had resulted in cheaper materials, fittings, verandah railing etc installed.
Ozindia,
Read the clauses carefully. Apparently this one is in every contract that the company has the right to change the fittings and appliances.So you might not get what you are shown in the photos.Be aware. Personally I wouldn't buy off the plan.
Hey just wanted to let you know what just happened to us. We are building a house off the plan in WA and we just got hit with a $3700 "increase". We signed the final plans in January but because the cost of materials, tradesmen etc. has gone up since then they apparently can charge us the extra.