Anyone know what is involved with buying off the plan and any hints or tips on how to minimise the risk?
Hi Muzza, Be careful with the price you are paying for it. The contracts that i see and circumstances that i know people have been in with buying off the plan the major concern is that once the property is constructed the value doesn't match the purchase price which in turn will cause issues not only are you paying more then what its worth but it will cause problems in relation to settlement taking place as the bank will not lend you as much as you need to settle and you cannot cancel the contract due to the valuation being low. I know of one matter at the moment and the purchase price is $150K more then what the constructed value of the property is. Lucky for the client (not mine)they have enough equity in their other properties just to cover this - they of course aren't happy with using their equity in these circumstances.
Wow, thats quite a loss - I guess the trick would be to really do the research on what similar units are currently selling for and go from there. Has anyone got any views on purchasing off the plan in a place such as the Gold Coast where there are just so many units being built? Surely this could create oversuply and hence a decrease in value of the investment?
