Many people have enjoyed success “Buying off the Plan”
It’s easy – before a building is built you sign up , pay just 10% deposit, wait a year or 2 for it to be built and by then it will have risen in value and you have made a nice profit!
BUT as the attached article explains there can be real problems – in essence the rules can change !
- Lenders ( with a push from the APRA/RBA) have significantly tightened lending rules and people are finding they can’t borrow as much as they thought they could !! & some won’t have enough to settle the purchase and could lose heavily
- Values don’t always rise !! (Did you realise often there is up to 10% Commissions being paid on these sales – so who is paying for that ?
- Some Developers apparently also have clauses which allow them to “renege” under certain circumstances !
- Will you get the premises you saw on the model
So be very careful
- Ensure you have your finance “G’teed”
- Make sure your Solicitor checks the Contract and you know the “traps”
- Is it really fair Value?
- Are you prepared / can you afford to hold the property for 10yrs ?
Link to article – Buying off the Plan