common mistakes first home buyers make

Buying off the plan – Sounds great BUT beware of the risks!

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 ?

Have fun

 

Ron

Link to article – Buying off the Plan

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