Buying off the plans: 8 important points to follow
Know what you are buying before investing off the plans. Understand all the details to ensure you end up with what you expected. This video and bio will give you 8 points to consider before purchasing a new build off the plans.
8 Quick points
1: speak to a local agent – find out the actual worth of the apartment and what will the worth be upon completion, this will guide if you are paying a fair price for the apartment
2: Use your own lawyer – not the developers suggested lawyer
3: Research the developer, know their prior work and reputation
4: Research the architect -check out the quality and history of their prior work
5: Completion takes longer than expected – what are your rights? Know this before purchasing off the plans
6: The apartment upon completion has something wrong with it – for example there are structural pillars in the apartment that you weren’t expecting or appliances that don’t’ work – how do you ensure you are protected?
7: ensuring the sunlight and views are what you expected and will you always have them – finding out what is happening around the area and future developments
8: Digital imagery can be misleading – look at them with a cautious eye and use google images to aid your decision in buying off the plans
Good day, Andrew Murray from Apartment Specialists talking about buying off the plans. I've just done eight points there. We'll make sure if you're going to buy off the plans that it's going to be a good purchase, because there are a lot of risks in coming to buying off the plans. Okay, here are the eight important points.
Number one is, when people buy off the plans, they often pay too much. Especially where a lot of the purchaser are overseas or just not in touch with the local market. The first thing you need to do is speak to a local agent. And maybe two local agents. Ask them, firstly, what if this apartment was built right now, what would it be worth in today's market? When is it projected to be finished? With the market the way, it's going, what do you think it would be worth then? Now, that's going to give you a very clear indication regarding price, which is one of the most important things.
Number two is use your own lawyer or find a lawyer recommended by a friend. If you are from overseas, then its better using their suggested lawyers. Now, I'm not pointing fingers, since I've just heard and seen a lot of things happen. The reason for this is, it's your lawyer's job to check things like sunset clauses which, for example, you're probably hearing that and going, "What does that mean?"
Well, that's something that's very important. That's why your lawyer's in charge and things like the developer can't make any changes to the unit from when you purchase it. Until it's, when it's completed, if things change. You know, what happens if you find mistakes or errors or there are things that aren't done correctly? All that kind of stuff, so do not use their lawyers.
Number three is to look at the developer's history. When buying off the plans, you're kind of buying into the future, but you can predict the future by looking at what apartments the developer has built in the past. How are they stacking up? Are they leaky? Have they had issues? Did their prices stay the same or did they grow in value? That kind of things.
Number four is is the architect's history. The developer may be fine, but if they are using an architect, then you need to know the architect's previous buildings, because at the end of the day it still comes down to design regarding whether it's going to be leaky or not. It's not just the developer. So always ask, "What other buildings has this architect designed?"
Now next, you want to know and obviously I mentioned it before - what can happen between you purchasing off the plans now and completion time? We want to ask, "What happens if it overruns?" For example, it takes longer than expected?
Next, what happens if you inspect your unit? It's finished, but the appliances don't work.What happens if, like in a high-profile case recently, your apartment is finished and you find that there is a pillar in the middle of your lounge? Are you protected? These are important things to know about.
Number seven is your views and your sunlight, and that is highly important. Most likely when you are buying off the plans, they are showing pictures of great views. Are they protected? Because off the plans, you have got no idea; in the future something else could be built right in front of the apartment building. I've seen people buy off the plans and by the time the building's finished, someone else has built a building right in front it. So you really need to check that out.
Number eight, is when you look at all these photo's and they are giving you these graphical images, do not be taken away. You need to know if it's taken-in by them. When you look at them, say, for example, when they look at that pool, ask, "How big is that pool?" I've seen pools in developments that have 250 apartments plus, and they'd be a great size if that pool was in my house, but not for an apartment complex. So, just make sure you look at those graphical images and just think logically and go, "Yes. Okay, maybe it looks beautiful, but would this be suitable for an apartment complex?"
Anyway, hope that helps. It was a bit too long, but buying off the plans, go through those eight points and you know, if it ticks all those boxes, go ahead.