What to know about buying off-the-plan
Purchasing property off-the-plan can be daunting but there are good deals to be had, according to the experts.
John Meagher, managing director of 360 Property Group, the largest privately-owned residential project marketing agency in Australia, and Rich Harvey, president of the Real Estate Buyers Agents Association of Australia (REBAA), agree not all off-the-plan projects are created equal. They say separating the good from the bad takes a little know-how and a lot of legwork.
Harvey, who heads up the country’s largest independent alliance of buyer’s agents, who act on behalf of buyers in property transactions, says to use an REBAA-accredited buyer.
This means that the professional must adhere to a strict code of ethics and put the buyers’ interests first.
Meagher says it comes down to research, market intelligence and good advice. The pair offered their top tips on how to buy well off-the-plan.
1. Location, location
As in every real estate deal, location rules, Meagher says.
“It all comes down to location and supply,” he says. “Do your due diligence on the area and carefully consider its proximity to amenities, public parking, infrastructure and other lifestyle criteria.”
Harvey agrees, saying it’s a suburb-by-suburb proposition.
“Where there’s an oversupply, you can expect a property to go backwards. You want to be in a desirable location with low stock.” Also, check the history of similar developments in the area to ensure the price reflects market value.
2. Look at the big picture
Meagher says buyers should look at the development overall, not just an individual property.
Look for smaller projects, he says.
“Smaller projects definitely do better, but terms like boutique aren’t defined within the industry, so do your research as to how many apartments there will be,” he says.
“You want variation in product type within the development. If you have repetition, it can dilute demand. Whether you want to live in it and then sell it later on, or rent it out, you need to have something people want.”
3. Study the parties
Check the credentials of the developer, builder, architect and selling agent, Meagher says.
“Look into the track record of all those involved. If you can, visit another project to see their work first-hand. Don’t just go off what you see in the brochure or the sales suite.”
4. Scrutinise the floorplan
Closely analyse the floor plan, Harvey says.
“Where is the apartment in the block? What is the cross-ventilation like? Is there enough natural light? Which way does it face?” he asks.
“Looking down at a sheet of paper” it can be hard to comprehend dimensions, Meagher says.
“Many people look at length and width and get a good sense, but I always focus on height too. Ceiling height is absolutely critical to liveability.”
Look at less obvious things like where AC units, TV plugs, power points, NBN boxes, etc are to be located.
“At the end of the day, it all comes down to liveability and you can only know that by looking very closely at the floorplan,” Meagher says.
5. Pay attention to detail
Review the ‘finishes’ list closely, Harvey says.
“The specs might say you get European appliances, for example, but what does that actually mean? Don’t assume that’s a Miele appliance. Even within a brand name, ask what model you will get. These things matter and you pay for them,” he says.
Meagher says buyers need to understand specifically what they’re “ordering”.
“I liken a sales office to being in a car show room. They always have the most ‘specced up’ cars on show, don’t they? Ask. Do I get that light? Will I have tiles to the ceiling in the bathroom like that?There’s lots of questions to ask.”
Also look at common areas, landscaping and security and understand the ongoing running costs, including strata levies, council rates, etc.
6. Ask for changes – but understand the cost
Meagher says the ability to make changes varies.
“If the developer is fully integrated with its own construction division, then some changes may be possible,” he says.
While having a say in how a property looks attracts many buyers, Harvey says it comes with a caveat.
“Understand what any changes are costing you,” he says. There’s no such thing as a free lunch.
7. Dissect the contract of sale – with help
Have a solicitor experienced in buying off-the-plan go over the contract and make sure the information fits with what the developer has told you, Meagher says.
Pay close attention to sunset and variation clauses, as well as the defect period, which defines how long the developer has to fix any problems after you move in. Ensure all relevant insurance and warranties are in place.
For more information please Call Premiere Estate Agents on 02 4622 8100