Bad experience with developer - Hamton Melbourne

C

Camo

I am a first time investor and recently decided to purchase my first investment property. I chose to purchase a 2 bedroom apartment in South Yarra, Victoria called societysouthyarra for 603k off the plan. The Real Estate agent we dealt with was Sunil from Castran Gilbert who was very helpful, informative and professional. We felt very comfortable.
We signed a contact of sale Thursday before Anzac day with a subject to finance clause which was 10 days. It was explained if we needed a little more time to call the agent and there would not be a problem.
The 10 days expired on Monday 5th. On Friday 2nd my broker advised me our finances were approved but there was a delay from the bank on the valuation to give unconditional approval. My lawyer requested an extension until Friday 9th. The reply from the developer's lawyer was blunt, unless unconditional approval is met by 5pm monday the property will be put back on the market.

A second attempt was made for an extension without any acknowledge from the developer. We had no choice but to withdraw on Monday 5pm. On Tuesday morning 6th 9:45 am I called the developer (Hamton) directly and spoke to Cameron Yates (Sales Director) who did not seem to care at all. He just said he had already sold the property. The overall opinion i received was TUFF.

Do all property developers have such poor customer service, or in Hamton particularly bad in the industry?

Can anyone suggest a good developer in Melbourne?

My first experience in investing has been poor.
Thanks
 
In all fairness, Camo, you signed a contract. You didn't fulfil your end of the bargain, so the developer exercised his right to sell the property to someone else. All according to the word of the contract.

The developer's objective is to sell the property at the best price that they can. For all they know you're stalling because you're scrambling around trying to find finance, and there is a risk that after you get the extention you won't get the finance and cancel the contract anyway.

Meanwhile the developer has probably turned away other buyers, and they're losing money on interest payments every day. Why should they take a chance on you when there might be another buyer who already has approved finance sitting there waiting?

I don't see what the developer has done wrongly in this case. It's not about good or bad customer service, but about contracts and conditions.
Alex
 
Don't worry Camo.

It's probably a blessing in disguise. Come back in 12 months, you'll probably buy the same property a lot cheaper.:D
 
Camo, I nearly made the mistake of buying my first investment property via Castran Gilbert off the plan.

Most developments are generally over priced by 20-30% compared to similar types of properties in the market. If you've done your due diligence, you'll find you could get much better value else where.

This is a blessing in disguise for sure. I wouldn't take this as a negative experience. Remember take your time and don't get excited by the first thing you see!

If you paid 603k for it today and sold it maybe 2-3 years down the track, you might only break even or possibly make a loss due to the inflated pricing you could have paid. These sorts of properties do increase in value, but they could take a very long time.
 
Thanks for all your comments.
This may be the best outcome.

Murphy's law would predict finance being approved the day after.

It is extremely frustrating when the developer really couldn't give a rats, and has no customer service skills at all.

Anyway I have been recommended by a friend to speak with Quartile. Does anyone have any comments regarding their advice?

Thanks
 
If you're looking at someone to provide advice, that is handy and would complement your own due diligence as well. I cannot stress this enough. I nearly made a few stupid investment mistakes by getting too excited with my first investment property. Picking suburbs and property type (unit, house) is another story altogether, however once you've decided on your criteria I still strongly suggest you spend your weekends and spare time to build your own knowledge so that you can make the best decision.

Find 2-3 suburbs you would buy into.
Know the area.
Walk the area and get a feel.
Look at 10-20 houses in each area and get an idea of how much "Bang for buck" you can get.
Study the rentals for the types of properties you're after.


Camo said:
Thanks for all your comments.
This may be the best outcome.

Murphy's law would predict finance being approved the day after.

It is extremely frustrating when the developer really couldn't give a rats, and has no customer service skills at all.

Anyway I have been recommended by a friend to speak with Quartile. Does anyone have any comments regarding their advice?

Thanks
Click to expand...
 
Camo .. as a first time investor I'd like to see you spending a whole lot less than $600K. And I'd sure not be buying "new - off the plan".... there's traps and pain in that one that can really test you....not to mention normally a looooong wait for capital gains on new builds.

The "one bedder" link in Y-man's post would be a great starter to get you "in the swim" . Make sure you do a Body. Corp search before buying.

Of course, if you're "made of money" ... just do what you like :)!!

LL
PS This is NOT a paid advert for Metropole ( Mike Yardney) , but if you DO want to use a "finder" for apartments in Melbourne, you could do a lot worse IMO.
 
padfoot22 said:
landlubber, what do you mean by this comment? Can you please elaborate.
Click to expand...

He means that your solicitor should request the minutes of the Body Corporate meetings and decisions for the past couple of years to see if there is anything happening that may cost you money.

For example, if they have voted on a special levy to cure the building of concrete cancer that will cost each owner $20,000 it is you who will be paying it once you have bought the property.
 
hi camo
at 600k on a presale thats about the right numbers so you are not buying cheap.
and if as you have said these guys have the customer skills you have said then you would do well to steer clear.
in this market presales are the hardest thing to get so if they don't understand that then they have a big problem.
a developer looks at 50% presales in this current market unless using chinese money or there own ( both of which I could do alot more with and fully lending from a bank).
I try not to lose presalers as they are very valuable.
but it seems that these guys did not care so I would not worry about it I would look for othr in the market there is so much around
I would not let it get to me for less then 1/4 of sec and even then I would use that 1/4 of a sec to think where I was going to invest some where else.
at 600k I would go into the area that you were looking at buying and you will find some already constructed units at 20 to 30% down on price at retail of say 12 months ago and these are where to go hunting.
even have a chat with a few real estate cause they know the ones that are hurting and neg a deal with these guys
you are looking at melb but at 600k you can get 2 maybe 3 units in liverpool parramatta,blacktown,fairfield, and even wharoonga and the returns and potential growth would be alot higher.
unless you want to live in the property these are the areas that I would look
and you would have your areas down there that are similar.
go to a real estate and ask what areas are hurting the most.
and then go hunting
and at 600k thats a big scatter gun.
it may not be that you have 600k in cash but if you want to spend 600k on real estate thats what I would do.
there is one little bit of general advice not investment advice
as you are a first time investor
don't go for 600k
go for 3 x 200k
1
2 or 3 months later 1
2 or 3 months later 1
you don't jump into investing you build on investing.
and thou these guys you ahve spoken to may not have much customer relations
I do and my presales not only buy presales I setup structures for them to keep investing and they take small steps not jumps.
investing is a numbers, a risk mitigation, and diversification game and the best way to play is highest number, lowest risk, diversify into different assett classes.
and by higher numbers thats not price thats value 1 very good valued property is worth 10 average and 10 average is alot better the 1 very big dog and you can only work them out on value.
and not going to value this post have a read of my post on value.
 
padfoot22 said:
please elaborate.
Click to expand...

Padfoot22, the post by mam544 is quite appropriate. In essence, you want to know "what's going on". More important in older blocks which could have structural problems ( hail damaged roofs in Sydney:rolleyes:...concrete cancer (rusty reo) near the sea etc ) or could be the subject of large levies ( like $50K) to re-furb the block. The re-furb may well be a genuine good idea...but you HAVE to stump up the cash !!

BTW body corporate is now "Owners Corporation" and Consumer's Affairs has just published a guide booklet available free ..here's the link.

http://www.consumer.vic.gov.au/CA25...+&+Units~&3=60-New+laws+for+bodies+corporate~

That's about it:).
LL
 
This sounds dumb

Sorry Camo - But the whole things rings of a sob story. You signed a contract, 10 days went by and then you tried to stall, the Developer would have every right to just sell the apartment to someone else. What else do you want? Everyone to wait for you?
A lot of people answering this thread - but it all sounds like crap to me.
Take responsibility - you needed to ask for a longer finance clause, or have extensions in place before you sign. Learn from this and grow and stay away from the blame game. Its noone's fault but yours. Sounds like the place was out of your depth anyway.

Paul
 
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