Buying off the plan - what are the steps?

[eyogina]

Hi
Sorry if something similar has been asked before. I am a cautious/worried purchaser. I am reading lots of stuff about off the plan purchases, but want an understanding of the order of events.

The Council told me that the Developer has been granted approval to build x amount of townhouses on the piece of land. What happens next, what are the other approval processes from here through to settlement? Subdivision, Building surveyor, register of title, certificate of completion etc etc...

I would like to know before we sign a contract of sale, so I am more aware of what potentially could be the delays. The Vendor has just said 'he has engaged a builder and they are right to go, and once they go, will finish quick'. (I'm not so sure as yet).

Cheers

 

[marg4000]

Don't believe a word the builder says, or the vendor for that matter.

The fact is that he probably needs a certain number of "pre-sales" to get finance.

If you are #1 and he needs 4, you could be waiting a long time for the building to commence, assuming that the project ever gets actually started. In the meantime you are in limbo.

There is no way I would consider it until the construction is actually under way, even then I would be very wary.

Yes, the first buyers get the pick of the units, but the best (initial) prices are usually obtained by the last 1 or 2 when the project is finished and the developer wants to move on to the next project.
Marg

 

[Propertunity]

Sorry if something similar has been asked before. I am a cautious/worried purchaser.

If you are indeed a cautious/worried purchaser at this stage then as the build progesses (if it does) then be prepared for more caution & worry

The Council told me that the Developer has been granted approval to build x amount of townhouses on the piece of land. What happens next, what are the other approval processes from here

The developer will need to get finance - not an easy task in the present environment. To get finance (if they can at all) they will need pre-sales - people like you and others who will commit to buying the finished product. Possibly 75% of the project will need these pre-sales.

I would like to know before we sign a contract of sale, so I am more aware of what potentially could be the delays.

Delays: finance, wet weather, soil test that shows problems, builder goes bust mid-way, unions shut down the site, find some aboriginal bones on site or a threatened species of frog or fern......etc etc

The Vendor has just said 'he has engaged a builder and they are right to go, and once they go, will finish quick'. (I'm not so sure as yet).

ROTFLMAO
Whilst it is true that the approvals process is probably the longest and most difficult part and the build relatively easy (in some cases) by comparision, it would be unwise to think it will be all smooth sailing.
Look it may all go really well - and many projects do. Just as many have some 'issues'.

 

[The Y-man]

I am a cautious/worried purchaser.

Then why are you looking at buying off the plan?

Cheers,

The Y-man

 

[Jodie701]

I just bought off-the plan (last year) as my first IP. The property recently had a bank valuation of 10% below the purchase cost. We may have been better off buying a near new existing home.

 

[Propertunity]

Off the plan (OTP) works best in a rising market. Clearly Perth has not been in that situation for some time, unfortunately.

You take on a whole 'nother layer of risk buying OTP and.....well this subject has been done to death. Do a search on "OTP".

 

[travelbug]

Off the plan (OTP) works best in a rising market. Clearly Perth has not been in that situation for some time, unfortunately.

You take on a whole 'nother layer of risk buying OTP and.....well this subject has been done to death. Do a search on "OTP".

If I remember rightly Jodie asked for advice on this forum as whether to buy OTP unit in Parramatta last year. Most advised not to buy due to prices of established units in the area.

Unfortunately (it seems) she decided to buy anyway.