Crowd sourcing: similar experience buying off the plan with low low valuation

Hi All,

I've got a friend who is in need of your social networking assistance. She bought a property off the plan in Melbourne from Brady Group a few years back (called Melbourne Star).

It is due to settle on 18/12/2013 but all bank valuations have come back significantly below contract price.

She is asking for help to locate others who have had similar experience to see how many buyers are in the same boat and what others have opted to do in this sort of situation (past & present).

In particular, she is keen to get in touch with those who bought into Melbourne Star, either respond to this thread, send me a private message or drop her an email at "Melbourne.star.2013@gmail.com".

Many thanks!
 
What does the contract say about finance approval?
If finance cant be obtained (due to banks not liking the val) then cant she exit the contract?
 
Buyers purchasing of the plan apartments seem to think the contract is an option to purchase rather than a contract.

When the values rise the purchaser doesn't pay the seller extra yet if the value is less they seek to take legal action against the nasty property developer.

Tell your friend to have some ethics and follow through with the contract they have legally committed to.

Alternatively you can use the standard excuses most purchasers ues:
- product is not as described
- changes were made and not notified in time to buyer (big one in WA)
- you were mislead about contract at purchase date (throw in some personal legal action against the agent himself to really have affect with this one)
- I thought the contract was conditional

Merry Christmas
 
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well it totally depends on if there is an exit clause due to finance

I've yet to see a developer that will allow a finance clause on a long term contract.

What can I say, Caveat Emptor. OTP purchases have an element of risk in them. breeze's friend either needs to come up with extra cash to complete the settlement, or waive the deposit (and possibly more) goodbye.
 
I've yet to see a developer that will allow a finance clause on a long term contract.

What can I say, Caveat Emptor. OTP purchases have an element of risk in them. breeze's friend either needs to come up with extra cash to complete the settlement, or waive the deposit (and possibly more) goodbye.

Yeah I thought it was either non existent or not very common

Hate it how developers can get out of it anyway they want and increase costs claiming it to be unexpected
 
Hi All,

I've got a friend who is in need of your social networking assistance. She bought a property off the plan in Melbourne from Brady Group a few years back (called Melbourne Star).

It is due to settle on 18/12/2013 but all bank valuations have come back significantly below contract price.

She is asking for help to locate others who have had similar experience to see how many buyers are in the same boat and what others have opted to do in this sort of situation (past & present).

In particular, she is keen to get in touch with those who bought into Melbourne Star, either respond to this thread, send me a private message or drop her an email at "Melbourne.star.2013@gmail.com".

Many thanks!

Hi,

I'm arranging finance for two clients with properties in this complex. Fortunately for them, they have the funds to make up the shortfall. This is just one of the risks of buying OTP and will be a costly lesson for your friend.

Kind regards,
 
Find out who the mortgagee is. See who their panel valuers are. Ring a valuer and ask for the cost of a valuation. Ask if they have valued any of the other units. See if they will tell you contact details of those buyers.
 
Yeah I thought it was either non existent or not very common

Hate it how developers can get out of it anyway they want and increase costs claiming it to be unexpected

Developers need deposits from pre-sales to get their funding from the bank so they can build the property. The pre-sales need to be unconditional contracts.

As a result, they can accept a 2-3 week finance clause so the buyer can do their (very basic) due diligence, but they can't accept a 1-3 year finance clause.

Developers generally can't adjust the sale price on the contract unless you were silly enough to sign a contract that would allow this. Always a good idea to float the contract with your legal team during the cooling off period, but absolutely imperative to do it for an OTP purchase.
 
Can't contribute much as my otp come out on the mark. The developer sent a valuation pack to compare the unit price with the latest otp sales around the area (all a lot higher). Not sure whether this help.

Though, do you think lower otp valuation is more likely to happen in Melbourne market?

A friend of mine have only bought off the plan in Sydney (he has 3 now) and so far all of them either on the mark or slightly above purchase price upon settlement. Or, he's probably really good at choosing.
 
Though, do you think lower otp valuation is more likely to happen in Melbourne market?

I don't know about Sydney but the Melbourne CBD market is a GLUT right now. There are literally thousands of new apartments that are either:
- Being built
- Just been built
- Have approval to be built; and
- Waiting for approval to be built.

There will be literally tens of thousands of apartments flooding the market....I don't know why anyone would buy a residential apartment in the Melbourne CBD. You would be losing money for the next 10 years at least.
 
Developers need deposits from pre-sales to get their funding from the bank so they can build the property. The pre-sales need to be unconditional contracts.

As a result, they can accept a 2-3 week finance clause so the buyer can do their (very basic) due diligence, but they can't accept a 1-3 year finance clause.

Developers generally can't adjust the sale price on the contract unless you were silly enough to sign a contract that would allow this. Always a good idea to float the contract with your legal team during the cooling off period, but absolutely imperative to do it for an OTP purchase.

playing devils advocate, if you were confident of your product and knew it wasnt overpriced, then you could put your money where your mouth is and allow finance clauses for poor valuations only
 
playing devils advocate, if you were confident of your product and knew it wasnt overpriced, then you could put your money where your mouth is and allow finance clauses for poor valuations only

Then you can't get a bank loan to even build.
 
I don't know about Sydney but the Melbourne CBD market is a GLUT right now. There are literally thousands of new apartments that are either:
- Being built
- Just been built
- Have approval to be built; and
- Waiting for approval to be built.

There will be literally tens of thousands of apartments flooding the market....I don't know why anyone would buy a residential apartment in the Melbourne CBD. You would be losing money for the next 10 years at least.

There are loads here too, not right in the CBD - around the CBD, e.g.
  • Harold Park in Glebe
  • Macquarie Park Village - presale for 2017 completion, 2 bedroom apartment si $800K ish :eek:
  • Macquarie Residence - almost done (I think)
  • Lindfield Crimson Hill - more reasonable at $720-$780K for 2 bed.
  • INDUSTRI Newtown
  • Greenland Centre in CBD
  • The Park - Lane Cove
  • The Heritage - North Sydney
  • Air - St Leonards
  • Top Ryde City Apartments
  • Abbot - Mosman
  • Capitol - Bondi Junction
  • etc etc

Honestly not sure how they can sell such price on apartment that's not in CBD.
 
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Hi All,

Only got notification of the first post and did not realise that there were so many other posts (time to learn how to use this site!).

Just an update...

The contract was unconditional because the sales guy said "won't sell with finance clause".

The purchasor was verbally told that the neighbouring building was of a certain height - since then it's been built up a few more levels by same developer.

Anyway, friend is going forward with the purchase. Just wanted to know what others did and what decision choices are available (not much, by the looks of it).

Classic case of buyers beware.
 
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