Question about buying off the plan (OTP) please?

[manlybeach]

Recently, I am planning to purchase an offplan apartment property in Sydney which I have registered one of them on the website. I went to several display offices and I hear agents telling me that are mostly sold or few leftovers. I mean obviously, the leftovers are bad position so I ain't going to buy them

However, one of the apartment, it is not officially launched yet i.e. office display or even the info such as the price, size of apartment, strata levy etc and because I was one of the 1000 that was registered, this company agent tells me that I am one of the lucky ones since I get the priority to get the poisition where I can choose before the launch date.

Although the price is not revealed yet, I would need to pay severla thousand deposits (fully refundable) to secure the spot that I can choose which is fair enough. This is first stage of completion by the way. But when it comes to price negotiation, he was firmed that that there is no room for price negotiation because the first batch would be the cheapest and as time goes by or built 2nd stage, 3rd stage etc, it would be more expensive so whatever price that will be set out later, it will be a good bargain etc. So I am not sure what he said is generally right.

Being a first time for buying off plan, it seems to be too good to be true but at the same time, I would like to hear the cons or the negative sides that I might need to consider or need to risk for?

Your advice will be appreciated

Thanks in advance

 

[Shahin_Afarin]

From the top of my head...

Pros:

1. High depreciation
2. Can purchase a property now without settling (coming up with the deposit at a later stage).

Cons:

1. High strata
2. Loses value over time as it becomes inline with other older properties
3. Risk with finance - you cannot get a formal approval until close to the completion of the property
4. Risk with valuation of the property coming back lower than originally anticipated which could cause havoc in terms of finance

Regards

Shahin

 

[DaveM]

Sorry, you have to pay several thousand dollars to obtain a spot in the sales process to then be able to see what is for sale and possibly buy something at full price with no negotiation on price allowed?

Just how shiny were the sales brochures and how white the salesmans teeth to even start to think this was a good opportunity?

 

[Aaron_C]

Sounds like you a ripe for a nice fleecing. Paying to get ripped off.

 

[zapoix.]

Seems a bit strange to have to pay up front to get any information
On selling price / position
Tread carefully
Also what shahni said

 

[Tony3008]

I was told years ago that on large schemes the pricing is adjusted as sales proceed so as to ensure that a decent mix remains available until the end: if you start with 400 you don't want to end up with 25 low floor one-bedders and nothing else. If one corner remains unsold, people will assume that there must be something wrong with it.

I was one of the first people to buy into Central Equity's City Point development so had a free choice. A month or so later two-bed corner flats like mine had been increased by $20K, presumably because they were selling faster than others. Not that it helped me: I sold after seven years and barely got my money back after significant holding costs during this period. Some people may have made money buying OTP but it didn't work for me. But if you're buying a PPoR and being in a particular location and/or having a particular view/layout is important to you, financial concerns may be secondary.