Buying an apartment is a significant investment that can come with a variety of risks that require the proper research and due diligence to avoid. From hidden costs to the fine print in contracts, ensure you have the right professional support to avoid falling into the common traps of buying property.
Apartments in major cities like Melbourne are often sold off-the-plan these days, which can bring additional risks. Buying off-plan means getting an apartment that hasn’t been built yet and is either in the planning or construction phase. We’ll go through the risks of both pre-existing and off-the-plan apartments.
When purchasing a pre-existing apartment, there are a number of things to check, from easements to owners’ corporation fees. These include:
Buying an off-the-plan apartment usually involves signing a contract and fronting a 10% deposit with the balance payable at settlement once the apartment is complete. The amount of time between paying your deposit and settlement can be years.
This is good for some buyers who can save up money to contribute to the purchase, but it means the deposit can be tied up for years. Buying an off-the-plan apartment is an attractive prospect as there are tax advantages for investors, and grants are available for first-home buyers.
The most important thing to do when buying an off-the-plan property is to research the developer. A strong track record with multiple high-quality projects is a good sign. If possible, speak to owners from their last completed building project about the quality of work, timelines and whether any disputes arose.
A conveyancer can help by thoroughly investigating the contract for your off-the-plan purchase, looking for clauses that might affect your interests. For example, a common clause included in off-the-plan contracts is a sunset clause, which allows the developer or buyer to cancel the contract if the building isn’t completed within a certain timeframe. Contracts can also allow around 5-10% variance in size from what was agreed upon.
Due diligence when buying or selling property can be tricky. If you have any queries about checking property titles on apartments, or require conveyancing services in Melbourne, talk to the experienced team at Just Conveyancing.
Call us today on (03) 8580 2276 or contact us online.