Q & A's; Buying Off the Plan

Author: Hannah Aria. CEO Australian Prime Realtor. I have heard from many about the anxieties associated to buying off the plan. Even recently at a display centre, there was a lot of concern from potential buyers about buying-off-the-plan. I was happy to assist and offered answers in any way I could, here are a few Q & A's. 1. Is my Deposit Safe? When purchasing off the plan, a deposit is required to secure your property this is 10% of the purchase price. The money should be held in a trust account which means the agent or solicitor holding your deposit is only allowed to release the money to the developer upon completion of the site. Your solicitor or conveyancer should make it clear in the contracts that at no point is your deposit to be used for construction purposes or to finance the build, or to be released to the developer for any other reason. 2. What if the completion date changes? In my opinion, the longer it takes to complete the build, the better off you are. Put it this way, whilst construction is underway, property prices generally rise, you do not pay any holding costs or outgoings until completion. So basically, you have secured a property, that with time will appreciate in value over the 1-2 years it takes to build it and you don't need to pay for anything at all. At completion, your property is usually worth more than the price you bought it for. Holding cost include land tax/council rates...Note: There is also a risk that in a falling market, the property may be worth less than what you bought it for. 3. What if I don't get what I was promised in the plans? It should be set out clearly in the contracts what is included in the sale. Upon completion, an inspection would be conducted to ensure the developers deliver what has been promised. The purchaser should always allow for minor discrepancies however if there are any major differences i.e. size, finishes or anything substantial, the right to rescind the contracts can be exercised. You can only cancel the contracts before the contracts are completed (settlement) 4. What if the builder goes Bankrupt? You need to make sure you will get your money back in case this happens. Many builders and developers have gone into bankruptcy and some buyers have lost their deposits. You need to know where your money will be held. Ensure the deposit is paid into, and remains in a trust account as mentioned in point 1 above. Your conveyancer should ensure that you are protected from this scenario. 5. Rising interest rates. Be aware that when you are due to take out finance i.e. at the time near completion, the interest rate could have significantly changed. At the current time if interest rates are low, they can only up in future. Usually the loan process commences up to 3 months before the finance is required. 6. Stamp Duty Exemptions. In some states, stamp duty is discounted or waived when purchasing newly established properties or buying off the plan. This is a saving of thousands of dollars which ordinarily is paid when purchasing real estate in Australia. Check with your state or territory about what incentives, discounts and bonuses are offered to new purchases. You can also ask you local consumer affairs department for information about your rights and responsibilities relating to this topic. Author Hannah Aria CEO Australian Prime Realtor www.primerealtor.com.au

Is now the right time to BUY property in Australia?

We often wonder if we're any better off or even worse off by selling at any point in time or buying when interest rates are low and property prices are on the rise. I am in favour of investing in cities across the country. Some areas are more popular than others and this is a driver for capital growth or good cash flow. When is buying, selling or renting really the right time. This varies for everyone depending on their individual situation. For one with a steady income and where rent is high, it may be beneficial to buy as the difference between the rent and the mortgage may be little. Maybe you're in a cost effective rental and to buy, you will be paying a significantly larger amount that won't be easily serviceable. It is important to do a lot of leg work and research the market before going into the property market as either an investor or owner occupier. Some investors are looking into their super to buy a property however in my opinion, it is better to borrow the money then buy property for tax purposes by negatively gearing and keep super to earn interest and invest in shares. This is touching on the topic briefly and there really is so much more to consider. The first step to take would be to speak to a mortgage consultant and find what loans are available to you. You will know how much you can borrow, what the monthly repayments would be, and if you can afford to buy a property that suits your needs within that budget. Also consider investing in more affordable areas that achieve positive cash flow through rental income. If you want to know what mortgage brokers are out there, feel free to contact me via www.primerealtor.com.au At Australian Prime Realtor, we are committed to helping you with your property and investing needs. Written by Hannah Aria

Selling house and the hidden costs

Not all of us are familiar with the costs associated with selling our home. Agent fees can sometimes be unclear or daunting and on such an important matter, it is essential that we understand exactly what we're in for whether the property is sold or not sold with the listing agent. Often, advertising fees are unavoidable and we are faced with bills amounting to thousands to cover the cost of on-line advertising, printed material, professional photography and sign-boards just to name a few. Wouldn't it be nice if the stress of paying bills when trying to sell your home for the best price possible was removed, and advertising cost were incorporated in the sales commission fee. I agree it would be a much simpler and desired avenue to take when selling house. It is therefore important to shop around for the right agency when you are thinking of selling. Some agents offer 1% + GST. others offer a higher commission percentage minimise the advertising cost. Australian Prime Realtor have a ridiculous promotional offer available to Sydney siders that's is not too good to be true; it's just simple. $4990 covers all the advertising and sales commission, so sell your house with www.primerealtor.com.au and pay no more than $4990.00. I like the sound of that!