By the time you bring the Contract for Sale to your lawyer, you are probably 80% certain that you want to buy this property. Your lawyer will review the Contract with you and ensure that you understand your rights and responsibilities but your lawyer cannot give you any professional investment or financial advice. So before you bring the Contract to your lawyer, you should do some investigations of your own. Some things to research and consider would be:
Where are you buying your property?
If you are purchasing an off-the-plan property with the intention of it being an investment property, then one of your biggest concerns would be its potential for capital growth. Location plays a big part in determining the rise and fall of property prices. You should always do your own market research and analyse the local market conditions, and it would be prudent to seek professional advice about the market value of a proposed project.
What is the rental demand?
If this is an investment property, you should research the potential rental return of the property. Some factors to consider would be proximity to the CBD, public transport, socioeconomic demographic of the area, and the location, size and design of your property.
Is the developer reliable?
When you buy off-the-plan, you are buying blueprints put together by the developer and its team of architects, essentially a property which is proposed to be built in the future. There are many uncertainties when you buy off-the-plan and careful consideration should be given to whether the developer has a good track record. You should research the background of the developer and ensure that the developer for the project has a good reputation for both quality in design and construction. If it is a major developer with a history of completed projects, as part of your due diligence you should inspect completed projects and check out the quality of their work. If the developer is not the builder, check that the developer has a team of equally reputable builders.
Have you had a look at the display home?
For off-the-plan properties, there are often display homes available for viewing. You should take time to carefully inspect the display home and their models and plans. Have a look into the quality and design of the developer’s fixtures, fittings, finishes, and other smaller details such as the floor covering and colour scheme. You need to have a good idea of what is included and excluded in the purchase price. While you are there, you can ask about the complex as a whole. If the project boasts gyms, saunas, gardens and playgrounds it is likely that body corporate fees would be higher. Whilst these luxuries are nice to have, there will be costs involved in maintaining them.
To conclude, after all the due diligence has been done and you have picked a property you are happy with, you need to review the Contract very carefully with your lawyer to make sure that your expectation of the final product matches what is written in black and white. While you may read through a Contract and think that it is fine, it is always safer to seek professional legal opinion as a minor oversight could be difficult to reconcile after Contracts have already been exchanged.