Legal Settlements WA

INCOPORATED BY GEORGE PAPAMIHAIL BARRISTERS AND SOLICITORS

Risk Management before you consider buying a Property off the Plan

Buying residential property off the plan can have risks.

No commercial transaction is risk free. The best you can achieve is to minimise the risk in each transaction by carrying out thorough due diligence and getting sound advice.

This is smart risk management which should be done before you even think of signing any contract with a developer to buy a property.


Value Risk – The Property Value on Completion may be less than what you paid.

Consider the following –

  1. Why are you buying this property?
  2. Is it to live in or an investment?
  3. Is the current property market buoyant or flat?
  4. If for instance, you are buying an apartment are there contemporaneously too many large-scale developments on foot in the same area which will result in an oversupply of housing stock in that market that decreases the values and reduces returns by lowering rental rates.

If there is an oversupply in a market then values and rental return will decrease.

The answer is study that market and know it before you buy.

You must not rely on the developer, his sales team or the real estate agent. Do your own research. If you feel that is a task you prefer a professional to do on your behalf – then engage that professional.

Contact the local council they can provide information to assist you in your research. Councils will provide information such as a list of the pending developments. This way you can gauge the level of supply in a market and the demand for a type of property that you are considering buying.

Do your research or have a firm like ours do it for you. A little time and care will save you a great deal of anxiety and money in the worse case scenario.