Hi Everyone,
I wish to ask if I could pick your brains a bit.
I've been approached by a property developer via a 3rd party who wishes to buy the entire building of where I live in. It's a small number of units of around 15. It's all just talk ATM so I'm not holding my breath.
The offer seems quite nice, but i am a little wary of what can and does go wrong. All I know so far is like an initial deposit of around 15%. Settlement period of 18months.
Thanks in advance and I appreciate the input.
Think about where you will move after settlement? What will the prices be then - would you still be able to afford to move there in 2 years time based on the price you are getting for the apartment now.
Be the last person to sell and you'll get more money.
If it's going to be a residential development maybe ask for somewhere to live in the new development.
I thought they changed the rules for strata a bit where now only 75% of the owners can now force the other minority owners to sell? So idk if holding out is the best option?
And whats stopping them from developing and giving you the crappiest one?
No lol. Don't buy off the plan! The builder could go broke or the finished apartment could be different to what was promised. Not worth the risk!!
18 months is a L-O-N-G settlement in todays market. The offer should be based on 2023 pricing otherwise they're gaining while you're holding.
Be interesting to know if those Sydney cul-de-sac properties that sold out in bulk to a developer - if the development ever went ahead.
I have thought a bit about where to go after. Still undecided. I feel ok with the 18 months as that will help me look for a new place. Happy to go back to negiogate with them more about it.
I should mention that i bought this place around 3 years ago and the offer is around 35% more than what i paid for it so i feel its pretty good deal.
I was wondering more like what kind of dodgy tactics they may use in the contract that people have found.
Thabks again :)
Look for what conditions allow the developer to back out and get their 15% back.
Go talk to your neighbours. No need to tell them anything specific, but get a feel for what they are thinking, most likely they’ll have been approached too.
As an aside that settlement period sounds very long - like they are hedging their bets.
I chatted to a couple of them. They seem to be mostly onboard with the idea and the offer. We are all a bit really just concerned about what the contract is gonna be like.
Yes, it’s such a gamble. Can you do any research into the developer making the offer? e.g. previous projects
Call a few real estate agents and get a valuation that they think the place will sell for. Then use this as a starting point. If you got 35% for 36 months then half that for the next 18 months and start at this figure PLUS costs, like conveyancer or lawyer (few K) and moving costs (few K) and loss of wages for at least a month (few K) due to looking for a new place and then moving.
1 of the neighbours did chat a bit to the local agents. Now they wish to get their nose and "work for us" for a fee.
I think the 35% is for all those costs that u mentioned but thanks for reminding me of my future costs
Watch the fee as it will be jam for nothing and they may get a kick back from the developer, so be aware they may not be working in your best interest.
They should be paying a lot more than just your costs, property prices have been soaring lately and will only be higher in 18 months time. You may find yourself unable to afford anything similar to what you're living in and have to take a step backwards.
and will only be higher in 18 months time
Got a crystal ball? :)
@ihbh: The worst of the pandemic is over, if we were going to have a big recession it would have already started. Instead, property prices boomed. No reason for them to go down now.
Anyway, if property prices went down you can bet your bottom dollar the developer would pull out of the deal. That's why they want such a long settlement period.
You can always say, "It depends on the conditions."
Then read the conditions. See if they suit you.
Hold out for more.