Buying Off Plan - Good Idea?

go4it

I'm a first time buyer, looking at a variety of options. I am keen to make money on my first purchase, to set me up well for my future.

I have seem property that I can buy off plan, it would be ready Autumn 2007. The estate agents want a £1K fee to secure the plot. It then sounds like there is a 28 day exchange with payment of a 5% deposit upon exchange (with the 1k deducted from that deposit). Now can I assume (being young and naiive!) that the rest of the money (property price - deposit) is required Autumn 2007? Cause if I secure the plot, could I technically sell the property whilst it is being built? i.e. I sell it March 2007, come Autumn 2007 I would pay the property price and pocket any difference????

Am I being incredibly stupid or is this an option???

BTman

I would advise you to buy three, then you can tripple your profit (or loss;))


Too much "property !!!!!!" me thinks...

A_Nice_Englishman

I would have thought the most you could sell would be the right to buy the house when it was finished, since you wouldn't own the house itself until you'd paid for it. Whether anyone would buy that off you I don't know.

You'd have to look at the contract you signed with the builder and discuss it with your solicitor.

silvercar

you could sell the property before it is built. You tell your solicitor to make sure the contract is "assignable". You would then sell it to the new buyer for the price you paid plus a fee payable on completion. The new buyer is then assigned your contract and you get the extra when the house is completed.

Doozergirl

So silvercar has presented you with the fact that you would need an assignable contract...

But I'm sorry, I think your idea is ridiculous. Of all the thousands upon thousands of new build apartments that are being built in (eg.) Birmingham city centre, there is just not enough demand. Prices are not rising and in fact, they are as a whole being advertised at less than they were a couple of years ago.

There's gonna be no huge resurgance in the market and the last place it will happen will be new build apartments; there's vast oversupply. I can't see your development being exactly 'exclusive' with anticipated completion in Autumn 2007.

Buy a place because you want to live in it. Property is no longer a cash cow and theres' no money to be made without graft.

go4it

Thanks for the info! The property in question is next to Sheffield City Centre. It is the second block of flats, they is already block one, so I guess that there will be loads for sale at any one time, pushing the price down.

The thing going for it is that Sheffield City Centre has a major redevelopment plan, but it is not due to be completed until 2012.

The thing is I would not want to live there, I only thought about it for the money making possibilities!

noyk

Buying Off Plan - Good Idea?

Simple and complicated answer: no

clutton_2

Buying off plan ??? bad idea ........

tomstickland

The thing is I would not want to live there, I only thought about it for the money making possibilities!

Avoid then!

elizw

Often in these new builds there is a premium and in valuations the surveyors say that it might not achieve the same value on a resale - - but who knows what is going to happen in the future. I would be scared of making a loss personally.

lynzpower

One thing that I believe has happened with a new devlopment locally to here.

A)the builder didnt state clearly how many properties there would be on the development ( Its HUGE)
b) the buyers didnt quite realise as they were buying off plan, that the rooms would be pretty small. An EA that I spoke to last week, said lots of people seme to have been misled.

If you wouldnt live there yourself I agree with Tom, avoid like the plague