Homework needed before buying an apartment off plans
If you are thinking of buying an apartment off the plans you need to do your homework.
That's something that has been highlighted by the rising number of developments in Auckland that are not going ahead.
Plans for around 35 developments have been abandoned - 15 percent of all the new apartments that are in the works.
But for many people buying off the plans is still an attractive option.
Mortgage advisors and real estate agents say there are some things you need to check.
1. Research the developer and their reputation
Mortgage advisor Bruce Patten says "Reputation is everything, so research the work ethics and level of integrity of the property developing company."
Try to find someone who bought an apartment in one of their other developments. What do they have to say?
Mr Patten says if a developer has good reviews and is recommended by others, the chances are you are dealing with a reputable organisation.
2. Location, location, location
Real estate agents Barfoot and Thompson say the old cliché is true. Location is important. In fact with apartments it is more important.
What is the neighbourhood like? How close are you to good cafes and shops. What are the schools like? Is there good public transport? Are other developments planned?
What special features will your building have that other developments do not?
3. The size and layout of the apartment
This might sound obvious - but stop and think about exactly how big your apartment will actually be when it is built. What will the layout be like? How much wasted space will there be?
4. Building standards
All building work must comply with the New Zealand Building Code.
Check all the fixtures and fittings. Make sure that things like wardrobes, floor finishes, car parking, balconies and public spaces are up to standard.
Make sure the building is properly sound proofed.
Bruce Patten says a buyer may be able to choose some fixtures and fittings. So make sure those are of a good quality and fully functional.
5. Check the fine print of the contract
Mr Patten says the developers may have right to change the building plans. So a potential buyer needs to know this and understand what it means.
You want it to be clear what the developer can change. Make sure you preserve the right to get out of the contract and get your deposit back if there are significant changes.
You should also remember to check the body corporate and insurance costs, measurements, car parking and warranties.
6. Get your finances sorted
Bruce Patten says that before looking at apartments you should get financial pre-approval from a bank. Then make sure that it is renewed every 60 days or so. This is particularly important since the Reserve Bank told lenders to tighten the rules of making loans.