BPM's Questions To Ask A Developer

Market Insights
9 years ago
6 minutes

1. What is the property’s proximity to shops, cafes, supermarkets and schools?

Being informed about the neighbourhood your investment property is situated in means doing your research. For example, understand the area’s long-term supply and demand for property types like the one you are considering.

You should always endeavour to find out as much as you can to make a well- educated decision. Draw on the knowledge of your agent and the developer who will supply you with lots of useful information.

2. What are the property rates and services?

Local council or water authorities charge land owners to provide services to a property. Service facilities are utilities like pipes, conduits and mechanical services that keep the building running.

3. What is your stamp duty?

Stamp duty is added to the overall amount you’re paying for your investment property. It’s important to note that stamp duty legislation differs in each state and territory, and that specific legislation applies to your intended purchase as a result of its location.

  • Stamp duty in Victoria/Land transfer

When buying off the plan in Victoria, there are substantial stamp duty savings to be made compared to other states and territories.

It is based on land value at the date of purchase. You only pay stamp duty on the land value and the value of construction on the land at the time of sale (if any exists).

  • Stamp duty in New South Wales

In NSW, it is determined by the total purchase price. This factors in the land value, plus the price you paid for the apartment to be built.

  • Transfer duty in Queensland

Home transfer duty is calculated on a sliding scale based on the purchase price. Queensland offers duty concessions for first home purchases.

4. What is your sunset date?

Many off the plan contracts will negotiate a sunset clause. This clearly specifies a particular date or timeframe in which the vendor is required to complete the project. This contractual obligation ensures everyone knows what is expected of them throughout the course of the project.

Key benefits of a sunset clause:

  • It allows the developer or builder to achieve a certain level of presales.
  • It gives you a date when you, or the developer, can legally walk away from the contract. You can also retrieve your deposit if the project isnt completed on time.

5. Who keeps the interest on my deposit?

The developer usually receives interest on the deposit, though you may ask asking the sales consultant if you can receive the interest on the deposit.

6. Will you receive proof of progress?

To be sure that the project will commence on time, check that the developer has obtained all of the necessary approvals. If they haven’t done this, find out what still needs to be approved. Prior to signing contracts, have your solicitor or settlement agent check with the developer for a proof of purchase.

7. Are the rental guarantees inflated?

Buying an off the plan investment property means taking note of the high rental guarantees. They are often inflated above market value to encourage people to buy. Follow up on your suspicions of high rental guarantees by checking market rents in the area first.

Once the developer’s rental guarantee expires your rental return will reduce to market levels.

So remember, check market rents in the area you wish to buy to avoid paying too much.

8. What comes standard?

Before anything else, always ask: “What is included in this price?”

It definitely pays to ask lots of questions to determine exactly what features of the property are included in the listed price. Sometimes people are charged extra for things like car parking and air conditioning, which they assumed were included in the price of the apartment.

By checking the specifications in the Contract of Sale and always asking for a list of everything included in the price, you will know exactly what you are paying for.

9. Is it possible to make changes to my apartment?

Many developers are flexible with design changes, particularly prior to construction commencing. Remember to check if additional costs will apply.

10. How will your apartment differ from the display apartment?

Display suites usually show a level of finishes that are not always the standard applied to all apartments.

11. Has you property been measured correctly?

With an increase in construction costs, developers sometimes shrink apartments to keep them affordable. Checking room dimensions is imperative so that you don’t end up feeling cramped once you move in.

Be wary of how much space you need in your bedrooms:

 A double bed is at least 1.37m wide & 1.87m long
 A queen bed is at least 1.53m wide & 2.03m long.

Depending on whether you have a double or queen bed, allow for the room to be 2.7m deep and 2.9m wide. This gives you room to move, with the robe additional.

No one likes to feel as though their space is restricted, which is why checking ceiling heights is a must. Developers, in an attempt to fit in an extra level of apartments, frequently lower ceilings, making even the most spacious of rooms feel cramped. In living areas and bedrooms, ceiling heights should be a minimum of 2.55m.

12. Does the apartment building have suitable ventilation?

Have you ever visited an apartment building and noticed damp air or stale cooking smells in the shared corridors?

These smells linger due to the exhaust fans in the kitchen and bathroom not working properly to expel air out of the building. As a result, smells get recirculated and vented into shared spaces, like the access corridor. These smells unfortunately only become noticeable once a building has been inhabited for sometime.

To combat this, simply ask if your off the plan apartment’s exhaust fans are recirculating or exterior-venting. Note: it’s an exterior-venting exhaust fan that you’re after to avoid any unwanted smells!

13. Has the developer engaged a builder, and if so, who are they?

14. Does the development have the ability for Pay TV?

15. What is the building’s security like?

16. How high are the ceilings?

17. Are the glazing systems laminated or double glazed?

18. What is the building’s energy-efficient measures and rating?

19. Can the apartment be on-sold before completion?

20. Does my Contract Of Sale include the following?

  • A Certificate of Title
  • The subdivision plan
  • Development plans and planning permit
  • Building and Apartment Specifications
  • Owners Corporation rules, along with the compulsory annual fee estimate