Buying a new condo is a completely different process from buying a previously owned property.
The most tangible asset on which to make a judgment is the land component. All you have to go on is a floor plan, scale models, photographic simulations and the reputation of the construction company. So, sometimes the whole process can feel like a leap of faith.
Here are some questions to ask before committing:
Does the construction have planning approval?
Some developers try to make some sales before moving ahead with the expense of obtaining approvals. If no approval exists, then there’s a large element of fiction at play. There can be no guarantee construction will go ahead, or even look like the building being promised. If there’s no approval, move on.
Is this a fixed price contract?
Normally it is, but it remains an essential question. Ask your lawyer to check the contract to make sure there are no additional costs, especially during the construction period. Try to use a legal adviser who has experience with the property law or new developments in general.
What does the price include?
Make sure that fitted kitchens, bathroom fixtures and anything else that you are promised is included in the contract. Again, legal advice is essential to verify everything you are promised.
What’s the component of land in the price?
To make sure you’re making a sound investment, find out what portion of the price is made up of the land value. Remember, land is an appreciating asset while structures depreciate in value. Also, it’s the land value that attracts the most fees and charges. This gets complex, so ask your lawyer for guidance. Consider using an independent valuer to validate the developer’s claims.
Will my condo be like the picture in the brochure?
This is a reasonable expectation. And again, the answer should be ‘yes’. You should do research on the construction company and find out what other projects they have undertaken and whether there was any trouble with them. Sometimes, a contract will state a developer can swap out one product for another in the event of unavailability. A lawyer can assist you in gauging the risk factor here.
Can I visit the construction site or a previous development?
The answer will depend on the developer and the state of the construction site. However, this is a reasonable request. A tour of a previous development should be possible and probably more informative in terms of understanding the value for money a developer delivers.
Can I change anything to suit my tastes?
There is no harm in asking whether selecting your own fixtures and fittings is an option. A developer will buy these in bulk to contain costs. Therefore, the fixtures are either locked in, or you’ll be given a limited choice. Get legal advice on where you stand on this, and ensure the contract covers inclusions and their warranties.
Where do I stand if construction is altered from the original plan?
It’s a fair question to ask of a developer, but a better answer will come from your lawyer’s reading of the contract.
When will you finish, and when do I pay?
Smaller projects tend to complete more quickly than major constructions that include rooftop gardens, swimming pool and so on. A formal date will be stated in the contract. Once the building is complete, however, you will need to close to take ownership. If you require finance, a developer will expect this to be arranged within 30 days of a deposit being paid.
Can I re-sell my commitment?
Sometimes, your situation changes. A job transfer, for example, can mean the condo is no longer practical or wanted. Check whether on-selling is permitted in the contract. Again, seek legal advice to determine your options.