The Property Planner, Buyer and Professor take a deep dive into the risks of purchasing off the plan. Because the risks are many and varied, this will be a two-part episode with an episode solely on financial risks to come next week! In this episode David Johnston, Cate Bakos and Peter Koulizos take you through: 1. Pros of purchasing off the plan - for a balanced view, we take you through the advantages of purchasing off the plan. Following the pro's, we then detail the risks that buyers need to be aware of. 2. Risks of buying a property that doesn't exist. You may be able to visit a display home, but often you are looking at plans, dioramas and drawings - and unless you are an architect or builder, it can be quite difficult to visualise the end product. 3. Alterations to the property without your consent. The contract will normally allow the developer to make changes to the property within a certain percentage of variance, and without your approval. Often this results in unexpected changes/reductions in floor area to the plans, specifications or differences in the quality of the final finishes. 4. Lenders may not accept the property as security if the alterations cause the square metreage to fall beneath their prescribed level. 5. Contracts often favour the developer and the build completion almost never runs on time. 6. The timeline to settlement is uncertain and you could be waiting between 12 to 48 months. In the meantime, your lifestyle, financial position, lender policy, property value and the market could change. The lost opportunity is pertinent if the project is cancelled or builder becomes insolvent. 7. The value of the property can fall before settlement, and combined with a large number of off the plan purchases being overpriced from the start, valuations coming in lower than the purchase price can cause significant out of pocket expenses. 8. Limited recourse against the builder in the event of a dispute, your contract of purchase is with the developer and not the builder. 9. Are you dealing with a spruiker or an independent advisor? Is the person selling the property receiving an income from the developer for the sale? Beware of spruikers masquerading as advisors! 10. And of course, our 'gold nuggets' Visit the show notes - https://bit.ly/2OIrp9x