5 Risks to Keep in Mind When Buying a New Property

Are you thinking of buying a brand-new property in Brisbane? It may sound like an attractive option, but it’s important to be aware of the potential risk that can come with it.

According to research, up to 20% of people who purchase a new home or land in South East Queensland will regret their decision within 12 months.

So, if you’re considering buying a brand-new property, read on and find out five reasons why it might not pay off in the long run.

Paying for Others’ Profit

When it comes to buying a brand-new house or land package in Brisbane, you’re not just paying for the property itself – you’re also contributing to the profits of everyone involved in the development process.

Every step in this process has a cost attached and every consultant, contractor or company engaged along the way will make a profit – meaning that hidden fees and unfair markups are added into your purchase price.

This can result in long-term costs which may not be obvious when you’re making the purchase, so it’s important to research all details thoroughly before committing.

Additionally, faulty materials or incomplete workmanship could be present in new properties due to rushed construction timelines, so always ensure that everything is checked properly prior to signing on the dotted line.

Low Capital Growth in New Property

It’s important to note that the capital growth of a new property can often be lower than expected due to the rapid depreciation of its building materials and slower appreciation of land value.

This is because, in most cases, land taxes associated with the purchase will add extra costs to buyers, as well as any cost overruns associated with the construction process.

Also, when it comes time for resale, real estate market influences such as buyer preference and availability of similar properties in close proximity can further reduce the potential capital growth from these new properties.

Uncertainty in Quality and Building Issues

You can’t be sure of the quality of a new house and land package, so it’s important to do research on the builder in order to avoid any nasty surprises that could sink your investment.

You should look into the builder’s construction standards, check for any design flaws or overpricing, and understand what kind of community development they are involved with. It’s also essential to check what kind of reputation the developer has in terms of quality and value for money before signing any contracts.

Furthermore, you should also get legal advice to ensure that all documents are in order before signing off on the purchase. Buying a brand-new property is an exciting venture, but one must always be aware of potential pitfalls that may arise from uncertain quality and building issues.

Lastly, ensure that there are warranties or guarantees available from the builder so that you are fully protected should any issues arise with your property once built.

Unknown Surrounding Neighbourhood

Don’t get caught out by the unknown when buying a brand-new property – be sure to research the neighbourhood and future development. Also considering land values in neighbouring areas can help you determine if you are getting a good deal or not.

Before committing to a new home purchase, it is important for buyers to consider the potential of hidden costs. It is recommended to look into the amenities near the area, such as parks or public transport options, as well as researching construction costs in order to understand how much you will be paying for your property.

Higher Risk of Settlement Default

When buying a brand-new house and land package, it’s important to be conscious of the higher risk of settlement default, as it can leave buyers in a difficult financial situation – similar to being caught in quicksand.

For example, one homebuyer found themselves over $20,000 short when a pre-settlement valuation came back lower than expected.

This could mean increased costs due to delayed completion or even longer contracts with unreliable builders. It may also result in increased maintenance costs due to the age and quality of materials used in the construction process.

Therefore, it’s essential that you understand this risk before committing to purchase so that you can protect yourself from unexpected expenses and potential financial losses further down the line.

Extra: Consult a Buyer’s Agent

Navigating the challenges of buying a new property can be a daunting task, but fortunately, there is help available.

A buyer’s agent can be your trusted guide throughout the entire process, ensuring you make informed decisions and avoid costly mistakes.

By leveraging their expertise and industry knowledge, a buyer’s agent can help you uncover hidden costs, negotiate better terms, and identify potential issues with the property or development.

Sam, our indepenent buyer’s agent, is ready to assist you! With years of experience in the real estate market, Sam understands the intricacies of buying new property and can provide valuable insights tailored to your specific needs.

Whether you’re concerned about paying for others’ profit, uncertain about the quality and building issues, or want to mitigate the risk of settlement default, Sam can guide you through the process.

Don’t navigate the complexities of buying new property alone. Contact Sam today on 0430 521 501 for a free consultation and let Sam help you make a well-informed decision that will pay off in the long run.