Buying From A Developer
Who hasn’t been interrupted during dinner by someone calling to invite you to a seminar to ‘show you how you can save tax’ or ‘provide information on investing’ which is reality a dressed up property sales seminar.
Many property developers, particularly those with large developments will use a marketing company to sell the properties, more often than not through these seminars. These marketers are generally not real estate agents. They are contracted to sell the properties and their fee/commission is built in to the price of each property. They are largely unregulated and they do not have to disclose these costs to you. This can mean that a property is most likely selling for a lot more than its actual value.
With new developments it difficult to know whether the property is well priced. After all, each property is somewhat unique. One thing is for sure, the more the marketing hype, the more the advertising and glossy brochures, the greater is the cost to the purchaser.
As the true value is less than the purchase price, it will therefore take some time before the property rises by enough for the investor to make any money.
POSTED: 20-Jul-2009