Ki Residences Floor Plan – Enjoy All The Bordering Services..

What is ‘off the Plan’? Off the plan is when a builder/developer is constructing a set of units/apartments and will look to pre-sell some or all of the apartments before construction has even began. This kind of purchase is call buying off plan as the buyer is basing the decision to purchase based on the plans and drawings.

The typical transaction is really a deposit of 5-10% will likely be paid at the time of signing the contract. No other payments are essential whatsoever until construction is finished upon that the balance in the funds must complete the acquisition. The amount of time from signing from the contract to completion can be any amount of time really but generally no more than 24 months.

What are the positives to buying Ki Residences Off the plan? Off the plan properties are marketed heavily to Singaporean expats and interstate buyers. The main reason why many expats will purchase Off the plan is it takes many of the stress from choosing a property back in Singapore to buy. Since the apartment is completely new there is absolutely no must physically inspect the web page and customarily the location will certainly be a good location close for all amenities. Other benefits of purchasing Off the plan include;

1) Leaseback: Some developers will offer you a rental guarantee to get a couple of years post completion to provide the buyer with comfort around prices,

2) In a rising property market it is not uncommon for the price of the apartment to boost causing a great return. When the deposit the customer put down was 10% and also the apartment increased by 10% on the 2 year construction period – the purchaser has seen a 100% return on their own money as there are hardly any other costs involved like interest payments etc within the 2 year construction phase. It is far from uncommon for a buyer to on-sell the apartment just before completion turning a fast profit,

3) Taxation benefits who go with purchasing Ki Residences Floor Plan. These are generally some great benefits and in a rising market purchasing Off the plan can be a great investment.

Do you know the negatives to buying a house Off the plan? The key risk in purchasing Off the plan is obtaining finance for this particular purchase. No lender will issue an unconditional finance approval for an indefinite period of time. Yes, some lenders will approve finance for Off the plan purchases but they will always be subject to final valuation and verification in the applicants financial circumstances.

The highest time period a lender will hold open finance approval is half a year. Because of this it is really not possible to arrange finance before signing a legal contract with an Off the plan purchase as any approval would have long expired when settlement is due. The risk here is that the bank may decline the finance when settlement is due for one of the following reasons:

1) Valuations have fallen therefore the property may be worth under the initial purchase price,

2) Credit policy has evolved leading to the property or purchaser will no longer meeting bank lending criteria,

3) Interest rates or even the Singaporean dollar has risen resulting in the borrower no more having the ability to pay the repayments.

The inability to finance the balance of the purchase price on settlement can result in the borrower forfeiting their deposit AND potentially being sued for damages if the developer sell the property cheaper than the agreed purchase price.

Examples of the above risks materialising during 2010 throughout the GFC: Through the global economic crisis banks around Australia tightened their credit lending policy. There was many examples where applicants had purchased Off the plan with settlement imminent but no lender willing to finance the balance of the purchase price. Here are two examples:

1) Singaporean citizen residing in Indonesia purchased an Off the plan property in Singapore in 2008. Completion was due in September 2009. The apartment was a studio apartment with an internal space of 30sqm. Lending policy in 2008 ahead of the GFC permitted lending on this kind of unit to 80% LVR so just a 20% deposit plus costs was required. However, after the GFC the banks begun to tighten up their lending policy on these small units with many lenders refusing to lend at all while some wanted a 50% deposit. This purchaser did not have enough savings to pay for a 50% deposit so had to forfeit his deposit.

2) Foreign citizen residing in Australia had purchase Jadescape Off the plan in 2009. Settlement due April 2011. Purchase price was $408,000. Bank conducted a valuation and the valuation started in at $355,000, some $53,000 underneath the purchase price. Lender would only lend 80% of the valuation being 80% of $355,000 requiring the purchaser to set in a bigger deposit than he had otherwise budgeted for.

Must I buy an Off the Plan Property? The author recommends that Singaporean citizens living overseas considering purchasing an Off the plan apartment should only do this when they are in a strong financial position. Ideally they could have a minimum of a 20% deposit plus costs. Before agreeing to get an Off the plan unit one should contact whmrna specialised mortgage broker to verify that they currently meet home loan lending policy and really should also consult their solicitor/conveyancer before fully committing.

Off the plan purchasers can be great investments with a lot of many investors doing very well out of the buying of these properties. There are however downsides and risks to buying Off the plan which must be considered before committing to the purchase.