Off the plan buyers losing money with ‘Sunset clause’

More and more NSW off the plan developments are in the news, with buyers made to make additional payments to secure the property, when developers rescind the contract under a 'sunset clause'. Sunset clause allows for either the buyer or the developer to pull out of the contract, if the completion date is not met within a given time period.

There are reports that once rescinded, same properties get advertised back on the market at a higher price to increase the profit margin of the developer.

This can leave the buyers at a disadvantage at times when property prices go up, as their deposit money get tied up for a long period, and they will be required to come up with a higher deposit than previous time to secure a similar property.

Buying off the plan is a risky and speculative investment strategy and if you plan to buy property off the plan, make sure that you consult a property lawyer, as off the plan contracts can greatly favour the developer.

Australian Property Selectors do not buy off the plan properties, but use more effective and safe strategies like buying existing cheaper properties that are located close proximity to new developments.

Good read below from CM Lawyers on - what should be checked before buying off the plan property?

http://www.news.com.au/finance/real-estate/why-you-should-always-read-the-fine-print-developers-demand-1m-from-first-home-buyers/story-fndban6l-1227233970770