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Frequently Asked Questions

All

Why should I buy off the plan?

The opportunity to buy off the plan property is always exciting, particularly when you have the ability to add your own tastes and designs. Around the location of Marshall White Offices, namely Boorondara, Stonnington and Bayside, apartments and townhomes are typically an affordable entry into these coveted areas, where the median house price is often out of reach for singles or professional couples. Also, depending on your status as either a first home buyer or owner occupier, there can significant stamp duty savings for buying prior to construction commencing or even during. Discuss your own particular situation with your legal professional or tax advisor.

Why should I get in early with regards to buying within a development?

It’s not unusual that popular projects will have one or two price increases during the selling period. We recommend speaking to our Marshall White Projects sales people as soon as you become aware of a new project launching and reserve your prime position at one of our many VIP launch weekends throughout the year.

Can I have a floor plan with dimensions included in the Contract?

Floor plans received from Marshall White Projects will have a scale allowing you to measure off room sizes, ensuring your chosen off the plan purchase is adequately equipped to meet your buying requirements. The Contract of Sale will also include a copy of this, along with the Plan of Subdivision.

What changes can I make to my apartment or townhome?

Most developments (particularly boutique in size) will allow a purchaser to make a limited number of changes, affording you the opportunity to bespoke your purchase to your own taste and designs. Be careful however, as not all developments will allow changes so it’s important you discuss your options with the selling sales person prior to entering into a Contract of Sale. Permissible changes will usually be either be cost neutral (i.e. substituting “like for like”) or at the purchasers cost for their requested upgrades.

How do I know what I see in the pictures will match reality?

Good developers know that any imagery shown on a render or within their promotional material must be an accurate reflection of the finished product. The Contract of Sale you approve includes a list of specifications for your property. It’s worth noting that whilst these may not include brand model numbers, as the specific model will usually be updated by a supplier every 12 months, the brand names and an image should be detailed. There is a substitution clause within most off the plan contracts of sale, allowing the developer to provide you with “like for like” if necessary. The developer or Project Manager should advise you if this occurs during the construction period.

What are the inclusions?

All inclusions are detailed within the Contract of Sale. You should check these carefully prior to proceeding, ensuring the expected inclusions are detailed. Typically, items such as curtains or blinds and washer/dryers are not included for an off the plan sale.

What’s the legal process when buying off the plan?

We recommend receiving advice from your own legal professional. Purchasing off the plan can be a relatively straight forward process if you’re fully informed from the start.

Where does my deposit go and who gets the interest?

Your agreed deposit (cash) will be held in trust by the vendor’s legal representative with accrued interest then being paid to the vendor at settlement. Some developers may consider a shared arrangement which should be discussed with your Marshall White Project sales agent at the time you’re ready to proceed. Once the initial deposit is paid (as per the Contract of Sale), there are no additional progress payments required until the balance of the purchase price is remitted at settlement.

What's the sunset clause or registration period?

Most off the plan Contracts of Sale will have a “sunset clause” or “registration period” which defines the length of time where both the vendor and purchaser are bound to the Contract of Sale. Usually this period ranges anywhere from 24 to 60 months. Whilst this period is typically longer than the actual construction period, these conditions are often a requirement of the developers funder’s lending policy, to cover them in the event of a supervening event (floods, earth quake and natural disaster etc).

The Victorian Government recently passed new laws that removed the ability of developers to use sunset clauses to intentionally delay building projects in order to cancel signed contracts using an existing sunset clause, and then re-sell the property at a higher price.

Any buyer who is unsure whether the new laws apply to their specific contract and circumstances should seek their own legal advice.

What happens if there is a delay?

Delays to construction commencing can happen for a number of reasons. Typically, it’s as a result of continued inclement weather, council or planning requirements or perhaps the developer was unable to commence immediately owing to insufficient sales and as a result hadn’t satisfied the criteria for a construction loan. So, it’s prudent to ask an agent is there sufficient sales to start building, if so, when is construction anticipated starting and more importantly completing?

What are the Owners Corporation fees?

The owner corporation’s fees are determined by the owner’s corporation manager. Before proceeding these estimated quarterly amounts should be provided to you by your Marshall White Projects salesperson, which set out your contribution to communal items and the ongoing maintenance of the common areas, building and public liability insurance. Note, these fees won’t be applicable until settlement has taken place.

What’s a cooling off period?

Any Contract of Sale for residential property (including an off the plan purchase) provides the purchaser (only) with a three day cooling off period. This is three clear business days, expiring at midnight on the third working day. You should be aware however, there is a penalty of 0.2% of the purchase price given to the vendor should you subsequently withdraw (in writing) after the Contracts have exchanged. It’s always prudent to do your homework before entering into a Contract of Sale.

I heard the developer can change anything without my consent?

Before proceeding with any off the plan purchase it’s a good idea to obtain prior advice on the rights and responsibilities afforded to you within any off the plan Contract of Sale. As an example, changes such as an alteration to a plan of sub division affecting common areas must now be bought to your attention prior to the settlement period. Speak to your legal professional first.

What happens if the market falls or interest rates rise?

Whilst we are now enjoying a real estate market of relative stability, there are no guarantees of any markets continued growth during your building’s construction. In an environment of market decline or a rise in interest rates, you are still expected to complete your purchase at settlement. Should this create difficulties, then it’s crucial you speak to your Marshall White Projects sales representative at an early date to discuss alternative finance arrangements or to your legal representative regarding your options in either nominating your sale and your continued legal obligation under the original Contract of Sale.

What happens If my circumstances change and I have to nominate my off the plan purchase?

A nominee sale can provide an option for someone who has purchased a property but cannot settle on it, to find another buyer to step in and have the contract transferred to their name (nominee) in order to complete settlement.

We know most purchasers who enter into a contract of sale to purchase off the plan property rarely believe that they will not be able or to go through to settlement and move into or lease their new property.

It’s worth noting that there has always been a Common Law right to nominate independent of any contractual right. A purchaser however remains liable under a nominated contract with the nominee merely being permitted to exercise the purchaser’s rights.

We always recommend that purchasers obtain advice from their legal representative about whether nominating an alternative purchaser under a contract of sale is the right move for them, and how the nomination can protect their interests.

Is there cladding used on my building?

Prior to proceeding talk to us about this very relevant issue and ask if cladding is to used on your building – this may include the use of aluminium composite panels (ACP) or expanded polystyrene (EPS)

We ask all of our developer clients to provide us with full details of their development prior to going to the market place.

What happens in the unlikely event my bank valuation is less than my purchase price?

With off-the-plan apartments and townhouses property values may vary during the construction period. If they do, the bank valuation may be lower than your purchase price.

So, what are your options?

a. Dispute the original valuation;

You can dispute the valuer’s original findings by providing evidence of sales of similar properties in the area.

b. Request a valuation from a different valuer;

You can ask that lender use another valuer on its panel to perform a valuation. Most lenders will have a panel of valuation firms or valuers. A different valuer could provide a different result.

c. Cover the shortfall from somewhere else;

If a new valuation fails to resolve the problem, you might have to look elsewhere to secure funds to cover the shortfall, whether it’s borrowing from a family member or securing a personal loan.

d. Or get another lender;

Going down this path needs to happen quickly as often the time between the valuer being allowed onto the site and then you been called to settle could be a matter of weeks, not months

Thankfully in the coveted locations we offer off the plan property, a low valuation is an infrequent occurrence.

What should you pay in stamp duty?

It was 1991 and Kerry Packer said at a Senate Committee, in regards to taxes “ As a government (at the time) you’re not spending it that well that we should be donating extra”!

Duty’s and taxes are a necessity for owning property and buying off the plan is typically no exception.

It is important however that you understand all the tax and duty benefits available to you for an off the plan purchase, applicable to your own individual circumstances.

REA provide a summary of the link below;

https://www.realestate.com.au/home-loans/how-much-is-stamp-duty-in-victoria 

Again, speak to your own legal representative or tax professional to find what’s right for you.

When do I secure my finance?

Well before entering into a Contract of Sale for an off the plan purchase, you should discuss your individual financing requirements with your preferred lender and/or broker. Marshall White Projects can also assist with recommendations for finance, allowing you to secure an option best suited to your needs. Usually three to four months away from a forecast completion date you should again speak to your lender ensuring they are ready to assist you in meeting your settlement commitments.

What are depreciation benefits?

Depreciation benefits are only applicable for investors. A quantity surveyor will prepare a depreciation schedule, allowing significant depreciation benefits to be then offset against your taxable income. For advice relative to your own personal circumstances we recommended speaking to your tax professional.

What am I entitled to as a first home buyer?

For Contracts entered into for buying or building a new home valued up to $750,000 on and from 1 July 2017 until 30 June 2020, you may be eligible for a First Home Owner Grant (FHOG).

 

(With an off the plan property, the total Contract price must not exceed $750,000 to be eligible).

If you are eligible for the FHOG and the home you are buying is in regional Victoria, you may receive $20,000. If the home is not in regional Victoria, the grant is $10,000.

Your new home can be a house, townhouse, apartment, unit or similar, but it must be valued at $750,000 or less and be the first sale of the property as residential premises. It cannot be an investment property or a holiday house.

However, for the stamp duty exemption/concession this is determined by the dutiable value for an off the plan property (the dutiable value is the contract price minus the construction or refurbishment costs incurred on or after the contract date). The dutiable value must be below $600,000 for the exemption, and a first home buyer duty concession is also available for a principle place of residence with a dutiable value from $600,001 to $750,000.

For further information, please visit www.sro.vic.gov.au/first-home-owner

What’s the process leading up to settlement?

A project manager or developer should send out regular construction updates during your new property’s construction period. Alternatively, you may be directed to the developers dedicated website with information and pictures of your new purchase under construction. A summary of all of our projects under construction can now be viewed by clicking on https://www.marshallwhiteprojects.com.au/projects/construction-updates/  .It is important that you have your finance in place at an early date and respond promptly to a request for a final inspection from either the developer or the developer’s appointed settlement company.

Government Incentives for Property Buyers & Sellers

The federal government offers incentives to first home buyers and downsizers to help with their property decisions. We encourage you to familiarise yourself with this information in order to better assist your clients.

First Home Super Saver Scheme (FHSSS)

The FHSSS helps Australians boost their savings for a first home by allowing them to build a deposit inside superannuation.

From 1 July 2017, you can make voluntary concessional (before-tax) and voluntary non-concessional (after-tax) contributions into your super fund to save for a first home.
From 1 July 2018, you can then apply to release your voluntary contributions, along with associated earnings, to help you purchase your first home. Find out more

Downsizer superannuation contributions

Since 1 July 2018, eligible older Australians wishing to downsize have been able to contribute up to $300,000 into superannuation from the sale of their home. Existing contribution caps and restrictions will not apply to the downsizer contribution. This measure endeavours to free up larger homes for growing families. Find out more

First Home Loan Deposit Scheme

From 1 January 2020, eligible Australian first home buyers with a 5% deposit can get home loans without lenders mortgage insurance (LMI) through a government scheme.

The federal government’s First Home Loan Deposit Scheme will guarantee mortgages for first home buyers who have only saved a 5% deposit, effectively helping them buy sooner without paying lenders mortgage insurance premiums.

  • If you’ve saved 5% of the purchase price of your property the government will guarantee the remaining 15% of the deposit.
  • You will still need to borrow 95%, but you can avoid LMI.
  • Eligible first home buyers can’t be earning more than $125,000 a year ($200,000 for couples).
  • Access to the scheme is limited to 10,000 borrowers.
  • The value of eligible homes under the scheme will vary by region.
  • The scheme starts on 1 January 2020.
  • This scheme will make low deposit home loans The scheme will be administered through the National Housing Finance and Investment Corporation(NHFIC) in partnership with lenders. In an announcement, the government said it would prioritise “smaller lenders to boost competition”.
  • 5% deposit home loans already exist, but you generally need to pay LMI when borrowing more than 80% of a property’s value.
  • LMI can be expensive. If you bought a $400,000 property with a 5% deposit ($20,000) you’d be looking at a $12,768 LMI premium. That’s an estimate taken from Genworth’s LMI premium estimator.
  • You will need to be a first home buyer (and if you own an investment property you won’t be eligible) earning $125,000 ($200,000 for a couple) a year or less.
  • Having negative equity makes it harder to sellyour property or refinance. But if you keep paying off the loan principal and property prices rise you will be OK in the long run.

Are there other government schemes to help me buy a home?

At the state and territory level most governments offer:

  • First home owner grants. This is a grant of money that can be used towards your purchase and is often reserved for first home buyers purchasing newly built properties.
  • Stamp duty concessions. Many governments waive or discount stamp duty for first home buyers, removing one of the bigger property costs.

Downsizers

Can I bring my pet to my new home?

Most contracts of sales will have a clause referring to the provisions of an animal occupying a group of apartments or townhome.

It’s work noting that Owners Corporations are limited in their scope to ban pets – and even when rules have been made to ban them, they have been struck down by VCAT.

Speak to your legal professional if you’re unsure.

Whom am I living with?

Most downsizers will prefer to see ‘like-minded’ people sharing their new building with them.

Not surprisingly, often the higher the average sale price within a building, the higher the percentage of owner occupiers.

Whilst there are no guarantee’s with regards to past and present performance, throughout 2019, 87% of all properties sold through Marshall White Projects, were to purchaser intending to owner occupy.

When do I sell my family home?

Many of our downsizers are in the fortunate position of determining their own timing with regards to finally moving from their family home.

Those buyers who are risk adverse may choose to sell within the same market they bought in and then willingly make two moves.

Others will follow their new homes progress on our construction portal and attempt to coincide settling one and then at the same time move from the family residence.

Talk to one of our residential experts with regards to a market appraisal and current market conditions.

Our concierge (details below) would be very pleased to put you in touch with the correct market expert for your area.

Who’s the appointed builder?

Often for a particular project our vendors are developers rather than builders, so a builder then needs to be appointed.

Regularly the tender process for a builder’s appointment runs consecutively with a projects launch to the market.

Then, upon a builders appointment the developer may then have sufficient pre sales to qualify for a construction loan, allowing the building to start without a length delay.

Ask to see the panel of builders on the tender list and do your homework by looking at their experience either online or directly within the marketplace.

First Home Buyers

What am I entitled to as a first home buyer?

For Contracts entered into for buying or building a new home valued up to $750,000 on and from 1 July 2017 until 30 June 2020, you may be eligible for a First Home Owner Grant (FHOG).

 

(With an off the plan property, the total Contract price must not exceed $750,000 to be eligible).

If you are eligible for the FHOG and the home you are buying is in regional Victoria, you may receive $20,000. If the home is not in regional Victoria, the grant is $10,000.

Your new home can be a house, townhouse, apartment, unit or similar, but it must be valued at $750,000 or less and be the first sale of the property as residential premises. It cannot be an investment property or a holiday house.

However, for the stamp duty exemption/concession this is determined by the dutiable value for an off the plan property (the dutiable value is the contract price minus the construction or refurbishment costs incurred on or after the contract date). The dutiable value must be below $600,000 for the exemption, and a first home buyer duty concession is also available for a principle place of residence with a dutiable value from $600,001 to $750,000.

Government Incentives for Property Buyers & Sellers

The federal government offers incentives to first home buyers and downsizers to help with their property decisions. We encourage you to familiarise yourself with this information in order to better assist your clients.

 

First Home Super Saver Scheme (FHSSS)

 

The FHSSS helps Australians boost their savings for a first home by allowing them to build a deposit inside superannuation.

From 1 July 2017, you can make voluntary concessional (before-tax) and voluntary non-concessional (after-tax) contributions into your super fund to save for a first home.

From 1 July 2018, you can then apply to release your voluntary contributions, along with associated earnings, to help you purchase your first home. Find out more

Downsizer superannuation contributions

Since 1 July 2018, eligible older Australians wishing to downsize have been able to contribute up to $300,000 into superannuation from the sale of their home. Existing contribution caps and restrictions will not apply to the downsizer contribution. This measure endeavours to free up larger homes for growing families. Find out more

Fist Home Loan Deposit Scheme

From 1 January 2020, eligible Australian first home buyers with a 5% deposit can get home loans without lenders mortgage insurance (LMI) through a government scheme.

The federal government’s First Home Loan Deposit Scheme will guarantee mortgages for first home buyers who have only saved a 5% deposit, effectively helping them buy sooner without paying lenders mortgage insurance premiums.

  • If you’ve saved 5% of the purchase price of your property the government will guarantee the remaining 15% of the deposit.
  • You will still need to borrow 95%, but you can avoid LMI.
  • Eligible first home buyers can’t be earning more than $125,000 a year ($200,000 for couples).
  • Access to the scheme is limited to 10,000 borrowers.
  • The value of eligible homes under the scheme will vary by region.
  • The scheme starts on 1 January 2020.
  • This scheme will make low deposit home loansThe scheme will be administered through the National Housing Finance and Investment Corporation(NHFIC) in partnership with lenders. In an announcement, the government said it would prioritise “smaller lenders to boost competition”.
  • 5% deposit home loans already exist, but you generally need to pay LMI when borrowing more than 80% of a property’s value.
  • LMI can be expensive. If you bought a $400,000 property with a 5% deposit ($20,000) you’d be looking at a $12,768 LMI premium. That’s an estimate taken from Genworth’s LMI premium estimator.
  • You will need to be a first home buyer (and if you own an investment property you won’t be eligible) earning $125,000 ($200,000 for a couple) a year or less.
  • Having negative equity makes it harder to sellyour property or refinance. But if you keep paying off the loan principal and property prices rise you will be OK in the long run.

Are there other government schemes to help me buy a home?
At the state and territory level most governments offer:

  • First home owner grants. This is a grant of money that can be used towards your purchase and is often reserved for first home buyers purchasing newly built properties.

Stamp duty concessions. Many governments waive or discount stamp duty for first home buyers, removing one of the bigger property costs.

Investors

What are depreciation benefits?

Depreciation benefits are only applicable for investors. A quantity surveyor will prepare a depreciation schedule, then potentially allowing significant depreciation benefits to be then offset against your taxable income. For advice relative to your own personal circumstances we recommended speaking to your tax professional.

What’s a rental guarantee?

Whilst they can vary, typically under a guaranteed rent arrangement the landlord signs over your property to a company or letting agent for a specified period of time, in return for providing you a guaranteed income.

A Guaranteed Rental Return (GRR) is a future rental income that is guaranteed by the developer or management company to the property purchaser for a contracted period (typically for one to two years)

Usually the agreed rental amount will be paid into the investor’s bank account immediately after the property settles.

Potentially you can receive rent from day one, even when there is no tenant. It also get you past the competition of other rental properties within the same building hitting the leasing market all at the same time, then it’s whoever has the best offer gets the tenant.

Speak to your Marshall White Project salesperson as to what’s on offer

What’s my anticipated rental income?

Your Marshall White salesperson will provide you with a forecast rental appraisal for your off the plan property.

It’s worth remembering that these estimates are at today’s market value and may vary at settlement.

It’s worth checking in during construction with our rental department and learn firsthand what the rental market is doing in your area.

By now our current clients and customers will be aware of the services provided by our Marshall White Project’s Concierge.

Amy’s available 9:30am to 4:30pm Tuesdays and Thursday and 9:30am to 3:00pm Fridays on (03) 9832 1278 or alternatively via email amy.bennison@marshallwhite.com.au

Please feel free to contact us at any time, allowing us to assist with your off the plan purchasing requirements.

Contact Us

Address: 1111 High Street Armadale VIC 3143

Phone: +61 3 9832 1197
Email: Georgie.Lupson@marshallwhite.com.au

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