Susie made an offer on an apartment in 2007 off plans (ie: yet to be built) that was too good to be true.  The deal was advertised as an easy way for a shrewd investor to buy now and sell before settlement, and make $20,000 – $40,000, which Susie intended to do. No deposit was required, just a bond of 10% of the purchase price.  Susie didn’t even do any investigations before she signed; she made an unconditional offer.

When the time came to settle in 2011, the market had plummeted and the price she could sell for was well below what she had agreed to pay. This was caused in part by economic conditions but also due to tax changes.

There were many other people in the same situation, which also meant a surplus of properties for rent, which sent rents plummeting.   Susie certainly wasn’t going to be able to make a quick profit, and had to consider whether to walk away from the bond and face being sued by the developer, or continue with the purchase and hope to find a tenant, or even move in herself.  She decided her best option in the circumstances was to live in the property herself for a period.

When buying off plans it is important to do all your homework, hasten slowly, and take professional advice to reduce the chances of getting caught out.