First home buyer considering OTP purchase in Melbourne

You can try an alternative to a limited extent, but as Y-man indicated many lenders go through the same portal to obtain valuations. Duplicate valuations do get flagged. In my experience, it's about 30% that a second valuation would would be similar to the first anyway. When two different valuers agree with each other, it's unlikely that a third will think too differently.

I've also used things like family pledges or cash gifts to get around this sort of problem. This isn't available to everyone though.

 

I feel like it's not worth the risk.

Fair point. But I have some basic requirements that I cannot sacrifice. Like I said, I'm planning to live in the property for the next 5-6 years so have to find the right balance.

 

Seems only reasonable to stay away from OTP. Wondering if I should take the plunge and come back here one year later with my experience
It's surprising though that I have heard very few positive experiences. It could be because people only post on forums when they have negative experiences ?

 

I wouldn't say it's not worth buying OTP. I'm currently waiting for settlement on an OTP commercial property. The difference is that I'm able to throw a lot of cash at the purchase.

The key is risk mitigation. There's a few things you can do to protect yourself:

1. Having extra cash available can solve a lot of problems. Probably not very helpful info in this case as your major reasoning is to have lower upfront costs.

2. Pay fair market value. What are other properties on the open market currently selling for. Specifically similar properties that have actually sold, that are not OTP. People often pay a premium for brand new properties, and that's what gets them into trouble.

 

Thanks. 5% devaluation is all the extra cash I can afford.

So during valuation, do they consider that a brand new property is slightly more in worth? Or that's not even a consideration? I can tell you right away that older 2 bed apartments are selling at slightly lesser value (~30k) than what this new apartment is priced at.

 

Thanks. Last questions -
Can you take a personal loan and compensate the shortfall during settlement? My borrowing capacity is not an issue.
Also is there anything I can do in my contract to be safe? I've read that generally you can't add many clauses in your OTP contract to save your ass

 

Don't come back in a year. Stay! I was in a similar boat as you when I bought my first place. Hanging out on these forums easily saved me over 100k....

Forget this particular OTP...read this forum for the next few months, then make a move. You'll be very glad you did.

 

If your serviceability allows the personal loan, you probably can use this to make up the difference. Personal loans have a significant impact on serviceability, so don't just assume that your own numbers will be okay.

You should get a conveyancer or solicitor to read through the contract before signing it, but OTP contracts aren't very flexible.

 

They are flexible for the builder, allowing variation in proposed size of unit etc, I think i read on here that a builder was able to get another unit in on the floor buy reducing everyone's apartment size, etc