Buying off-plan: here’s what you need to know

Buying a property off-plan is an attractive option for a number of reasons, including the fact that it’s possible to select the size, style and finishes of a new home. However, as with any large financial investment, there are potential drawbacks buyers need to be aware of. 
“Buying off-plan is especially attractive to first time buyers as there’s no transfer duty (VAT’s included in the price) and most people struggle to save up the deposit to purchase a home. Not having to bear this additional cost makes it considerably more affordable”, explains Bruce Swain, MD of Leapfrog Property Group, “That being said, as with any property purchase, I would caution buyers to do their homework about the developer, the builder and to read the fine print as it is possible to buy a lemon – albeit a brand new one”.
Checklist for Buying Off-Plan

The reputation of the developer and or builder
“The first thing I’d recommend buyers look into is the developer’s track record – has the company successfully completed previous projects? Have they done so in a timely fashion? Is the developer and the builder the same person or company? If not, then look into the builder’s work as well”, advises Swain.
When looking into the reputation of the developers and builders involved, buyers are advised to establish whether they are registered with either Master Builders South Africa or the National Home Builders
Registration Council.
Inspect the demo model
Swain continues to indicate that it’s important to inspect a demo unit as artistic renders and sketches don’t necessarily translate into real life – spending time going through the model property will enable buyers to expect the quality of the workmanship and materials in person.
Stay on top of the building process
“It’s critical to enquire about the materials that will be used in a buyer’s property as it may differ from the demo model’s in some respects. Buyers also need to take note that the majority of building agreements will allow the developer to deviate from the plans by between 5% and 10% without having to consult the buyer. If buyers don’t stay on top of the building process they could well find themselves with a property that’s different to their specifications in a number of ways”, cautions Swain.
Read the fine print
Smith Tabata Buchanan Boyes explains that when purchasing a stand in a sectional title or estate development the standard contract provides that the landowner needs to erect their property within a stipulated period, failing which the homeowner’s association (HOA) may impose a penalty. “This ensures that the development reaches its investment value within anticipated time frames and safeguards other owners from the implications of continuous building operations. The period generally ranges from one to five years.”
“It’s also important that buyers check the building contract carefully to see exactly what materials, fittings etc are included in the specifications and what would be regarded as extras which will cost extra. Communal facilities need to be clearly identified as well as rules and costs regarding pets, landscaping, security etc”, believes Swain. “Finally the contract also needs to include a date by which buyers can take occupation of the property, specifying that the buyer will be entitled to cancel said contract should the home not be ready in time, allowing the buyer to be reimbursed for all monies spent thus far, including the deposit and progress payments made to the builder”.
Buying a brand new home has several benefits, permitted that buyers heed the steps above and do their homework before signing on the dotted line.

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 17 Nov 2017
      FWJK has announced the launch of its latest residential brand, the Lil’ Apple, which will be launched simultaneously in two developments in Cape Town and Umhlanga totaling 600 apartments. The Lil’ Apple is set to be a brand of FWJK’s New York style apartments which will be rolled out nationally.
    • 17 Nov 2017
      It’s been a tumultuous year on many fronts, with socio-political uncertainty setting the tone for much of South Africa’s economic activity yet despite this and seemingly counter-intuitively, the residential property market has held up well.
    • 17 Nov 2017
      The EAAB (the Estate Agency Affairs Board) recently claimed that around 50,000 illegal estate agents could currently be operating illegally.
    • 16 Nov 2017
      Penthouses are synonymous with New York – characterised by high-rise living that is decidedly luxurious and spacious. While exclusivity comes at a price, you can still create a “penthouse” look and feel in your existing apartment or even the upstairs bedroom of a double storey house with some clever design changes and styling touches.
    • 16 Nov 2017
      The area has long been popular with kite surfers and, with escalating property prices in Cape Town itself, is increasingly in demand with home owners who work in town, but are looking to invest in more affordable properties.
    • 16 Nov 2017
      Cape Town’s popularity as a world-class tourist destination has resulted in a spike in the number of homes available for holiday lets and fuelled investor demand for sectional title units with short term rental potential.
    • 15 Nov 2017
      Sappi, one of South Africa’s oldest global companies and a leading global supplier of sustainable woodfibre products, has moved its global and regional headquarters to a new site on the corner of Oxford and 14th Avenue in Rosebank.
    • 15 Nov 2017
      There’s an old saying in real estate that you should seek to make a profit when you buy, not only when you sell – and a large part of succeeding at that endeavour is buying a home in an area with desirable features that will enhance the resale value of your property.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us