Buying a house off-plan is an increasingly attractive option to South Africans looking to invest in property according to\u00a0Bruce Swain, managing director \u00a0of Leapfrog Property Group.<\/p>\n
Buying “off-plan” effectively means buying a property before it has been built, and basing your purchasing decision on the developer\u2019s current \u2018vision\u2019, promotional materials and architectural plans.<\/p>\n
As a result the transfers are typically much longer than buying a pre-built home in South Africa and there is an added risk of factor of not knowing exactly what you may get. But it could also work out as a much cheaper option, noted Swain.<\/p>\n
The benefits include lower or no deposits, delayed bond repayments, increased property values (as you typically buy the property 18-24 months in advance), no transfer duties and bolstered estate security.<\/p>\n
Swain laid out the following checklist when looking at buying a property off-plan.<\/p>\n
Checklist for Buying Off-Plan \u201cThe first thing I\u2019d recommend buyers look into is the developer\u2019s track record \u2013 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\u2019s work as well\u201d, advised Swain.<\/p>\n Inspect the demo model<\/strong><\/p>\n “It\u2019s important to inspect a demo unit as artistic renders and sketches don\u2019t necessarily translate into real life \u2013 spending time going through the model property will enable buyers to expect the quality of the workmanship and materials in person.”<\/p>\n Stay on top of the building process<\/strong><\/p>\n \u201cIt\u2019s critical to enquire about the materials that will be used in a buyer\u2019s property as it may differ from the demo model\u2019s 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.”<\/p>\n “If buyers don\u2019t stay on top of the building process they could well find themselves with a property that\u2019s different to their specifications in a number of ways,” cautioned Swain.<\/p>\n Read the fine print<\/strong><\/p>\n 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\u2019s association (HOA) may impose a penalty.<\/p>\n \u201cThis 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.\u201d<\/p>\n \u201cIt\u2019s 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\u201d, believes Swain.<\/p>\n \u201cFinally 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,” he concluded.<\/p>\n
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\nThe reputation of the developer and or builder<\/strong><\/p>\n
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