According to Leapfrog Property Group’s MD Bruce Swain, buying a house off-plan is an increasingly attractive option to South Africans looking to invest in.
Buying “off-plan” is referred to as so because it entails buying a property before it has been built, and basing one’s purchasing decision on the developer’s current ‘vision’, promotional materials and architectural plans.
Consequently, the transfers to ownership take much longer than it would buying a pre-built home in South Africa. There is also the undeniable risk that comes with not knowing exactly what one may get. On the other hand, the option could work out as a cheaper option.
Benefits of such include lower or no deposits altogether, delayed bond repayments, increased property values – since the property is purchased 18-24 months in advance, no transfer duties and enhanced estate security.
Among the items on Swain’s laid out checklist for those looking to buy a property off plan is the track record of the developer. Factors such as their reputation in terms of success in previous projects considering time frames should be put into mind.
Swain also advises on the importance of inspecting a demo unit, emphasizing on the difference between sketches and the actual thing. The buyers should thus spend enough time going through the model so as to get a feel of what to expect.
Besides familiarizing themselves with just the model, the buyers should also inquire about the materials that will be used, as Swain points out they may differ from those of the model in some aspects.
It is also good to note that a deviation of 5-10% from the plan by the developer without having to consult the buyer is allowed. Keeping that in mind, it is also important for the buyer to keep themselves at breast with the work being done so as not to get a big difference from their specifications.
Checking the building contract to see that the materials, fittings are included in the specifications and what would be regarded as extras which will cost extra should not be overlooked.
Swain also believes on full disclosure with regards to identification of communal facilities as well as rules and costs regarding pets, landscaping, security etc. Lastly, the contract should include date of occupation of the property. It should also specify the measures to be taken in the event that the home is not ready in time.
