Real Estate Investor Magazine July/ Aug 2020 July 2020 | Page 31

ACQUIRING
Risk vs
reward
How to get the
best deal when
buying off-plan
T
he property market has seen a surge recently in off-plan
buying in new sectional title apartment and townhouse
developments, as the demand for smaller, more secure
and lower maintenance homes continues to increase.
“There is also no transfer duty to pay on a home bought
directly from a builder or developer, plus newly-built homes
come with structural and roof guarantees, while most
existing homes are sold voetstoots, or as-is,” says CEO of the
Chas Everitt International property group, Berry Everitt.
An appetite for risk will serve an off-plan buyer well. “The
financial benefits of buying into a development early is a no
brainer. In fact, if everything goes to plan (and the market is
right) then a buyer will make money on the property before
they even move in”.” says Director of EPiC, Grant Smee.
Everitt adds: “However, buying off-plan - or before the
home is actually built - is not a decision to be taken lightly,
especially by inexperienced, first-time buyers, because you
cannot see what you are getting. So, if you do decide to go this
route you need to take extra care to avoid disappointment
with the finished product.”
“It is vital to buy only from a reputable developer or builder
who has a track record of producing quality homes in similar
projects. Some will have their own sales agents, but it adds
an extra layer of protection if the off-plan homes are being
sold by qualified and experienced agents from a trusted real
estate company.”
“The second thing to do is make sure exactly what it is
that you’re buying in terms of floorspace and finishes, and
that this is clearly written into your sale agreement. It is not
uncommon for developers to create a “show unit” to help
buyers imagine what their home will look like once it is
finished, but you need to double check that yours will be the
same size and not smaller.”
Everitt says you also need to check your agreement to
ensure that all the finishes on show, such as the floor and
wall tiles, granite kitchen counters and built-in cupboards,
are included in the advertised sale price. Otherwise you could
end up paying considerably more in “extras” to get a home
that actually looks like the show unit.
The third thing that will make an off-plan purchase easier,
he says, is to get your home loan from the developer’s lender
– that is, the bank that is financing the project. “Not only
should it be easier to get home-loan approval from this bank,
because it has already evaluated the project and the units
that will be built, but you might also get a preferential interest
rate and possibly a reduction in bond registration costs.”
GRANT SMEE’S TOP TIPS FOR
BUYING OFF-PLAN
• Research, research, research!
• Price around to make sure that you are
getting the best deal in your respective area
• Get in as early as possible to secure the best
possible location
• Visit the site regularly
• Work closely with your agent and check-in
regularly
• Ask for timelines and stay on top of these
• Get everything in writing
• Add a clause to your contract to protect
yourself should there be delays or other
issues that are out of your control.
• Choose high-end finishes that will last
• Factor in the cost of levies
• Beware of snags (hairline cracks, damp etc.)
and make sure that these are done upon
moving in
SOURCES Chas Everitt International property group
& EPiC South Africa
SA Real Estate Investor Magazine JULY/AUGUST 2020 27