The fees and transfer duty that Lerato will be saving on this purchase is R48 750. This is more than 4 % of the purchase price. If she wants to compare this to buying an existing property, Lerato needs to compare this to a property of about R 1.151m to have a similar cost for the transaction. In addition, if she had to finance the property with a 90 % home loan, she will need R43 875( or 36 %) less cash to purchase the off plan property.
The following graph shows how the value of this saving changes with the sale price.
Example 2: A buyer has limited cash for the deposit and necessary fees
Michael would like to buy a cluster home in Northriding for him and his family. They are setting their dreams and lifestyle expectations on modern homes of about R2.0m. Michael and his wife qualify for a home loan of up to R1.8m for up to 90 % of the value of their chosen home. They saved R200 000 in cash to pay for a deposit and fees. The family would like to buy their own home as soon as possible. What are their options taking into account that they have limited cash available for the 10 % deposit, fees and transfer duty?
www. reimag. co. za FEBRUARY 2017 SA Real Estate Investor 17