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Buying off-plan? The ticks and crosses

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There are advantages and disadvantages to buying off-plan.

A main advantage is that the total cost of the house, including the VAT and all fees, is financed by the bank, says Greeff Property’s Mike Greeff.

This takes the burden off of the buyer and is a bonus for first-time buyers.

Other pros, he says, include:

  • You do not pay transfer duty, which applies whenever a previously-owned property changes ownership.
  • When you buy from a developer, you are protected by the Consumer Protection Act.
  • You can choose finishes according to your fancy, for example, the colour of carpets, tiles and curtains.

Dogon’s Keith Anderson says: “Another advantage is that prices are based on current building costs per square metre. By the time it is completed these may have already gone up and so you would have already accrued resale value in the property.”

A factor which could be considered a disadvantage of off-plan buying is that buyers may have to wait longer than expected before transfer due to unforeseen delays on the part of the developer.

Greeff says the longer the wait, the more capital growth accumulates. Buyers who purchase for buy-to-let should consult an agent who knows the area and the development’s position to ensure the demand for rentals and sales.

Ensure the developer’s credibility and ask:

  • How many years have you been in business?
  • How many developments have you completed?
  • Are your renderings a true reflection of what the development is going to look like? Buyers going this route should also ask to see all the plans and specifications of the property before paying a deposit.

“It is not wise to rely solely on promotional brochures. If you don’t have the original specifications, the developer can essentially change the building and you’ll get something you weren’t expecting.”

Make sure the developer has a good track record and ensure the contract states there is time post-completion for inspection. “This gives you time, before you move in, to address issues with the building and give the developer enough time to fix-it,” Greeff says.

Find out how long the development will take to be built and how it will be managed by the developer. After purchasing a property off-plan, owners may have a long wait for it to be completed, Anderson says. “One has to wait for it to be built but there can be other delays . It can be a lengthy process.

“You are getting a new home with no transfer duties but you are not buying something you can move into speedily.” Buyers must make sure major banks have approved the scheme, and must sign a floor plan and fi nishes schedule and ensure future levies have been advised.


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