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Buying for dummies: Before you purchase a home off-plan, know this...

Having the final say in how your home will look and being the first to live in it is enticing, but you need to be aware of the conditions. Photo: Max Vakhtbovych/Pexels

Having the final say in how your home will look and being the first to live in it is enticing, but you need to be aware of the conditions. Photo: Max Vakhtbovych/Pexels

Published Jun 6, 2022

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There are many enticing things about buying a property off-plan, but the one many people find most exciting is they get a say in how the final product will look.

However, you need to remain realistic about how much you can change and realise that most changes will incur additional costs, says Adrian Goslett, regional director and chief executive of RE/MAX of Southern Africa.

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“While each off-plan build will have its own set of customisable options, the rule of thumb is that you will have a choice of most fixtures and fittings. Any structural changes can only be done pending approval from the developers and are likely to result in additional admin costs since the plans will have to be redrawn to include your changes.”

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For most off-plan builds, he says you can expect a range of choices for the following features:

  • cupboard door finishes and handles
  • kitchen counter tops
  • flooring options
  • paint colour.

“Generally, you will have a choice between a handful of options for each of these features. In some cases, one option might come as standard and the others will come at an additional charge. If you don’t like any of the features on offer by the developers, you may usually propose your preferred option, but this will come at your own cost if it is approved.”

Goslett also cautioned buyers hoping to make changes after the home was completed as, in most cases, the red tape did not come down after the property had been built.

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“These off-plan properties are most often built in estates managed by homeowners’ associations with strict by-laws regulating the appearance of all homes within the community. Some even go so far as to prohibit what sorts of plants may be planted in the front yard.”

While it might be easier to get away with changes to the inside of your home, you should never falsely assume that you can go ahead with alterations to the exterior of your property that were initially rejected by the developers during the building process, he warns.

“The reality is that buying off-plan is not the same as building your own home. If you want the flexibility to design a home that is one hundred percent what you would prefer, then you would save yourself a lot of frustration by building a property from scratch instead.”

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Buying off-plan not only means that you are purchasing a property before the building has been completed. It also means you will be paying a sizable deposit, with the balance of the purchasing price only payable on transfer, explains Mike Greeff, chief executive of Greeff Properties.

The deposit, held in a trust, accrues interest for the purchaser.

“Your deposit depends entirely on the developer but it’s usually between 5% and 20% of the purchase price. Remember, even if a building is well on its way to being built, it is still considered off-plan.”

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For buyers who like the idea of being the first to live in a home, there are many ways that off-plan properties can be found. The main method, he says, is by using a reputable real estate company as the agents will be aware of the latest and/or upcoming developments.

Real estate agents and developers also usually advertise these developments when they launch, notes Keith Anderson of Dogon Group Properties.

“So you may see adverts in the media, on on-line property portals, or hear about them through word of mouth.”

A factor which could be considered a disadvantage of off-plan buying is that you may have to wait longer than expected before transfer due to unforeseen delays on the part of the developer. Even if this does occur though, Greeff says the longer the wait, the more capital growth accumulates.

Buyers who intend to purchase for the purposes of buy-to-let should consult with an agency who knows the area and the development’s position to ensure there will always be a far demand for rentals and sales.

You should also ensure the credibility of the developer and ask the following questions:

  • 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?

If you are going this route, you should also ask to see all the plans and specifications of the property before paying any deposit.

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

You need to make sure the developer has a good track record and ensure the contract states that there is time post-completion for inspection.

“This gives you time, before you move in, to address any issues you might have with the building and it gives the developer enough time to fix it,” Greeff says.

You should also find out how long the development will take to be built and how it will be managed by the developer.

Anderson adds that buyers must make sure that the major banks have approved the scheme. You must also ensure that you sign a floor plan and finishes schedule and ensure that your future levies have been advised.

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