Buying off plan versus buying an existing home
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Buying a property is likely to be one of the most exciting times in your life. If you have decided to buy a property within a sectional title scheme, you will often be able to choose whether to buy a pre-existing home or to buy off plan. Buying off plan means that your home hasn't been built yet, or is in the process of being built by a developer. Jawitz Properties considers the options and looks at the differences between buying off plan and buying an existing property.
The implications of being your home's first owner
For starters, buying off plan means that your family will be the first to call your unit home, and you will be able to make certain choices to ensure that it feels like home from day one. This can be a great option for people who want to be able to make decisions about the way their home looks, but don't have the inclination to undertake a renovation project.
On the other hand, buying off plan means taking a leap of faith, which should never be done lightly. If you're thinking about buying off plan, you're going to need to do your research - both on the development itself and into the developer who is offering you the opportunity. Depending on how long the development has been around, there may be a number of units already built, while in other cases, you may only have the developer's blueprints or one sample unit to look at.
More research is required if you're buying off plan
Before you sign on the dotted line, you need to make sure you're comfortable with the developer's track record. Ask for examples of other developments they have worked on and ask to see proof of their affiliation with organisations such as the National Home Builders Registration Council. The good news for those buying off plan is that the Consumer Protection Act places obligations on the developer to ensure that you, as the client, are completely happy with your new home.
Input into your home's finishing touches
When you buy a property that's already been built and lived in, your finishing touches will have been chosen based on the previous owner's tastes and choices. On the other hand, buying off plan allows you to make some choices in your home's initial look and feel. In other words, buying off plan gives you the fun of choosing things like taps, tile colours, fittings and cupboard doors. Some of these options may come with price variants, meaning that you can kit your home out in a way that fits your budget.
When you're buying a home that has already been built and lived in, you're buying it as is. You may be able to negotiate that the seller gives the property a coat of paint before you move in, but the house comes complete with whatever choices the previous owners have made over the years. If you want anything changed, you'll have to renovate after the transfer process is complete and the home is officially yours.
Another point to bear in mind is that when you buy off plan, you will be taken on an inspection of the property when the work is complete. During this inspection, you will have the opportunity to ensure that all plugs and taps are working and that there are no cracks, uneven walls or blemishes.
Financial implications
When you're buying a property off plan, you'll typically pay slightly less than what the property will be worth by the time building is complete. By the time your property is ready, it can be worth as much as 10% more than what you paid for it. This has obvious advantages for those wishing to buy and sell properties for investment purposes.
If you're buying a prebuilt and preowned property, you'll be required to pay transfer duties if the property costs R1 000 000 or more. When you're buying off plan, on the other hand, you will never pay transfer duties. The VAT payable on the transaction will be built into the selling price. Similarly, when you buy off plan, the bond registration fees and Deeds Office fees form part of your purchase price.
Jawitz Properties has an array of residential new developments to showcase around South Africa. If you're interested in buying property - whether off plan or not - contact the team today and let us help you find your new home or your next investment.
Author: Jawitz Properties
