PUBLISHED 22 JAN 2010
Buying property “off plan” holds many
benefits for first-time buyers and others without large sums of cash
for transfer duties and other hidden costs, but there are some
potential pitfalls.
Martin Schultheiss, CEO of the Harcourts Africa property group, says
one of the most attractive features of off-plan purchases is that VAT
is built into the sales price. “It means a considerable saving in
up-front expenses for homebuyers since no transfer duty is payable and
the price you see is by and large the price you pay.
“Other benefits include moving into a brand-new home in a planned
community, which more often than not offers excellent security
measures. On top of that, buyers are often able to customise the layout
or finishes of their new home to suit their own preferences.
“However, buying off plan does present some challenges, including the
fact that buyers usually have to base their decisions on graphics such
as building plans and architects’ drawings as opposed to physically
inspecting an existing home.”
In addition, Schultheiss adds, not many buyers realise that off-plan
purchases may involve two contracts. “In cluster schemes and estates,
buyers actually need to sign two sales agreements – one for the
purchase of the land and the second specifically for the purchase of
the home to be built.
“And the lack of a written contract pertaining to the building can
cause confusion and could quite easily lead to lengthy disputes between
buyer and developer.
“It is thus essential that buyers make sure they have a written
contract covering every item and specification agreed with the builder
or developer, including the price, the floor plan and details such as
wiring, plumbing, fittings and fixtures, and paint specifications.
“They should, of course, also only buy off plan through a reputable estate agent or developer with a strong track record.”
Source: Property Trader
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