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Pros and cons of Buying Property Off-Plan in South Africa

Pros and cons of Buying Property Off-Plan in South Africa

<p><strong>Buying property off-plan or directly from the developer has many benefits for <a href="http://just.property/latest-news/property-education-for-first-time-home-buyers/">first-time home buyers</a>&nbsp;and others without large sums of cash for transfer duties and various other transaction costs, but there are some challenges involved too.</strong></p> <p>Shaun Rademeyer of BetterLife Home Loans says that one of the most appealing aspects of buying an off-plan or newly-built home is that tax is built into the sales price, in the form of VAT.</p> <p>"For anyone buying a property priced at more than R750 000, this means a considerable saving when it comes to upfront expenses, because there is no transfer duty payable. And there may be savings even for those buying lower-priced homes, because developers will often cover bond registration costs and transfer legal fees as a purchase incentive."</p> <p>In short, he says, <strong>in new developments it is often the case that the price you see is the price you pay</strong>.Further benefits include moving into a brand new home and a planned community that most likely offers excellent security measures and communal amenities. On top of that, o<strong>ff-plan buyers are often able to customise the layout and finishes of their new homes to suit their personal preferences.</strong></p> <p>However, buying off-plan does present some hurdles, including the fact that in most cases buyers have to base their decisions on two-dimensional visual materials such as building plans and architects' drawings, as opposed to actually seeing the physical home that is on offer.</p> <p>In addition, says Rademeyer, off-plan buyers in any freehold development such as a cluster village or an estate must make sure that they <strong>sign two sales agreements - one for the purchase of the land, and a second for the purchase of the home that is to be built on that land</strong>, so that payments to the builder or developer can be linked to building progress and completion.</p> <p>"Indeed, the building contract in any off-plan purchase should contain details of every item and specification agreed to with the builder or developer - including price, floor plan, wiring, plumbing, fixtures, fittings and even paint specifications, as well as a completion date.</p> <p>"This is very important to avoid possible future disputes, and buyers should of course only buy off-plan from a known developer with a track record of successful projects. Such developers usually have the backing of a large financial institution and are usually also associated with reputable bond originators."</p> <p>Article from&nbsp;<a href="http://www.iolproperty.co.za/roller/news/entry/buying_off_plan_property_has">iolproperty</a></p> <p>&nbsp;</p>