How not to be overwhelmed

TICK OFF THE VARIOUS STAGES OF BUYING YOUR NEW HOME OFF PLAN

If you’re a first-time home buyer and buying off plan, you may find the administration, paperwork and responsibilities overwhelming. Here is a checklist of essential tips associated with buying a home off plan:

Work with an NHBRC-registered builder/developer: The law requires all new homes to be enrolled with the NHBRC at least 15 days prior to construction, which protects you against poor building practices. Buying off plan means you are buying a home in a housing scheme that has not been built yet. You will choose your stand, home layout and finishes according to what is on offer from the developer, and your home will be built for you subject to you qualifying for a bond. Ask questions and don’t sign up until you know exactly what you are agreeing to.

Applying for a bond: The developer will provide you with a formal quote. This quote is submitted to the bank to apply for a home loan. If approved, you will be asked to review and accept the offer if you are happy with the terms and conditions.

Bond registration: The attorneys handling the transaction will receive instructions from the bank to start the registration process. They will prepare the documents for you to sign. However, before they start the registration process, the attorneys will ensure all the conditions stipulated by the bank are met. At this stage it is important to note there are two types of home loans:

Building loan: The attorneys register the property in your name and the developer can start building your home. The bank will pay the developer at various stages in the construction process.

Turnkey loan: The developer must complete construction before the bank will register the bond. You will have to verify your home has been built before registration can take place. The developer gets paid after verification.

Life insurance: Upon approval of your bond, the bank will require that you have life insurance to cover you for the amount of the outstanding bond.

Quality inspections: The building process is independently monitored to ensure it meets the required regulations. It’s also important you monitor and inspect your home.

Pre-occupation inspection: Once your house is complete, the developer will arrange a handover inspection to check for any snags or items that need to be sorted out or fixed.

Cosmopolitan Projects is a South African developer of affordable housing.