Off-plan pros and cons
BUYING property “off plan” holds many benefits for buyers without large sums of cash for transfer duties and other hidden costs, but there are some potential pitfalls.
Martin Schultheiss, chief executive 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.
“Other benefits include moving into a 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 homes 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 building plans and architects’ drawings…”
In addition, Schultheiss says, not many buyers realise that off-plan purchases may involve two contracts.
“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. The lack of a written contract for the building can cause confusion and could quite easily lead to lengthy disputes between buyer and developer.”