Buying a new or second-hand home – which is the best strategy?
WHEN deciding to buy a home, particularly a unit in an estate, you may have a choice between buying a new home directly from a developer or an existing second-hand one.
Michael Bauer, managing director of IHPC estate agency, says the advantage of buying directly from a developer is that you’re getting a brand new product, where no major maintenance, refurbishments or repairs will be necessary for the next three to five years.
Another benefit to buying new property is that you can choose the layout you prefer, the size of the unit and usually there is a list of finishes to choose from.
Although homes costing less than R600 000 will have no transfer duty, a major benefit in buying directly from a developer is the saving in transaction costs. In most cases VAT will be included in the price and most of the transaction costs are paid by the developer.
“Buyers usually need to put down 10 percent to 25 percent of the purchase price as a deposit so they would need to budget an additional 10 percent of the purchase price for the transaction fees if they buy secondhand homes, because the banks won’t finance them. So the savings in buying directly from a developer are considerable,” says Bauer.
Then comes the next choice in a residential property devel-
‘Lifestyle choices are important, such as open space or shorter travelling times to work’
opment – there are options of whether to buy off plan or to buy a completed product.
Bauer says there are more benefits to buying a home from a developer that only sells completed products.
“At Bardale Village, for example, where IHPC is the sole agency, only completed homes are sold. We think seeing a completed product and the finishes and features in the home is better than buying a unit where certain things can vary during the building process. You can trust what is in front of you, already completed,” he says.
“Building contracts usually allow variations. For instance, up to of 5 percent of the floor space could be different to what was initially agreed on and the layout of the completed unit could be different, including the finishes.
“If you are buying a new home, check that the tiles, basins, baths, toilets, will all be the same as in the show unit or what you chose from the list of options and that the developer won’t substitute these at any point with cheaper or different versions.
“Whether you choose to buy a new unit, already built or off plan or whether you opt for a second- hand unit, always remember to research the area the development is in.
“Lifestyle choices are important, such as open space or shorter travelling times to work. Be aware of your privacy, garden or security needs and compare all the options before choosing to buy,” says Bauer.