Buy­ing a new or sec­ond-hand home – which is the best strat­egy?

Weekend Argus (Saturday Edition) - - PROPERTY -

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.

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