When deciding to buy a home, particularly if the buyer has chosen the option of a unit in an estate, there is usually the first choice of whether to buy a new home directly from a developer or to buy an existing second hand one, says Michael Bauer, managing director of the estate agents IHPC.
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, he said. Another benefit to buying new property is that the buyer can choose what layout he prefers, the size of the unit, and he will usually have a list of finishes he can choose from.
Although homes below R600 000 will have no transfer duty, said Bauer, 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, traditionally most of the transaction costs are paid by the developer.
“If one considers that a buyer would usually have to have 10 to 25% as a deposit to put down and he would need to budget an additional 10% of the purchase price for the transaction fees if he bought a second hand home (because the banks won’t finance these), the savings in buying directly from a developer are considerable,” said Bauer.
Then comes the next choice in a residential property development – there are options of whether to buy off plan or whether to buy a completed product.
There are more benefits to buying a home from a developer that only sells completed products, said Bauer.
“At Bardale Village, for example, where IHPC is exclusively involved in the sales of units, only completed homes are sold. We feel that seeing a completed product and the finishes and features in the home is better than buying something where certain things can vary during the building process. You can trust what is in front of you, already completed, and buyers can see and touch the property,” he said.
In building contracts, there are usually variations allowed – up to of 5% of the floor space could be different to what was initially agreed on and the layout of the completed unit could be completely different including the finishes, he warns.
If buying a new home, check that that the tiles, basins, baths, toilets, will all be what was seen in the show unit or what was chosen off the list of options and that the developer will not substitute these at any point with cheaper or different versions, he advised.
“Whether you choose to buy a new unit, already built or off plan or whether you opt for a second hand unit, always remember that the initial steps are first to research the area that the development is in. Lifestyle choices are important when buying a home such as open space or shorter travelling times to and from work, so it is best to be aware of what you and your family need in terms of privacy, garden or security and compare all the options of old versus new before choosing to buy.”