Help with purchasing property from Developers

[marco79]

Anyone with any advice with regards to purchasing property off plan from developers. What should I look out for?

This new development requires a deposit of R5000.00 to secure a plot/property. I spoke to a salesperson and they say they need 50% of the plots sold (or guarentees from banks for homeloans) before construction will start. This development was just launched last week. I was told construction should start after winter and occupation will be before December this year.

All comments or advice will be greatly appreciated.

 

[Pitbull]

Anyone with any advice with regards to purchasing property off plan from developers. What should I look out for?

This new development requires a deposit of R5000.00 to secure a plot/property. I spoke to a salesperson and they say they need 50% of the plots sold (or guarentees from banks for homeloans) before construction will start. This development was just launched last week. I was told construction should start after winter and occupation will be before December this year.

All comments or advice will be greatly appreciated.

I assume you live in Capetown ?

If not then it will not be done before December. I would not touch them with a steel pole then. Any builder in SA (Excluding Western Cape) that doesn't build as much as possible in Winter is not a builder to be trusted

 

[marco79]

Yes I am in Cape Town

 

[Gaz{M}]

Are they building tents for you? If not, December sounds a bit soon...

 

[web]

Anyone with any advice with regards to purchasing property off plan from developers. What should I look out for?

This new development requires a deposit of R5000.00 to secure a plot/property. I spoke to a salesperson and they say they need 50% of the plots sold (or guarentees from banks for homeloans) before construction will start. This development was just launched last week. I was told construction should start after winter and occupation will be before December this year.

All comments or advice will be greatly appreciated.

The banks will not issue bonds on a development unless all infrastructure is in
This includes fencing, water electricity as well as the "base" of the roadworks.
Start after winter say September ? They will NEVER have your house ready in December this year then, once you put down your deposit its nearly impossible for you to get it back.

 

[Frankie]

I was about to put a fairly hefty deposit down on a development overlooking the Bakens valley - I had signed the offer to purchase with the agent and the next day I just felt uneasy about the deal and withdrew my offer.
A sign board and builders container/office was placed on site, but a couple of months later this disappeared and nothing has happened on that site for the past three years - I met someone who did put his deposit down for this, and he told a horror story trying to get his money back - he lost a lot of money in the end.

I will never build or buy into something that's still to be built - buy an established place and you get what you see.
With building or "off plan" as they call it these day's there's loads of hidden costs - some intentionally hidden.

 

[guest2013-1]

Don't buy off plan. Wait for it to finish then buy. Same reasons stated. I've seen this happen in Dubai recently. So many developers going under because the funding got retracted because of the "crisis". And people losing their deposits from scaly people.

 

[Waaib]

While buying off plan does offer buyers upside on the value of the property once built I've never once seen a building match the plan so be prepared for some stress and be prepared to accept some changes as they go. I also reckon you can't bank on them being done on schedule. I don't think that ever happens.

Find out if your deposit can be held by the bank as opposed to the developers? Increases the chances of getting it back. I've only ever heard horror stories. It might depend on the market though. Under R1mill is where I have experience. I reckon on more expensive units the way it works might be different.

I once watched a complex go up in Claremont. The developers first sold single garages as optional extras to buyers. Once they had two sold they would build a double garage with single brick wall separating the two parking bays and then they sold the space above as a studio apartment. The studio's were never on the plans and many where right in front of the duplex units folks had bought which removed the view of the mountain. Developer got away with it by some loop hole in the paperwork. They also carpeted before plastering and painting the walls. Most folks had to re-carpet at their own expense after moving in. At one point owners where banned from the site with a restraining order because they where kicking up so much fuss. Several walked away from their deposit to get out of the deal.

 

[Jewelbox]

Don't buy off plan. Wait for it to finish then buy. Same reasons stated. I've seen this happen in Dubai recently. So many developers going under because the funding got retracted because of the "crisis". And people losing their deposits from scaly people.

Please listen to the advice Acid Razor gave you and rather wait for the 1st show house to be completed. There are also lots of different things to watchout for. Our developer left us with debt over R130,000 in respect of rates and taxes which he never paid during the developing period. How he managed to register the properties with the municipality, I don't know!

 

[marco79]

Thanx for the comments. I will wait about 6 months to check whether things are on track before putting down any money.

 

[Hoof-Hearted]

Thanx for the comments. I will wait about 6 months to check whether things are on track before putting down any money.

Also get hold of a PIP list of the area you want to buy in from your bank. Repo'd properties are xfer cost free, you get to see what you're paying for and with the number of PIP's reportedly in the system at the moment, you'll get a good buy if you're patient.
Just be sure to do your homework wrt outstanding rates etc and possible renovation costs