A common conundrum among buyers is whether it’s better to buy an existing home or a brand-new, off-plan property
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Agents are often asked whether to buy an existing home or a new property off plan from a developer, but there isn’t a one-size-fits-all answer. Both options have compelling advantages, and it very much depends on buyers’ individual preferences and requirements at the time. “As with most things in life, the right decision is an informed one, so a little research will go a long way to help you understand which option is the right one for you now,” says Chris Cilliers, CEO, Lew Geffen Sotheby’s International Realty in the Winelands.
Existing homes
“The biggest advantages are that the neighbourhood is usually established so there’s little risk of having the disruption of ongoing construction. These areas will have a developed infrastructure and an array of amenities like shopping centres, schools and sports facilities in close proximity.” Gardens are most likely well established, so you won’t have to spend valuable time and additional money on creating one from scratch. To help you decide, Cilliers suggests exploring the suburbs in which you are looking to buy, taking note of the infrastructure and choice of amenities, as well as the sale prices the area commands.
“Once you have this information, it will be easier to choose between buying an existing or a new home and to evaluate the pros and cons.” The two main disadvantages of an existing home are that the property may be dated and in need of modernisation or some renovation and that it’s likely to require maintenance sooner, which can prove costly over time. “It’s important to inspect the property thoroughly before buying, because although small maintenance issues are to be expected, you don’t want to be unpleasantly surprised by major defects which only become evident at a later stage, resulting in additional expenditure,” she says.
New, off-plan houses
The main advantage is that everything will be fresh and new with none of the wear-and-tear of a property that has previously been lived in, with no major maintenance, refurbishments, or repairs necessary for the next three to five years. And, when buying off plan, you can choose the layout you prefer, the size of the unit, and usually there’s a list of finishing options. “The initial layout can be less, as with new developments there’s also no transfer duty (you do pay VAT) and some developers add extras such as appliances or a levy holiday. It’s also possible to build a much more energy-efficient house using all the new materials and products, which will ultimately save money on running costs. Although it’s possible to make energy friendly changes to an existing property, it would never be at the same level as a new build,” she explains.
Another compelling benefit is that these homes come with a National Home Builders Registration Council (NHBRC) five-year guarantee, with the roof guaranteed for one year. “Buyers also have a stipulated period after moving into the property during which time any snags will be made good by the developer. If you buy from a developer, the Consumer Protection Act (CPA) safeguards you, whereas if you buy from a private seller the CPA doesn’t apply.”
Under the CPA, a purchaser has the right to:
Within three months, instruct the builder to rectify non-compliance or deviation from the terms, plans and specifications of your mutually binding agreement
Within 12 months, instruct the builder to repair roof leaks attributable to workmanship, design or materials
Within five years, instruct the builder to rectify major structural defects caused by non-compliance with technical building standards.
Keep these negatives in mind
“Potential disadvantages include working through snag lists when you move in. The waiting period until completion might not suit you, and the choice of designs is usually limited.”
Buyers should be aware of the following risks:
- You may not be able to visualise the end product from architectural drawings, plans or artist’s impressions, so the final product may not be quite what you envisaged. It’s essential to double check specifications and finishes to make sure the end product will be exactly what you wanted.
- If you buy into a development, you may have to compromise on the date of occupation and transfer depending on the nature and circumstances of the particular development.
- You will have far less control than if you were building your own home, so always investigate the track record of the developer for quality of workmanship, financial stability, integrity and reliability.
“Regardless of which option you choose, the better informed you are, the easier it is to avoid potential pitfalls and minimise the risks, so always do your homework before signing an offer to purchase,” Cilliers concludes.
