Can I afford to buy in a development?
You may question if you can afford your dream home, it’s repayments and living expenses?
Professional Home Loan agents will be able to assist you with complimentary affordability checks, giving you an indication of what your affordability bracket will be and you are under no obligation to take up the offer.
Once you decide to commence with the buying process, the bond application will give you an accurate figure, with monthly installments and the best rates by all major banks. You will have 5 days to take up this offer. Raising money as a deposit can lower interest rates although a deposit isn’t always necessary.
Your professional sales agent will be able to advise on living expenses within an estate, giving you approximate costs on lights, water and levy’s. This should help you with budgeting
• Look for homes that include solar geysers, rainwater tanks, gas stoves to reduce living costs.
• If you have Concerns about the interest rates changing, you will have an option to choose between fixed or variable rates depending on banks.
Should I buy something that is not yet built?
In a turn-key development you will only start paying your first installment once the property registers in your name and there will be no interim interest. This means that when purchasing within an estate, the developer carries the risk protecting you. This means if you buy now and the bond is approved, but the actual property will only be built and completed in 6 months’ time the banks will keep the bond active until registration. Once your property is practically completed the developer will contact you to sign a ‘happy letter’ (practical completion letter). If you are satisfied that the correct unit has been built on the correct site and is of acceptable quality you can sign the happy letter. The banks will then send their evaluator for a final inspection. Only after receipt of these letters the registration process will start, protecting you as the client once again.
Can I buy with cash in a development?
Clients with bond approvals are protected. What about cash buyers?
If you choose to purchase cash, the money will be deposited into the Developers appointed transferring attorney’s trust account. This is an interest-bearing account and the interest accrued will be paid to you upon registration. The purchase amount will only be transferred from the trust account to the developer upon registration ensuring you are happy
Tip: Another option is to keep the money in your own account. Your bank will then have to issue a guarantee to the appointed transferring attorneys for the purchase amount.
Can developments be trusted?
It is very important to research and know what will be developed in the surrounding areas. This will have a direct impact on the growth of your investment. Future amenities like schools, retail centres, retirement villages, hospitals, hotels etc will add value to your investment. Private developments may also have a detailed macro plan, model or drawings to give an indication of what you are buying into. This should instill confidence in the development.
What about Infrastructure of roads, water and the sewage system?
It is important to know what the infrastructure entails as well as the maintenance thereof.
Private developments have an appointed infrastructure engineer overseeing the planning, installation and maintenance of the water supply, sewage system, roads etc.
There are also strict legislations that a reputable development needs to adhere to in order to get the necessary permission from the authorities.
Tip: Don’t be afraid to ask questions: where they get their water from, what waste removal systems they use etc.