04/06/2018 12:41 SAST | Updated 04/06/2018 12:41 SAST

Buying Your First House Off-Plan? Here Are 5 Things You Need To Know

Here are important tips to consider when buying off-plan.

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Buying your first home can be as an exciting as it is an overwhelming venture — considering the amount of administration and paperwork that can be involved in the process.

It may also be tempting to just sign the many documents because of anticipation, without fully understanding what they are for.

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To not be caught off-guard, here are important tips to consider when buying off-plan from Cosmopolitan Projects:

1. Don't sign what you don't understand

Buying off-plan means you are buying a new home in a development or housing scheme that has not been built yet. You will choose your stand, home layout and finishes according to what is on offer from the developer, and your home will then be built for you subject to you qualifying for a bond. The developer may have one constructed unit as an example, or they may have models and layouts of what the final property will look like. Either way, it's really important to understand exactly what you are getting. Ask questions, and don't sign up until you know exactly what you are agreeing to.

If you are in any doubt at the time of signing up, set a time to meet with the developer's agent or marketing manager and clarify any queries you may have upfront and make sure what your responsibilities are.

2. Work with an NHBRC-registered builder/developer

The National Home Builders Registration Council (NHBRC) is a regulatory body of the home-building industry. The NHBRC certifies builders who meet the prescribed industry standards criteria in terms of technical competence, construction experience and financial capability. The law also requires all new homes to be enrolled with the NHBRC at least 15 days prior to construction. Enrolling your home building project with the NHBRC helps protect you against poor building practices.

3. Bond registration process

Once you have agreed on your home and plans, the developer will provide you with a formal quote to review and accept. This quote is then submitted to the bank in order for you to apply for a home loan. If the bank approves your application, you will receive a bond-approval offer from the bank. You will be asked to review the offer and accept it if you are happy with the terms and conditions from the bank.

The attorneys handling the transaction will then receive instructions from the bank to start with the registration process. They will prepare all the necessary documents for you to sign. The property will be registered in your name and the developer can start building your home. The bank will pay the developer directly at various stages in the construction process.

During the building process, the local council building inspector, NHBRC inspector, structural engineers and the bank assessors will independently monitor the process to ensure that the building process meets the required building regulations. It's also important that you monitor and inspect your home throughout the entire building process.

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4. You need life insurance

Upon approval of your bond, the bank will require that you have life insurance to cover you for the amount of the outstanding bond. In the event of the death of the primary earner and contributor to the bond repayments, life insurance will settle the outstanding bond amount and also ensure that your family is not lumbered with the home loan debt owed to the bank. It protects them from a worst-case scenario of not only the loss of a loved one, but possibly also the roof over their heads.

5. Pre-occupation inspection

Once your house is complete, the developer will arrange a handover inspection at your home. This inspection process is important. You will need to take your time to go through your home to ensure that you are happy and to check for any snags or items that need to be sorted or fixed.