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Buying property off-plan: Here’s what to know

So, you’ve found yourself in the market to purchase property, and you’re not feeling the available options. Have you considered taking a look at something that has not yet been built? As the demand for secure and lower maintenance homes increases, there’s been a surge in off-plan buying and this could be the best solution.

What is off-plan buying?

This is buying into a title development where no units have been built and your decisions are based on the developer’s blueprints or the builder’s plans that indicate what the property will look like when complete. This isn’t an easy decision to make which requires trust because you can’t see the finished product beforehand.

Some benefits of buying off-plan

  • You move into a brand-new house that has never been occupied.
  • Buyers usually get to choose the stand where their property will be and can have some input into the layout of the home.
  • Some developers offer a selection of fixtures, finishes, and sometimes even paint colours. This allows you to have a lot more control on what the property will look like.
  • There are no transfer fees payable and the VAT is included in the purchase price. Greatly reducing the financial barrier to entering the market.
  • If you’re buying property to rent out, you could be looking at higher rental yields as tenants usually love property that no-one has ever lived in.
  • Before taking transfer, you’ll undoubtedly have the opportunity to inspect your unit closely.
  • These properties may, at times, sell at reduced prices in comparison to what they will ultimately cost after it’s complete.
  • You are covered by the Consumer Protection Act, so you have a certain amount of legal recourse if things don’t go to plan.

Are there disadvantages?

There are not a lot of negatives associated with buying off-plan, but it’s important to be vigilant and take note of any negative issues.

  • There’s an element of risk because the final product might not meet the expectations created or promised by the plan.
  • In the case with sectional apartments or townhouse developments, you are dependent solely on the developer to produce what they promised. You can’t control how closely the finished product matches the marketing material.
  • If the dates of completion and transfer don’t coincide, you could be liable for occupational rent (also known as occupation interest). This is often a bone of contention between buyers and developers, so read the fine print carefully.

Do your homework

As with every smart investment or purchase, do your research into the developer when buying off-plan. Here are some of the important things to look into:

  • Find out how long they’ve been in business and check out their track record. It can’t be overstated how important it is to buy only from a reputable developer who is known for producing quality homes in similar projects.
  • Check out their previous project marketing brochures and run a comparison check to the final and finished properties.
  • Where you can, contact past customers and ask them about their experiences in dealing with the developer. Online reviews or mentions on social media can give you some understanding on their interactions with clients.
  • Once construction starts, visit the site when you’re able to, to see how work is progressing.
  • Check the agreement to ensure that all the finishes on show are included in the advertised sale price. You don’t want to end up paying considerably more in “extras” to get a home that looks like the show unit.


Before diving into off-plan property investment, it’s critical to understand the fiscal implications. Budgeting for such a purchase extends beyond the initial price tag; potential buyers should consider additional costs that may arise during the construction phase, such as price escalations or alterations you may request.

It’s also prudent to ascertain the financial stability of the developer to mitigate the risk of project failure or significant delays which can impact your financial plans. Check if there are any clauses relating to post-completion price appraisals concerning the market value, which can affect your mortgage and investment returns. Always keep a reserve fund for unforeseen expenses.

Lastly, understanding how this purchase fits into your long-term financial goals is key. Are you prepared for the waiting period before the property enhances in value? Adequate financial analysis and contingency planning will place you in a better position to decide if off-plan buying aligns with your investment strategy.


When considering this type of investment, be aware of the financial products specially tailored for off-plan purchases.

Most developers require a deposit to secure your unit, which may vary based on their terms and conditions. Furthermore, mortgage lenders offer construction loans that allow for periodic disbursement of funds in alignment with various construction milestones. These loans may convert into a traditional mortgage once construction is complete.

Potential buyers should also inquire about developer or builder financing options, which can sometimes offer competitive rates or favourable terms. It’s essential to compare these financing possibilities, taking into account interest rates, repayment terms, and any possible impacts on cash flow. Proactively engaging with a financial advisor or a mortgage broker specialized in off-plan property dealings can provide great insight into securing the best financing option that suits your financial forecast and risk profile.


The deposit represents a critical factor and holding stake for both the buyer and the developer. Typically, this upfront sum varies from project to project but generally ranges between 10% to 30% of the total property price. This deposit not only secures the buyer’s commitment to the purchase but also provides the developer with assurance and working capital for the construction phase.

For buyers, negotiating the minimum deposit possible may be beneficial in terms of cash flow; however, developers may tie incentives or better pricing options to a higher deposit. Prospective buyers need to peruse the contract meticulously and be aware of the conditions surrounding the forfeiture of the deposit should they decide to withdraw from the purchase.

Seek clarity on whether the deposit is held in a protected trust account and if it accrues any interest over time, as this will have a direct impact on the total invested sum.


Understanding the legal and contractual landscape is paramount. Buyers need to work closely with a legal professional or conveyancer who specializes in property law to thoroughly review the purchase agreement and ensure that all terms, contingencies, and consequences are clear and beneficial. Key factors to focus on include:

  • The escape clauses for both parties, such as what happens if the developer fails to complete the project on time, or if the buyer’s financial circumstances change.
  • Detailed specifications of the planned construction to ensure that the buyer is getting exactly what is outlined in the contract.
  • A clear definition and the implications of force majeure clauses that protect both parties from events beyond their control which might delay or prevent the completion of the project.
  • Guarantee of completion bonds or warranties from the developer that provide financial protection against potential insolvency or failure to deliver the project to the agreed specification and standard.
  • Dispute resolution mechanisms are in place in the event of any disagreements between the developer and buyer during or after the construction phase.
  • Penalties or compensations for delayed completion, ensure that developers are incentivized to adhere to the timeline.
  • The procedures and the protections involved in the transfer of property title and the handover process once the property is completed.

By scrutinizing these legal elements and ensuring that they are fair and enforceable, buyers can secure their investment and navigate the complexities of off-plan property acquisition with greater confidence and legal safeguarding.


When investing in off-plan properties, identifying and managing risks is paramount to protect your interests. To mitigate these risks, consider the following strategies:

  • Legal Protection: Ensure that your purchase contract includes protective clauses that address potential delays, quality discrepancies, and completion guarantees. Engage with a property lawyer who can help you understand the fine print and advocate on your behalf.
  • Due Diligence on Developer: Beyond the initial research, continue monitoring the developer’s financial health and project status throughout the construction phase. This proactive approach allows you to anticipate any trouble that may affect the timeline or quality of the finished property.
  • Exit Strategy: Have an exit strategy in place should the investment not go as planned. This may include selling your interest in the property or seeking legal action to recover funds if contract terms are violated by the developer.
  • Insurance: Check if the developer has insurance that protects the investment against damage or failure to complete the project. Additionally, obtaining title insurance can secure your investment against potential legal problems connected to property ownership.
  • Flexibility in Planning: Accept that project delays are a common risk in off-plan investments. Plan for flexibility in your finances to accommodate changes in completion dates without overextending your financial obligations.

Understanding and addressing these risks through careful planning and strategic action will enhance the security and potential success of your off-plan property investment.

In the case that the development has already been approved by more than one of the big banks, it could make it easier to obtain finance when buying off-plan. Also, to get an upper hand, get your home loan from the developer’s lender that’s financing the project. This is mainly because they have already evaluated the project and the units that will be built.


Its time to discover your investment potential

Where to find us

Motivation can take you far, but it can take you even further if you first find your vision. Your vision will motivate and guide you on

Operating hours:

Mon-Friday 8am to 5pm; Saturdays 9am to 2pm; Sunday’s 3pm to 5pm


Sales Office:
Unit 3 Bellfour Office Park, Cnr Edmar & Rodger Str, Bellville, 7600


+27 (0)21 979 3918


Jason Green


Clorinda Venter

Sales Contact for Thatchfield



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