Have every document explained to you by your own legal expert. FILE PHOTO | NMG
Many would be home buyers are deterred from attaining their ownership dreams by the large price tag that comes with purchasing a house. To cater to this group of people, real estate developers have devised a new trend: selling off-plan.
This is where you start to pay for a home while it is still being built. Typically, you put down a deposit and make regular payments throughout the construction period. This way, by the time the house is complete, you have finished paying for it and you can move in, rent it out or sell it. This model allows those who want to buy to do so without a strain.
However, unscrupulous individuals are taking advantage of this to dupe unsuspecting would-be home buyers. They use the promise of an unbuilt home to get you to make regular payments. If you want to buy off plan but want to avoid being conned, here are a few things you could do:
1.Inspect
Seeing is believing, right? If you have entered into an off-plan agreement with a developer, it is probably a good idea to visit the construction site periodically. If you are unable to go there physically, ask someone you trust to do it for you.
Pay close attention to the progress of the building, or lack thereof. Is it on track? Is the developer forthcoming about any delays being experienced? It is difficult to dupe a person who is paying close attention.
2.Conduct due diligence
Buying a home is a big step, not just because it is a sign of achievement, but because it will have a huge impact on your finances. If you are going to commit so much of your money into something, you cannot afford to go in blind.
Sure, some offers seem too good to pass up, but this should not prevent you from doing your due diligence.
Has your real estate developer delivered other projects or do they have scandals to their name? Is the project feasible? What do independent experts have to say? Unless you have complete trust in your developer, you probably should not get into bed with them.
3.Get legal advice
A cliché that gets tossed around a lot is “the devil is in the details” probably because it has never stopped being true.
Unscrupulous parties will present you a deal that seems too good to pass up and create a sense of urgency to tie you to an agreement.
As an excited first time homebuyer, you might sign in a hurry and bind yourself to a contract that is not in your best interests.
To avoid this, have every document explained to you by your own legal expert. Also, make sure you keep copies of everything you sign.
4.Plan your finances
Purchasing a home is going to put a huge dent in your spending. Therefore, you have to plan accordingly for it. Make sure you find a payment plan that will work and do not miss any instalments.
Your contract might include penalties for any delayed or missed amounts, some of which may be very punitive.
Even if there are none, you do not want to lag on your payments because it would be difficult to hold the developer accountable when you are also not holding up your end of the deal.
Gitonga Muriithi is head of sales and marketing, Centum Real Estate.
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