Considering a new development? Read this first.
Category News
Despite the tough current economic conditions, a surprising number of new developments are still being advertised in Cape Town's northern suburbs. Rowan Alexander, Director of Alexander Swart Property, says this may not be entirely good news. To "the trained eye", some of these developments are showing signs of being "maybe" or "let's give it a go and see what response we get" projects.
"Anyone with experience in marketing new developments, as we have at Alexander Swart, knows that there are always small handfuls of hopeful, but under-resourced developers, who will try to get a project off the ground but lack the ability to hang in there if sales are slow. Sometimes they minimize their risk by buying the land subject to a variety of conditions; especially the one that states the deal cannot go through unless a stipulated number of sales are signed for - and they have other ways of remaining uncommitted," says Alexander.
Such "maybe" developments are a menace to the property sector, says Alexander, because they can cause committed buyers to wait lengthy periods of time; on occasions as much as 18 or 24 months, before the developer shows his hand and admits he cannot go ahead. In the worst cases the developer may go as far as accepting a deposit from the buyer which he does not refund when he "disappears". Even if the potential buyer is not financially involved, he may well miss out on other really worthwhile developments in his price range, brought to the market during the waiting time.
So what advice does Alexander have for those contacting an unknown developer with an apparently attractive offer?
- Firstly, do not sell your current home until matters are 100% settled, even if you get a good offer. You could end up with no home at all.
- Secondly, read the Alexander Swart articles on this subject which can be found in their face book pages.
- Thirdly, investigate your developer's track record very, very carefully. It is quite possible he will either have no website or one with minimal information and no references from previous clients, or information on how to contact them.
The best advice Alexander can give is to contact an estate agency that has been active in the area for a long time and ask them for a frank appraisal of the developer. It is a bad sign if they know nothing about him. Better still, ask the agent which reliable and reputable developers he knows and deal only with those, if possible.
"These chance operators tend to live with unrealistic hopes. They may be innovative and have marketing and design skills but they lack credibility. Steer clear of them until they have genuine successes to their names."
For further information contact Rowan Alexander on 082 581 3116 or by email rowan@asproperty.co.za
Author: Rowan Alexander
