One of the key risk factors when buying a building package or buying off-plan is that you buy from a reputable developer.

You could suffer significant financial losses if the developer delivers a poor quality product or, even worse, does not even deliver your home because they go out of business before they have completed the project.

Property development is one of the riskiest businesses and so this happens more often than you think. For example, Basil Read Limited that was the No. 1 Company in South Africa in 2008 and 2009 according to the Sunday Times Best Companies survey went into business rescue in 2018 - just 10 years later!

8 key indicators that you should consider to help you determine if you are dealing with a reputable developer:

1. How long have they been in business? Businesses that have been in existence for longer or have an experienced management team are more likely to have the expertise to deliver high quality products.
2. Visit previous developments done by the company. This is a great way to see if the developer delivers a product that can stand the test of time. So, don’t only visit recent developments - ask to see a development that they did 3 or 5 years ago.
3. Ask other buyers about their experience. Take the opportunity while on site to ask existing buyers about their experience in dealing with the developer. How did the developer deal with complaints? Did they deliver on time? You can also get a sense of how seriously they take client service by checking out comments that other customers may have left on their Facebook page or posts or you can visit hellopeter.com and search there to see how they deal with complaints.
4. What is the developer’s cancellation policy? Sometimes things just don’t go as planned and you may be forced to cancel your purchase. The best developers are concerned about their brand and are interested in protecting this in the long run. They will have policies that make it easier for you to cancel now and come back when you are ready to purchase again.
5. What warranties does the developer provide? Find out the developers policy for dealing with defects in building quality and materials and the length of any warranties provided. As a minimum you should be covered for 5 years on any major structural defects through the NHBRC, 12 months against any roof leaks, 6 months on the geyser and 3 months for all other aspects of the building.
6. Does the developer have a up to date National Home Builders Registration Council (NHBRC) enrollment certificate? Check if the developer is also doing the construction. Often developers will subcontract the construction of your home - so make sure the builder has the necessary NHBRC enrollment. This is not a guarantee of quality but it is a legal requirement and it does mean that the construction will have to meet certain minimum standards. If they are properly registered and the required enrollment fees for your home are paid you will be protected against major structural flaws in the construction for a period of 5 years.
7. Does the developer comply with SANS 10400 XA energy efficiency regulations? Since 2014 all newly built homes must have a solar geyser or heat pump to provide hot water and must meet certain guidelines for insulation of the house to keep it cool in the summer and warm in winter. You may find that some developers continue to illegally build homes that ignore these regulations. The houses may be cheaper but you will pay for that upfront saving by paying substantially more for electricity in the future, not to speak of contributing to global warming!
8. Impression on site. Note the cleanliness and health and safety measurements put in place on site. Are the staff and vehicles easily identifiable? These give the impression that the company not only cares for its employees, but is more likely to care for its clients and deliver a quality product.

If you have any doubts about a developer - keep on searching. There are many reputable developers out there and buying a house is a huge investments - so it is worth your while finding a developer you can trust!

To learn more about the 7 steps to successfully buying a home click here.