Buying from a developer vs building from scratch: What homebuyers need to know
Nimmi Kowlaser, an estate agent from Saitis Properties, explains why doing your homework before buying property can save you from expensive surprises.
Buying property is one of the biggest financial decisions many people will ever make. Whether you choose an existing home, a property from a developer, or vacant land to build your dream home, each option comes with its own advantages and costs.
According to Nimmi Kowlaser, an estate agent from Saitis Properties, who has been in the industry since 2002, one of the biggest mistakes prospective buyers make is allowing excitement to overshadow proper research.
She says buyers should first assess their finances and understand the full cost of each option before making a decision.
One of the most common misconceptions, she explains, is that buying vacant land is always cheaper than purchasing a completed home or buying directly from a developer.
In reality, that isn’t always the case.
“If you don’t have the cash to buy the land, you could end up paying much more because you’ll likely need two bonds - one for the land and another building bond to finance the construction of the house,” says Nimmi.
She advises buyers to consider applying for a building bond at the same time as the land purchase, unless they have saved enough to buy the vacant land cash.
“It’s a bit tricky if you don’t take out a building bond upfront. If you finance the land first and only later apply for a building bond, you may end up carrying two financial commitments. For the average person, those costs can become quite significant,” says Nimmi.
While building from scratch offers the freedom to customise your home, Nimmi says many buyers underestimate the additional expenses that come with the process.
These include architect fees, engineering fees, municipal submission and approval costs, project management, and other professional services that are often included when purchasing from a developer.
“When you buy from a developer, they typically handle the project management, appoint the architect and engineers, obtain council-approved plans, and cover many of the administrative costs. If you’re building on your own, all of those expenses become your responsibility.”
According to Nimmi, these additional costs can easily reach around R250 000 before construction even begins.
She says many buyers don’t fully consider these expenses because they’re focused on securing the land.
When it comes to which decision is best, ultimately, Nimmi says there is no one-size-fits-all answer. The right option depends on a buyer’s budget, financial circumstances and long-term goals.
Her advice is simple: do thorough research, understand all the costs involved, and make an informed decision.
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