Personal-Finance

The legal steps to purchasing a house

2019-01-18 17:34

City Press asked Lebohang Modise, head of the offers desk at online property agent PropertyFox, to outline the steps involved when buying property. 

WHAT INFORMATION DOES A BUYER NEED TO PROVIDE TO MAKE ON OFFER?

We would require the buyer to provide us with their personal details and the offer structure so that we can draft the sale agreement (offer to purchase).

This would include their full name and surname, email address, physical address, offer amount and the type of offer (bond, cash or sale of property), as well as any conditions they require to make their offer.

When they return the written offer, the buyer would need to provide us with their Fica documents.

This includes a copy of their ID or passport (if the buyer is foreign), proof of address (local authority account or telephone account, not older than three months), an SA Revenue Service document reflecting their income tax number, and a marriage certificate, including an antenuptial agreement if applicable.

Sellers may ask if the buyer has received a bond indication of affordability, especially when there are multiple offers, to help them make an informed decision.

It is also a wise idea for the buyer to know this as they are able to make an informed offer.

SHOULD YOU USE A CONVEYANCING ATTORNEY? AND HOW MUCH WOULD THAT COST?

The most important attorney that needs to be appointed by the seller is the transferring attorney. They make sure the transfer runs accordingly and they liaise with the attorneys doing both the bond and the bond cancellation.

The costs for transferring attorneys is paid for by the buyer and that is dependent on the purchase price. The costs work on a sliding scale.

For example, if you are buying for about R300 000, you can expect to pay about R10 000; for R500 000, that would increase to about R15 000; and R800 000 would be about R16 000. Buyers can negotiate to appoint their own attorney for the offer to purchase.

HOW CAN YOU PROVE THAT THE SELLER IS THE ACTUAL OWNER?

The easiest way is to work through an agency to ensure that you don’t get scammed. The buyer, using the seller’s ID or passport, needs to check that the seller is registered at the deeds office.

We check the criteria provided against what is lodged at the deeds office either through WinDeed or Lightstone. We check and verify all requests to sell property with the ID or passport through the deeds office.

In turn, we also check all buyers’ profiles against the ThisIsMe database, among a few other checks. This acts as additional security against any kind of fraud on both sides.

If you are not working through an estate agent or attorney, the buyer can sign up with a service called WinDeed. You’ll need the name, surname and address of the individual selling the property to check that they are indeed the owners.

If you’re able to get a copy of the ID or passport, that is even better. Go to windeed.co.za to check the details.

WHERE IS THE TRANSFER OF THE PROPERTY REGISTERED?

The province in which the property is will determine the deeds office where the property is registered. A transfer normally takes two to three months, depending on the suspensive conditions that need to be met (such as a cash offer or bond offer).

Once suspensive conditions are met, the transferring attorneys need to complete certain prerequisites before the paperwork is submitted to the deeds office.

DOES THE SELLER NEED TO PROVIDE A MUNICIPAL CLEARANCE CERTIFICATE?

The municipal clearance certificate is one of the prerequisites for a transfer to take place – the deeds office will not register a property without it.

If sellers owe money to the municipality, they need to pay the arrears account before proceeding.

Should the seller have financial restraints and be unable to pay their arrears, there are companies that provide bridging finance as long as there is a surplus from the sale of the property and the transferring attorneys are also willing to authorise it.

The transfer attorney helps the seller to ask for rates clearance figures, which need to be paid by the seller, who will ultimately receive the municipal clearance certificate.

The clearance figures are typically the normal rates bill multiplied by three or four to ensure the seller is covered for the period until the transfer. Once transfer takes place, the seller will be refunded for any overpayment.

DO YOU HAVE TO REGISTER WITH THE MUNICIPALITY AS THE NEW OWNER? WHAT DEPOSITS NEED TO BE PAID?

The deeds office provides the municipality with proof of registration, but there are some municipalities that require the new owner to go to the municipality and physically register as the new owner.

The transfer attorneys will advise the seller to go to the municipality and deregister the property. Then the new owner should go to register at the municipality and ensure all their details are correct.

They would need to provide the municipality with a proof of registration letter, which the attorneys will provide, and will most likely have to pay a prorated municipal cost should the transfer take place during the course of the month.

OFFER TO PURCHASE FORM

If you are not using an estate agent, you can download free offer to purchase forms from websites such as LegalWise, or buy a Hortors contract from stationery stores.

Read more on:

house
investment
home
Read News24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Add your comment
Comment 0 characters remaining

May 19 2019