The art of buying a property

This is the process in a nutshell:  

The person interested in purchasing the property, needs to sign an Offer to Purchase (OTP) in order to get the process started.

An OTP is a contract detailing every aspect and condition with regard to the property that is being sold.

The OTP will contain critical information such as what the buyer is willing to pay for the property, what restrictions and conditions apply to the offer and what items or fixtures are included or excluded in the sale. As soon as both parties (the seller and buyer) have signed the OTP it becomes a legally binding agreement and the process of sale has been set in motion.

Step 2

In conjunction with Step 1, your personal Property Professional will need documentation from both the seller and buyer that is necessary to comply with the Financial Intelligence Centre Act.

The following must be supplied: Your Identity Document, proof of residence, proof of Income Tax number and if you are married, a Marriage Certificate or Ante-Nuptial Contract. Both parties will also have to sign a document acknowledging that they are aware of the Protection of Personal Information Act.

Step 3

The seller will then appoint a transfer attorney who will be responsible for all the legal paperwork and registration of the title deed in the buyer's name. Although the seller is given the opportunity to choose the conveyance attorney, the latter will send an invoice to the prospective buyer.

Step 4

The signed OTP and necessary documentation is then sent to the transfer attorney and bond originator; if it is not a cash sale, the buyer needs to apply for a home loan.

"At Property to Link we make use of an in-house mortgage or bond originator to assist buyers with financing," explains Zani van Wyk, Principal of Property to Link.

"The originator's work is to apply (on the buyer's behalf) to all the major banks in order to secure a loan and get the best possible interest rate."

If a bond has not been secured and that was one of the buyer's conditions for the sale to move forward, the contract will become null and void.

Once the bond has been approved, the bank will appoint their own attorney to handle the registration of the buyer's bond. Something that a prospective buyer must keep in mind is that there are numerous extra costs associated with buying a property such as transfer, bond and banking fees. Make sure you have cash on hand to pay for these fees as well as the deposit.

Step 6

When the bank gives the go-ahead to proceed, all the necessary paperwork will be submitted to the Deeds Office, this step is called Lodgement. It takes more or less ten days for registration to take place after Lodgement.

The day before the actual transfer of the property takes place is called Prep (short for Preparation). "The Deeds Office will advise the transfer attorney more or less the day before registration takes place," explains Zani.

Who pays for what?

- The seller is responsible for the estate agent's commission; he/she must also hire a qualified electrician to issue a legal Certificate of Compliance (CoC) as well as a gas and electric fence certificate (if necessary). The call-out fee for the electrician and cost of the CoC's are for the seller's account.

- If the property forms part of a sectional title unit, the seller needs to obtain both Levy and Rates clearance certificates from the Body Corporate (there will be extra costs involved). The Body Corporate will also require that the seller must pay a few months levies and rates in advance.

- The purchaser is responsible to pay the transfer duty (if applicable), tranfer attorney fees, bond registration cost, initiation fees, bank charges and occupational rent (if the buyer decides to move in before the house has been registered).

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