PROPERTY TRANSFERS: Expectations vs Reality

When buying or selling property, this can be an exciting time but it can also be nerve wracking or frustrating.

Frustration is usually borne out of unrealistic expectations.  The reality regarding the timelines or costs or both are often glossed over by estate agents in an attempt to secure the sale.  Here is a very brief list of realities!



TIMELINE

The timeline is dependent upon so many interconnected parties and events that a fixed timeline is impossible to predict.  This is a very rough guide.  

If the Purchaser requires finance, there is usually a fixed time for them to secure "approval in principal".  This is usually between 14 and 60 days, depending on the nature of the contract. However, approval in principal does not mean that the Bank has finalised its processes. There may be a myriad of information and documentation that the Bank requires before it is ready to proceed. In an example, from personal experience, an approved set of building plans was required as a condition for the loan. The Municipality had misplaced the plans and new set had to be prepared, submitted and approved.  This took six months.

The sale is frequently subject to the sale of the Purchaser's house.  How long does this take?  How long is a piece of string?

Then there are a number of Certificates that may be required by the Conveyancer (i.e. transferring attorney) before he/she can lodge the Transfer in the Deeds Office for registration.  The most common are:
  • Municipal Rates Clearance Certificate
  • Levy Clearance Certificate
  • HOA Certificate
  • Electrical Compliance Certificate
  • Electric Fence Certificate
  • Gas Compliance Certificate
  • Entomologist Certificate (Beetle Certificate)
  • Plumbing Certificate
Some of these may take months to obtain.

The Offer to Purchase is so very important in trying to mitigate against potential delays.  Having the best Conveyancer attending to the Transfer also helps ... nudge, nudge, wink, wink 😉

COSTS

Many of the above certificates are obtained at the Seller's cost.  The Seller is very often not expecting to pay anything at all and only expects to receive money (i.e. the purchase price).  It often comes as a shock, especially if major repairs are required in order to obtain the certificate.  If there is an existing mortgage bond registered over the property, this must be cancelled at the Seller's cost.  The fee is usually R3,000 to R6,000.  This is the attorney's fee and doesn't include any penalties levied by the Bank.


We also find that the Purchaser is unaware that he/she is liable for both the Transfer Costs and Bond Costs.  There are most often two different law firms attending to register the Transfer (of ownership) and the Mortgage Bond and they must both be paid.  Even if the same firm attends to both, there is a fee attached to both.  Please click on this LINK for our calculator for Transfer and Bond Costs.

People are often confused by Transfer Costs, Transfer Fees and Transfer Duty.

Transfer Fees are the attorney's fees for the legal work. Transfer Duty is the Tax payable to the government (SARS).  Transfer Costs include Transfer Fees, Transfer Duty and any other expenses incidental to the Transfer.


To avoid most of these frustrations or just to request a quotation, please email me at gareth@delberg.co.za


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Denny Crane

Denny Crane
It's not me ... yet. Denny Crane from the TV series Boston Legal. Click on picture if you're not sure who he is!