What are the relevant documents when buying a home?

Buying a home is one of life’s most exciting events but the paper work associated with buying a home can be overwhelming. We create this piece to help you through the process. 

Before you can formally move into your new home, a number of procedures must be followed.

The first important document is the Offer To Purchase, which outlines all of the terms and conditions for both the seller and the buyer of the property. The moment the seller accepts the offer, they are bound by law to sell their house.

The seller hires a conveyancing lawyer to transfer the property into the buyer’s name after the purchase price is secured. The price of the property can be paid in cash or through financing. Once this is done, the documentation is signed by both the buyer and the seller.

The buyer engages a bond attorney to register the bond. The attorney creates transfer documentation for both parties to sign, including a SARS transfer duty stating the details of the transaction and a FICA affidavit verifying each party’s identity.

Depending on a number of variables, the bond registration process can take up to three months on average.

A title deed is obtained using the documentation passed from the bond attorneys and as well as the electrical payable rates and taxes for your new home and all the relevant clearance documents from the local municipality.

Finally, a new title deed will be issued, which could take up to 10 working days, establishing the buyer as the new registered owner of the property.

 

What are the common home buying mistakes?

Below are a few mistakes to avoid when you are looking to buy a home.

1. Starting the approval process too late

This has proven to be an important decision in the process of buying a home. Getting early approval allows the buyer enough time to scout the market and get the best offer. This is the time where the buyer needs to weigh their options and look for the best repayment rate. If the buyer chooses a variable interest rate, they need to bear in mind that this rate can increase or decrease according to the market and it is better to remain on the safe side of the margin. Most buyers choose variable rates as these generally start off low. Fixed rates are higher but will not vary over a certain period.

Weighing your financing options is an important process in this step. Visit different banks and compare interest rates in order to find the best rate and if you can, it is also advisable to get a bond consultant/originator to negotiate your rates and act as an intermediary between you and the banks.

2. Not working with a real estate agent

Not working with a real estate specialist has various implications which are often overlooked by buyers. Buyers often don’t understand how property pricing works per neighbourhood due to this the buyer won’t be informed enough to make a viable offer. Buyers often overlook the value of certain amenities in certain properties, they might have the perception that they can negotiate the prices on properties. Understanding the market of the neighbourhood will let you know which properties to negotiate and which properties not to.

Another mistake is relying solely on the information you see online. As much as it is important to check properties online, it is also important to do your own research on both the properties you are interested in as well as the neighbourhood,  also looking into getting public record information about your property from the local municipality.

3.  Ignoring problems because of pretty features

A property buyer should avoid ignoring concerns because of beautiful features. Pay attention to sloping floors and damaged walls because paying astronomical sums for repair initiatives will not be worthwhile in the long run. It is crucial to properly evaluate every component of your property during an inspection, including the doors, windows, flooring, lights, faucets and walls. Older homes especially need to be carefully examined. If possible, hire a home inspector to complete the task for you before making the purchase.

4. Buying more home than you can afford

Most often during the process of buying a home, buyers tend to come across what seems to be their dream home. During this period it is important to stay on track and not to spend more than was originally budgeted for. Yes, you can cut down on life’s luxuries but a big purchase such as this could start to take a toll on your finances as the reality seeps in.

 

What are the legal and procedural aspects of buying/selling a home which people need to be aware of?

1.  Declaring issues on the property

According to South African law, property owners are required to identify any flaws in their property as well as any unusual features the property may have.

In order for the potential buyer to be informed of all flaws on the property, the real estate agent gives the seller a defects disclosure document to complete. This guarantees that there are no ambiguities regarding the flaws of the property being purchased.

2.  The implications of a binding Offer to Purchase

It could be inconvenient and expensive to change your mind if you choose not to honour your Offer to Purchase (O.T.P.) for any reason. The sale agreement is enforceable if the seller signs your O.T.P. There could be significant financial repercussions if you fail to fulfil your portion. For instance, you can lose your deposit, if you paid one, or be held liable for the estate agent’s fees and profit if one was included in the agreement. You must therefore comprehend the O.T.P.’s terms and conditions before signing. Legal examination will not support your claim that you were unaware of what you were agreeing to.

3. Agents need to properly certified

We frequently read and hear about unfortunate members of the public who were allegedly duped by an estate agent, but in the vast majority of these instances it turns out that the individual was actually just someone masquerading as an agent, showing that people aren’t informed enough to tell the difference.

It is important for a buyer or seller to do their research on the agents they are working with, for instance visiting their website, social media and taking the time to meet the agents as soon as possible.

All Home & Hectare agents are certified and registered, our agents make sure that the processes involved in buying or selling a home flow smoothly.

Contact us for a walk through on the various home buying / selling processes on 041 581 1744 or email info@homeandhectare.com, and one of our Property Specialists will assist you in your sale.