Selling your home may be more complex than you think.

Category 3%.Com Properties

Make sure you get the right advice

At 3%.Com Properties, we have come across many instances where buyers and sellers are misinformed and not given legally correct information, often leading to problems.

To begin with, a sale of residential property, and the sale agreement itself, is a very important and powerful contract. This type of sale is unlike other sales, in the sense that certain formalities are required. Section 2 of the Alienation of Land Act, 68 of 1981, determines that no alienation of land shall be of any force or effect unless it is contained in a deed of alienation signed by both parties or their duly authorised agents. The agents referred to are appointed through the force of law and are not ‘real estate agents’.

Beyond the fact that a sale agreement needs to be in writing, which is often in the form of an Offer to Purchase document (“OTP”), the gravity of such an agreement is considerable. Once the OTP has been signed by the parties, the sale agreement comes into effect and it is a fully enforceable contract. Once you sign an OTP, there is no easy-way out, you cannot simply decide that you no longer want to buy the house because you have cold feet, or you are put off by of the costs involved.

Furthermore, it is important to understand all the costs involved.

In a property sale, the following will usually be deducted from the seller’s proceeds:

1. 3% agents commission, or between 5-8% if using a normal estate agency.
2. Rates and taxes
3. The final settlement amount on the existing bond.
4. The cancellation costs of the attorneys attending to the cancellation of the existing bond (attorneys appointed by bank where the bond is held).
5. The costs of obtaining an electric compliance certificate.
6. Levy and/or home owners’ association clearance figures and certificate.

There are certain things to specifically look out for when selling a property. Firstly, most banks stipulate that they are required to give a 90-day written notice of their intention to cancel their bond. A failure to timeously provide this notice results in a penalty amount being added to the final settlement amount, which can be a costly surprise, so be careful.

When purchasing a property, the following costs are generally involved:

1. Full purchase price (if a cash deal)
2. Deposit (paid to transferring attorney, never the estate agent)
3. Conveyancers - bond registration
4. Transfer duty (government tax)
5. Conveyancers fee - property transfer
6. Initial home loan charges
7. Municipal provision for rates and taxes
8. Occupational interest (payable if occupation is taken before date of transfer)

This is simply a brief overview of the costs involved in selling or buying a property and an indication into some of the processes involved in a sale or purchase. It is worth noting that much of the process falls outside the realm of a conventional estate agent, which is why it is critically important to have the advice of an attorney throughout the process to avoid any unwanted hiccups.

At 3%.Com Properties, we are lawyers selling property, and we take care of the sale process, from marketing and selling through to finally transferring the property into your name, all with specialised legal advice along the way.

Author: 3%.Com Properties