Most first-time home buyers ask, why the lengthy time delay between signing of the offer to purchase and registration of ownership? Here is why!

Why should I involve a conveyancer from the outset?

The pre-contractual  process is typically initiated by the owner giving a mandate to an established estate agent to market their property. The experienced estate agent will provide the seller with a CMA (Comparative Market Analysis) which should assist in determining the current market value.

It is advisable to involve the local conveyancer at the pre-contractual stage to advise on issues such as suitable mandates, title conditions, impeding interdicts, municipal clearance certificates, risk factors and so forth. A conveyancer who is readily available for a quick check-in is invaluable. Being kept up to speed and receiving weekly updates is non-negotiable, as it prevents the parties from getting frustrated.

The conveyancer is very much aware that for most people, owning property will be their largest and most important investment. Conveyancers are qualified attorneys specializing in property law and who are responsible for the complicated conveyancing process, which involves more than 50 activities and up to 12 parties.

Once the seller has accepted an offer to purchase, the buyer's bank will carry out a valuation and might also have a survey done on the property. After the purchase price has been secured, the transfer process begins.

How many Attorneys are involved?

There are typically three sets of attorneys involved in attending to:

• The transfer of ownership from the seller to the buyer;
• Securing the buyer’s new bond or home loan on the property; and/or
• The cancellation of the seller's existing bond.

   

  The transferring attorney is usually appointed by the seller, while the cancellation and bond attorneys are selected by the relevant bank  . The buyer is responsible for the payment of both the transfer fees and mortgage bond registration costs and it is advisable to get a quotation for these costs upfront. In some cases, banks will allow for  transfer fees to be added to the bond amount, however, having the cash on hand to cover these costs will save money in the long term.

   

  What does the Conveyancing process entail?

   

  The process of transferring the ownership of a property from the seller to the buyer can take between six to twelve weeks, or even longer should there be any unforeseen delays. For example a delay in the issue of clearance and transfer duty certificates.

  Parties usually do not wait for the transfer process to be completed before occupation and therefore determine the occupation date and monthly rental in the deed of sale. In the event of registration taking place during the occupational rent period, the rental is calculated pro-rata and the balance is repaid to the buyer.

  The conveyancer’s tasks, amongst others, consists of:

• Ensuring the validity of the offer to purchase through deeds searches;
• Preparing the complying formal transfer documents and attending to the signature thereof;
• Requesting the buyer to pay the costs;
• Ensuring the fica compliance of the parties;
• The application and payment of rates and/or levy clearance certificates;
• The application and payment of transfer duty; and
• Arrange compliance certificates i.e. electrical installation and electrical fence certificates and so forth.

The conveyancer also needs to settle the finances by obtaining the cancellation amount from the seller’s bank and requesting guarantees from buyer’s bank, thereby securing the outstanding amount on the seller’s mortgage loan and balance of the sales price and the purchase price.

When is ownership transferred to the buyer and proceeds paid to the Seller?

The final stage involves administering the simultaneous lodgment of the transfer, the buyer’s new bond and the cancellation of the seller’s existing bond with the relevant Deeds Office. Their personnel examine all the documents for compliance with the Deeds Registries Act, Rules and Regulations. Thereafter, the conveyancer and the registrar of deeds simultaneously execute the document by way of signature – this being the moment the property is transferred to the new owner!

On the same day, the conveyancer settles the payments to the seller’s bank, proceeds to the seller, the estate agents commission, the buyer's interest on monies invested, and renders the final accounts to the seller and buyer.

At last, it is time for the parties to celebrate: the buyer for their new home, the seller for the profit they have made and the agent for a successful sale!