Legal Articles

The process of buying a house in South Africa can be broken down into 12 steps which we will explain in this article.

Many potential homeowners aren’t aware of what exactly happens once their bond has been approved. Generally speaking, it takes approximately three months after the bond approval for it to be registered.

Process of Buying a House in South Africa

The following steps describe the 12 steps that are usually taken when buying a home:

• You, the purchaser, and the seller of the property sign the offer to purchase
• If necessary, you make an application for a bond. Every institute at which you apply will provide you with a bond quotation. Once you accept your preferred quote, the relevant bank will instruct the bond attorney to begin the process of registering the bond
• The seller advises the conveyancing attorney to transfer the property to your name. The attorney will request the title deed and cancellation figures from the bank at which the seller’s current bond is held. Lastly, a statement of rates and taxes is requested from the local authority or municipality
• The bond attorney communicates the amount available for guarantees and requests the draft deed of transfer as well as the guarantee requirements from the transferring attorney
• The cancellation attorney is requested to cancel the seller’s current bond on receipt of a guarantee for the amount owing
• The transferring attorney receives the title deed and cancellation figures before sending a copy of these to the bond attorney. You and seller are then requested to sign the transfer documents. You are then required to pay the transfer costs which allows the transferring attorney to pay the rates, taxes and transfer duty
• The bond attorney will then prepare the necessary bond documentation before you sign these documents and pay the relevant costs or fees. The bond attorney prepares and issues the guarantees before forwarding them to the transferring attorney. The bond attorney will also prepare the bond documents for registration at the Deeds Office
• The guarantees are received by the transferring attorney and forwarded to the cancellation attorney
• The bond attorney obtains permission for cancellation from the bank that is holding the seller’s current bond
• The new bond and cancellation bond are prepared by the respective attorneys for lodging at the Deeds Office. This can only take place after all the necessary and relevant documents have been signed and all costs have been paid
• It will then take approximately 8 to 10 business days for the Deeds Office to examine the submitted documents and provided there are no changes needed, the transaction is registered
• The bank then pays out the loan according to the guarantees issued. This is done on the day of registration. An additional and minimum three-month waiting period is required for the registration and transfer of the bond

First Time Home Buyers Guide South Africa

The above-mentioned steps highlight the legal and technical process of buying a house in South Africa.

However, there are a few other aspects that you should consider after you have signed your offer to purchase and even once your bond has been approved.

Renovations

The idea of officially owning your first home is very exciting and understandably so and you may feel the urge to start making it your own.

However, it’s advisable to hold back on your burning desire to make any renovations to the property – minor or major – until the transfer has gone through completely and the property is registered in your name.

Although it’s not extremely common, there are circumstances which cause the transfer to not go through later on in the process. If this happens, you will not be allowed to claim back any costs incurred on repairs or renovations to the property.

Save Your Money

Although you may be itching to start spending money on decorating your new home or, giving your room the makeover you have always dreamed of, it’s better to save all you can, while you can.

The three-month waiting period seems like an eternity when all you want to do is make your house a home, but it can be a financial blessing in disguise.

Use this time to save as much money as you can for your very first bond repayment. When you pay more than you are required to each month, you can significantly reduce the total bond repayment amount – a wise, long-term financial strategy.

Van Deventer & Van Deventer Incorporated – Conveyancing Attorneys South Africa

Our conveyancing attorneys in Johannesburg and Cape Town understand how exciting it is to make an offer to purchase on your very first home.

The process of buying a house in South Africa can be complicated, however, our conveyancing attorneys can assist in making it easier to understand.

If you would like more information about how our conveyancing or transferring attorneys can assist you with your first home purchase, please contact us.