Most people breathe a sigh of relief once a bond has been approved, believing that the sale is now a done deal. Unfortunately, there is a long road ahead and still a lot of work to be done before the property is transferred.
Ask any estate agent and they will tell you that the real work only starts once the bond has been approved. Transferring a property is a complicated matter and involves a number of different people with different skills who play different roles in the property scenario.
As soon as the bond is approved the buyer will be required to sign a plethora of paperwork with the bank itself. Documents will include
details of the bond, including the agreed interest rate the buyer will pay; the terms of the agreement, ie: the duration of the loan; the amount of interest that will be paid overall as well as the costs to register the bond.
There are also hidden costs involved when investing in property. Very often, although buyers are aware of the amounts needed for a
deposit and are comfortable with the monthly installments, the added expenses come as a bit of a shock. Lawyer’s fees, valuation fees, transfer duties and bond registration fees all need to be factored in to the deal. Depending on the value of the property, these amounts can run into thousands of rands.
Once the bank is happy that the buyer has met all its requirements and all the relevant documentation is signed and sealed, the paperwork is sent to a conveyancing attorney. Banks have a panel of attorneys who oversee this vital part of the transaction. All of the firms and lawyers involved have gone through a rigorous screening process and have been appointed by the various banking institutions to handle the registration of mortgage bonds.
The appointed attorney, under instruction from the bank, will draw up the contract between the purchaser and the bank in terms of the stipulated agreement. The attorneys then contact the buyer and arrange for the relevant documentation to be signed in order for the transaction to be registered in the buyer’s name at the Deeds Office. It is important to note that although the purchaser takes ownership of the property on the date of transfer, the bank is a party to the agreement for the duration of the loan period and as such, the name of the bank that granted the bond will be reflected on the Title Deed.
South Africa has an outstanding record as far as its property ownership laws go. These essentially protect all parties from the fraudulent activities that take place in other countries.
Once all the necessary documentation has been signed, all of the records are sent to another attorney who double-checks that everything is in order before submitting the final paperwork to the Deeds Office. The Deeds Office registers and records every property owned in South Africa and generally speaking, once the documents arrive here, registering the property is a mere formality.
Although the process appears easy, a number of things can go wrong during this time. Banks are unfortunately notorious for throwing spanners in the works and just when the buyer thinks that he has satisfied all of the financial institution’s requirements, he will often be called upon to supply additional documentation. While this process may be frustrating, it needs to be remembered that it is absolutely vital for everything to be in order as a mistake made when you are dealing with products as valuable as property can prove to be incredibly costly.
Buyers need to keep their eye on the bigger picture, the process may be lengthy and many of procedures they are forced to follow may seem pointless, but once transfer has taken place and they are happily ensconced in their new home, most if not all, will forget the frustrations involved.