Once your Offer to Purchase has been accepted and the Bank has approved your loan, the house then needs to move from the name of the Seller into the name of the Buyer.
To start, the 7 key members needed to complete the process are:
1. The Seller
2. You, the Buyer
3. A Transfer Attorney
4. A Bond Cancellation Attorney
5. A Bond Registration Attorney
6. The Registrar of Deeds
7. The Estate Agent and the Mortgage Broker are generally involved early on.
Step 1: The transfer of property
The house needs to move from the name of the Seller into the name of the Buyer. First, the Transfer Attorney, who is appointed by the Seller, prepares all the documents needed for registering the property transfer. The most important documents include the Title Deed and cancellation figures from the Bank, and a rates clearance certificate which serves as proof of payment for rates and taxes from the relevant municipality. Once these documents are ready, the municipality will provide the Transfer Attorney with a rates clearance certificate and SARS will issue a transfer duty receipt after receiving payment.
If a property is worth more than R600 000 then the Buyer will have to pay the required transfer duty on this house. The duty is calculated on a sliding scale according to the purchase price of the house and is payable to SARS. At this stage the Buyer is required to pay the pro forma account which is an estimate of the transfer costs. This estimate consists of the transfer duty mentioned above, conveyancing fees charged by the Transfer Attorney and pro rata rates or levies.
Step 2: Preparing the bond documentation
The Bond Attorney now prepares the bond documentation with the Buyer. This includes preparing the Buyer’s home loan account. The Buyer then signs these documents and pays all the costs involved to the Bond Attorney.
Step 3: Cancelling the bond
The Bond Attorney will submit these documents and guarantees to the Transfer Attorney for submission to the Deeds Office; however, the Bond Attorney and Transfer Attorney may be the same person. Copies of these documents and guarantees will also be given to the Cancellation Attorney, who uses them to gain consent from the Bank for cancellation of the Seller’s bond.
Step 4: The Deeds Office
Once all the documents have been signed and all the costs have been paid, the information will be simultaneously lodged at the Deeds Office by the relevant Attorneys. These documents include: Deed of Transfer, Buyer’s bond information and transfer duty receipt from the Receiver of Revenue.
The Deeds Office will take 2 – 3 weeks to verify all submitted documents depending on the various circumstances; once complete, all Attorneys involved will be notified. The final step of bond registration will take place on the same day.
Step 6: Payment of the home loan
On the day of registration the Bank pays out the amount needed for the home loan and the Buyer officially becomes the owner of the property. This entire registration process typically takes at least 3 weeks to complete.