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Making sense

13 December 2012

So you’re selling your existing property and planning a move into the home of your dreams. Your offer to purchase has been accepted, and you’re already working out what colour to paint the walls in your new abode.

Yet the process of transferring a property can be both time consuming and expensive, bringing with it a vast volume of paperwork and unforeseen costs. Many buyers and sellers enter into this process completely unprepared, failing to take into account the implications from both a time and budgeting perspective.

So before signing that sales agreement, make sure you’re aware of how the transfer process works, and take note of the following tips in order to ensure that your property transfer is as smooth and hassle free as possible.

Budget Carefully
Property buyers often make the mistake of thinking that transfer costs can be settled once the sale of the existing property has been processed. However, in most cases, these fees are required several weeks in advance of the official transfer date, and thus need to be worked into your budget.

Late payments can cause serious delays in the transfer process, as your conveyancer will be unlikely to process the transaction should these fees not be paid at the designated time.

As a buyer, you’ll also be obliged to pay transfer duties to SARS. These are calculated on a sliding scale for all properties being sold for R600 000 or more. As a general rule of thumb, you can expect to pay an extra 7.5% or so on a property valued at R1 million.

So before signing a sales agreement, ensure that you understand all the transfer costs involved, and make provisions for them in your budget.

Get Certified
In order to expedite access to the proceeds of your sale, make sure that you obtain electrical, plumbing, gas and borer beetle certificates for your existing property once the sale agreement has been signed.

While you might have an existing electrical certificate, these are only valid for two years, so make sure yours is up to date unless you want to encounter significant delays in the sale.

Should the buyer of your existing property be applying for financing from the bank, they will be unlikely to be granted this until they can produce a valid electrical certificate, further slowing things down. So in order to facilitate a speedy sale, make this an issue of top priority.

Know Your Rates
The cause of the majority of delays in the transfer process lies in the acquisition of a rates clearance certificate. This is a document issued by your local council stating that the property’s rates are up to date. Without this, the transfer of sale cannot take place.

In order to acquire this certification for your existing property, you may be required to make up to 5 months’ worth of rates payments upfront, something which is often not considered as part of your moving budget.

In order to save time and hassle, consider using a service such as Korbitec’s Payment Solutions, which pre-authorises funds on your behalf, which are paid directly to the municipality once the rates application has been completed. You will only then be required to pay back this amount once the sale has been processed and you have access to the proceeds.

Making use of a service like this will not only help to expedite the transfer process, but will leave you with funds available to deal with the many other costs you’re likely to incur during your move.

Synchronise Occupation and Transfer Dates
Another issue that frequently causes delays and stress is confusion that arises over the dates of transfer and occupation. In many cases, sellers will agree to the buyer taking ownership of the property prior to the completion of the transfer, with occupational rent being paid to cover bond expenses.

While this can be a suitable arrangement for both parties, it can lead to a number of issues that might end up further slowing down the transfer process. As a seller, you may find yourself being expected to rectify any property faults that might have escaped the buyer’s attention during initial inspections. While most ‘voetstoots’ clauses will protect you from any legal obligations in these instances, your buyer could end up significantly delaying the transfer process.

As such, it’s advisable to ensure that occupation and transfer dates coincide, even if this causes the buyer the inconvenience of having to seek temporary accommodation in the interim.

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