FREQUENTLY ASKED QUESTIONS 

BUYING REAL ESTATE 

What should I do before I start looking for a property?

Before you start your property search, you should have a clear understanding of your affordability and the finance options available to you in that country. Factors such as being a first-time buyer, credit scores, being employed or self-employed, the consistency of your earnings, and whether you are a resident of the country where you would like to purchase, or a foreigner, will impact the percentage of the purchase price that you are able to secure through finance (mortgage bond) from a bank or lending institute. 

I am looking to invest in property in Germany or the United Kingdom. How different are the purchasing costs/structures to South Africa?

While there are some differences in the percentages of costs, taxes, estate agent fees, and how much you can finance, there are surprising similarities between purchasing real estate in South Africa, Germany, and the UK.

The table below provides a guide for typical scenarios; although each mortgage application will be handled on its own merit. Banks may offer more (or less) favourable terms based on various criteria, including their appetite for lending in that particular market.

BUYING IN SOUTH AFRICA

How do I work out how much I can afford?

South African banks will consider up to 30% of your gross income. You can establish your affordability by either using a calculator on one of the many mortgage originator websites (our preference is Multinet Home Loans; or the OOBA mobile app), or through a complimentary consultation with our mortgage bond originator at Multinet. Once you know how much the banks will be willing to lend to you, you can start the exciting process of shopping.

Should I get an estate agent’s help to buy a property? 

In South Africa, estate agents are nominated by and paid by the seller of the property. It is however becoming increasingly common for buyers to enter into a buyer’s mandate with an estate agent, to incentivise the agent to source suitable properties and negotiate on your behalf. 

What do I do when I find the property that I want to buy?

Once you have found the property that you want to purchase, the selling estate agent (or seller in the case of a private seller) will draft and give you an Offer To Purchase (OTP) – this is a legal document which lays out the terms and conditions of purchase, and is typically set to expire between 2-7 days from you signing it. The seller needs to either accept or reject your written offer within the expiry period, failing which the offer lapses and becomes null and void. Should the seller sign and accept your offer, the agreement becomes legally binding pending the fulfilment of suspensive conditions (if any; such as you securing the required finance/mortgage bond, selling a property, obtaining plans etc.). You should never agree to pay a non-refundable deposit, and the deposit should always be paid to the seller’s nominated transferring attorney (conveyancer).

Once all of the suspensive conditions of the sale have been fulfilled (if applicable), the conveyancer drafts paperwork (transfer documents) which both buyer and seller must sign in person. The buyer will also be required to pay transfer fees to the conveyancer, transfer duty or Value Added Tax (VAT) to the South African Receiver of Revenue via the conveyancer, deeds office fees, a few other small administration costs, and bond registration costs (if applicable). 

What happens if my offer is rejected?

Depending on the situation, you can submit a revised offer with improved terms and conditions and/or amount with a new expiry date.

If my offer is accepted, what are the seller’s responsibilities?

In South Africa, the seller is then required to obtain compliance certificates at his/her/it’s cost from authorised service providers to confirm that installations on the property are compliant with relevant, application legislation – the certificates that are required will vary depending on the city, region or province. In Cape Town, at most, these certificates will encompass compliance checks for electrical installations, water (primarily focused on water leaks and discharge), beetle/wood-destroying insects, gas installations, and electric fence compliance. The wording of what is required for each compliance check within each estate agent’s agreement of sale may vary, so it is important to ensure that the agreement is clear on what is covered, by when, and who is responsible for the cost.  

The seller is also responsible for obtaining a rates clearance certificate to show that there is nothing owed to the municipality in respect of the property’s rates and taxes. The same is applicable to sectional title properties where a levy clearance certificate is required from the body corporate or managing agent, in order for the conveyancer to pass transfer to the purchaser.

What does the transfer process entail?

Once all the compliance certificates, rates clearance, levy clearance (if applicable) and transfer duty receipt have been obtained, and all the transfer and bond documents (if applicable) have been signed, the conveyancer will lodge the transfer at the Deeds Office. Once submitted, the transfer “pack” (deeds) goes through a series of examiner checks, which can take anything from 5 – 15 working days, depending on how busy the Deeds Office is. Once the documents have passed the final check, the deeds come up ‘on preparation’. The conveyancer then has up to 5 working days to register the transfer. This window is there so that the conveyancer can register as close as possible to the target transfer date that was stipulated in the agreement of sale. Depending on how the agreement of sale is worded, vacant occupation of the property may take place on a specific date or “on registration” – ideally at “12:00 noon on registration of transfer”.  The purchase price for the property (including any deposit) should only be paid to the seller once transfer has gone through. 

What if I need to move in before the transfer date?

It is possible to move in prior to transfer taking place, but only if the seller agrees. The occupation date and occupational rental amount must be stipulated in the agreement of sale. The occupational rent is usually due (payable monthly) prior to taking occupation. Astute sellers will only give occupation to a purchaser once the full purchase price is secured, and the transfer and bond documents (if applicable) have been signed by the purchaser.

7 DAYS

Why is there a countdown timer on some of our listings? 

As part of Illuminate’s advantageous, head-start offering to the purchasers within our network, select properties on our books are released exclusively on our website and Instagram page for 7 days before appearing on any other property platforms.