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Guidelines - How to purchase a property in Hermanus
These are only guidelines and no hard and fast rules - There are lots of information available on the Net - Use Ananzi search engine for more information or if in doubt CONSULT A SUITABLY QUALIFIED AND EXPERIENCED CONVEYANCER.
Find your dream house in the list of properties for sale in the area of your choice.
Make use of the maps to find the exact location of the property.
The street finder is also a valuable tool to find the property.
You can also use the telephone,fax,cell phone, email and URL directory to find the property owner.
You will gain valuable information from the maps. Click on the property number for information like,size,municipal value, street number, owner etc.
Contact the seller from the information that is available on the web site to inspect the property.
Look critically at the property you inspect. Look at the property as if it is empty -with no furniture or plants. - If you see anything which does not appear right to you structurally, do not hesitate to arrange for a qualified expert to inspect the property for you. Spend some money on having the property properly inspected rather than buy something which will cost a lot of money to repair or replace later. If you see a carport or an extension to the house which was obviously not part of the original construction, don't just accept that all these alterations have been approved by the Local Authority. You need a letter from the owner in which he gives you permission to go to the Local Authority to inspect the building plans and to obtain a copy thereof.
QUESTIONS YOU NEED TO ASK?
Who and how are the neighbours?
Are there any cracks or burn marks covered by furniture or carpets?
Wind direction for the Northwesterly wind in winter and the Southeaster in summer. Any windows and doors exposed to the Northwester will experience damp conditions. You will not be able to utilize outdoor areas or braais exposed to the Northwester.
When does the sun come up behind the mountains in the winter months and when is it in the shade of the mountain. This will determine the need for extra heating in winter.
Is the roof sound?
Ask for a beetle free certificate.
If you are not 100% happy make your offer subject to a roof inspection
Any bore holes or well points on the property? This may affect your water bill in future.
Are there any drainage systems on the property to take away excessive water during the winter?
Are there any irrigation systems on the property and are they working?
Security systems installed in the house? Some areas experience more crime than others.
Is the plumbing in good working order?
Flush toilets -
Run taps to check water pressure and dripping, ensure there is hot/cold water where you expect it to be. - How often are the septic tank pumped or is it connected to the municipal system? Any spillage of septic water? Any noices when a tap is opened - airlock in the watersystem? Water supply - see that the pressure is strong enough to fill the bath and kitchen
sink at the same time.
Solar heating? Is it working?
Is the electricity in good working order?
Make sure you have an electrical compliance certificate before you pay your final monies - make sure you protect yourself with a legal clause suitable to be inserted into the contract. (This clause should be standard in all deeds of sale)
Windows and doors- see that the windows and doors close and open easily.
Garden- If they are sizable trees in the garden, check if they seem to interfere with the adjoining properties. Tree roots or branches often intrude into neighboring property,
and have to be sewn off and dug out at the owner’s expense.
Stove - must be in good working order - make sure all/any other electrical items included in the sale are written in and ensure these are also in good working order i.e. air onditioners, fans/ extractor fans - If not the seller should inform you prior to signing the contract.
Geyser - leaks or bursts are sellers responsibility until date of transfer.
Noise -Try to establish whether noise carries from one room to another from the
house next door. Flush the toilet and walk into the adjoining room to see how the
far the noise carries. Fittings: check if light fittings, blinds, curtains, curtain rails,
floor coverings, washing machines, or other appliances come with the price.
Check that all doors with locks are provided with keys.
Cracks - If any, should be checked by a qualified expert.
Garage doors and gates - remote control or manual?
Damp - this is a serious problem in Hermanus. One of the most expensive problems to remedy is dampness.
Look for dark patches or old growth on walls, and for hollow sounding or bubbly
plaster - all of which indicate the possibility of damp. A useful test for less obvious
damps is to run a hand along the wall. If it becomes covered in a thin white powder
from the plaster, damp may be the cause. If you are the least bit suspicious call in an expert.
If the ground is soggy and water logged check soil type and ensure correct suitable foundations have been laid.
IN FACT IF AT ALL IN DOUBT IT PAYS YOU TO SPEND A SMALL SUM OF MONEY TO OBTAIN A REPORT AND SET YOUR MIND AT REST ON ALL THE ABOVE SO YOU WILL HAVE PEACE OF MIND.
Make sure you know exactly what fixtures and fittings like TV dishes and antennas are included in the sale and write them in very specifically. Don't be afraid to ask questions, rather be sure than sorry afterwards.
Be sure to ask the exact condition of the pool, the pool pump - motor and filter and write any defects into the deed of sale. If the automatic pool cleaner is a fixture make sure you write it into the deed of sale.
Possession/ Occupation: A purchaser can occupy anytime agreeable to both parties but possession must always co-inside with transfer. As the seller needs to be covered by insurance right up to transfer. If the seller is not covered and the property burns down or insurable fixtures go wrong, the purchaser has no insurance claim whatsoever and the risk becomes the sellers responsibility to deliver the property in tact and as viewed by the purchaser prior to finally purchasing.
Title Deeds: Ask an attorney to examine the title deed for servitude’s or restrictions
registered against the property. Your local council will have plans of the house.
Obtain a copy to make sure that no illegal additions have been made to the property.
Find a knowlegeable appraiser to determine a fair value for the property. Don't rely on your financial institutions' valuer to look at the property. Their function is purely to determine whether the property is good security for the money which they will lend you to purchase it. Remember that not only must you put down a deposit on your new property, but you will have to pay to have the property registered in you name, and also pay for the registration of the bond over the property. In addition one should always bear in mind that there are a number of other small expenses which have to be met; for instance, deposits on water and lights, deposits on the telephone, removal expenses and expenses for new curtains or a bit of painting and security aspects etc
Use the Mortgage Calculator to calculate your monthly installment.
If the property is what you are looking for, select an attorney from the list to help you draw up an offer to purchase.
For the financing of your home you can shop around all the financial institutions for the best deal. Some will even visit you at home to help you. Compare all financial institutions to find the one with the best interest rate for you.
Apply online for a bond on the property - where the banks bid for your businessWhen you buy a home with an agent's assistance you will pay extra:
PLUS 5% - 10 % commission on top of the asking price of the seller.
PLUS VAT on the above commission
PLUS Your transfer duties will increase because the commission and VAT added to the seller price will increase the total price of the property.
PLUS. You are not in control of all the other small costs that are negotiable and can quickly add up to hundreds of Rands.
With the savings you make you can buy a small car or redo the kitchen. REMEMBER THAT ALL COSTS INVOLVED IN BUYING YOUR NEW HOME ARE NEGOTIABLE.(Transfer cost levied by the state and other local authorities being the exception here)
The Agreement of sale or Offer to purchase
A person buying or selling a property must sign a deed of sale and any freehold property must be registered into the buyers name in the Deeds Office (for Hermanus it is the Deeds Office in Cape Town). This office keeps the official records of who owns which properties. The title deeds must be made out in your name to prove that you are the owner. In terms of South African Law an agreement of sale of land must be in writing and must be signed by the parties or
their agents. Until both their signatures appear on the written contract they will not be bound, irrespective of what has been agreed between the buyer and the seller verbally.
Normally the purchaser makes the seller an offer for the property. In practice what often
happens is that the estate agent presents you with a pre printed agreement of sale with blank
spaces left for details to be filled in.The seller will be given a stipulated period of time within which to decide whether to accept your offer. If the seller refuses to accept the offer and the buyer still wishes to buy the house, a new offer will have to be made, which means drawing up a new agreement of sale with new conditions or terms. Once again the seller is given a certain time to consider such new offer. Remember that you are bound by whatever conditions you agreed to in the agreement of sale.Once it is accepted by the seller it is binding on both parties.
Once a contract has been made in writing, in the event of a dispute, a court will usually look
only at the written document in deciding what the parties intended. It is unlikely to enforce
terms only verbally. Thus it is wise to ensure that every term or condition of the property of
the sale to which the purchaser and the seller have agreed is set down in the written contract. Remember that although printed agreements are usually used, the buyer can draw
up his own with the assistance of an attorney and present it to the seller.IF YOU ARE NOT FAMILIAR WITH THE FINER POINTS AND LEGALITIES OF THE WRITTEN CONTRACTUAL SIDE OF PURCHASING PROPERTY, CONSULT A SUITABLY QUALIFIED AND EXPERIENCED CONVEYANCER (AN ATTORNEY SPECIALIZING IN PROPERTY TRANSACTIONS), BEFORE SIGNING OR ACCEPTING AN OFFER TO PURCHASEWhen signing a deed
of sale you should ensure that the following items are specified: The name of the seller and the purchaser:
The seller should be described in exactly the
same way as in his title deed. If you are the purchaser you must decide at the time of
signing the deed of sale whether you wish to purchase the property in your own name
or in the name of another entity, for example, in the name of a company or close
corporation. It is essential to make this decision at the time of signing the agreement.
A description of the property sold:
Although meticulous accuracy is not required, the
deed of sale must leave no doubt about what property is been sold.
Purchase price:
The deed of sale must mention the amount of the purchase price and
how and when it should be paid. As a seller you should insist upon a payment of a deposit.
On the other hand as a buyer you should try to avoid paying a deposit. The balance of the
purchase price (or the whole of it if you have persuaded the seller to waive payment of a
deposit) must be paid to the seller on registration of the property into the purchaser’s name.
If a deposit has been paid you must agree whether interest on such deposit is to be paid to
the seller or the purchaser.
Risk and date of possession:
The agreement must stipulate the date on which the seller is
to vacate the property. The deed of sale will usually stipulate that the risk and the benefit
passes to the purchaser on date of his taking possession. This is important for insurance purposes.
Occupational interest:
The deed of sale should fix an amount to be paid by the purchaser
to the seller reckoned from the date of occupation to date of transfer. This will apply only
if the purchaser takes occupation before he has paid the balance of the purchase price and received registration of transfer into his name. Usually occupational interest is calculated monthly at 1 % of the purchase price.
If the property is let to tenants establish whether they occupy by virtue of a written lease and when such lease expires or whether they are monthly tenants in which case you will need to terminate their tenancy before you can take occupation personally.
Payment of rates and taxes:
The purchaser will normally be liable to pay rates and taxes
from date of transfer of the property into his name.
“Bond” clause:
If you are to obtain a loan from a financial institution to enable you to pay
the purchase price, then the agreement of sale is to be made conditional on the purchaser
obtaining such loan as referred to above.
Movable Assets:
If in submitting your offer you wish that certain movable assets be left
on the property by the seller then you should stipulate precisely what these are.
Costs of transfer:
The cost of transferring the property are always paid by the purchaser
and the deed of sale will impose the obligation upon him to pay such costs. Such costs will obviously include the transfer duty that is payable on the transaction.
Agents commission:
The estate agent who sells the property is entitled to his commission
and the deed of sale should state the amount of such commission payable and who is
liable to pay such commission. Agreements that call for commission to be paid according
to some tariff should be avoided if possible. It is preferable to have the agent calculate the
exact amount and stipulated in the agreement of sale.
Voetstoots:
The property is normally sold voetstoots , that is, as it stands , without guarantees
been given by the seller. It is to be noted however that this clause will not protect the seller who is aware of defects in his property and he has failed to disclose these defects to the purchaser. If the seller has agreed to attend to any repairs to the property this must be recorded in the agreement.
Breach:
The agreement should contain precise terms as to what should happen in the event
of a breach of the terms of the deed of sale by the purchaser.
Cooling-off clause:
If the purchase price for the property you wish to acquire is R250 000.00 or less, your agreement will include a cooling-off clause, allowing you the option to cancel the sale within 5 days of making the offer. It takes effect the day after an offer-to-purchase contract has been signed. The five days do not include Saturday, Sunday and public holidays. Written notice to this effect must be given by you to the seller.
Electrical Compliance Certificate :
In terms of and as required by the Machinery and Occupational Safety Act, the purchaser must be in possession of an electrical compliance certificate when he takes occupation of the property. Ensure that your agreement provides for the seller to furnish you with such certificate.
Beetle Inspection: As a rule, the purchaser is protected against "Certifiable Beetle" by a beetle free certificate provided and paid for by the Seller.
Additional costs payable by the Purchaser:
Ensure that, as a Purchaser, you have calculated all costs associated with the purchase of a property and that you have made adequate provision in respect thereof. Such costs will include; transfer duty, bond costs, conveyancer's transfer and bond registration fees (including sundries and Deeds Office Registration fee), VAT on such fees, as well as provision for rates and taxes for which you will be liable for (from date of transfer) in order to obtain a rates clearance certificate from the local municipality.
Miscellaneous provisions:
Both parties can incorporate practically any other term or
condition in the agreement provided they both agree and that it is lawful. Precisely
what clauses will go in will depend on their particular circumstances at the time of
the sale.
TRANSFER CYCLE
It's a very good idea to educate yourself about every aspect of buying a home before you even make an offer. Read about the transfer cycle so you know exactly what's going on throughout the process.
Finalize the agreement of sale with the seller. The seller nominates the transfer attorney.
The buyer usually need to put down a cash deposit of at least 10% of the purchase price. Make sure your money is paid into the transferring attorney’s trust account. Also ask to get the interest on the deposit money while it remains in the trust account.
Apply for the loan from your selected bank.
The size of your home loan will depend on how much you can afford to pay each month. Normally the repayments on your home loan should be no more than a quarter of your total monthly income… including that of your husband/wife.
With installments of one quarter of your salary each month, you could afford roughly 15 times your joint monthly salary. If you increase your installments to 30% of your monthly salary, the loan you could afford would increase to 18 times your salary.
The bank's valuation department inspects the property.
Either the estate agent who has sold the property or the seller will submit a copy
of the agreement of sale with instructions to the conveyencer to do the transfer. Often more than one conveyancer would work together to arrange a transfer, typically acting for one or more financial institutions. These coordinate their efforts and lodge their documentation for examination at the Cape Town Registrar of Deeds. The buyer will be contacted by the Attorney to verify his personal details as well as the sellers
details. The buyer will be requested to provide copies of his identity document, marriage
certificate and ante nuptial contract if applicable. If the property is un bonded, the seller
will be requested to provide the original deed of transfer.
The Attorney will then attend to the following :
If the property is bonded, he will write to the bond holder for the title deed and
cancellation figures. Furnish the Attorney with the loan account
number to avoid lengthy delays.
Application will then be made to the local municipality for the rates clearance
figures. Rates will need to be paid up-to-date and in many cases even beyond
the date of transfer. Request will also be made for the property valuation to be
included on such statement.
On receipt of the title deed the following transfer documents will be prepared
Power of Attorney to Pass transfer (by Seller).
Declaration by Seller (for transfer duty purposes).
Declaration by Purchaser (for transfer duty purposes).
Affidavits of solvency by Seller and Purchaser.
Status affidavits by Seller and Purchaser.
Statement of Account for transfer costs by Purchaser.
If the Seller or Purchaser or both of them, are persons other than
natural persons, E.g. a company, trust or close corporation, it will be necessary
to draw up a Resolution which will authorize the transaction and also nominate
the person signing on behalf of the company, trust or close corporation.
(Copies of the Memorandum and Articles trust Deed or Founding Statements
should be obtained and checked to verify the powers of the institution).
The seller will then be called to sign the necessary transfer documents together with
the purchaser and the purchaser will be requested to make payment of the transfer
costs.
The seller will also be requested to provide an electrical compliance certificate
as required by the Machinery and Occupational Safety Act.
A copy of the draft deed of transfer will then be forwarded to the attorneys attending
to the registration of the bond, if the purchaser has been granted a loan. The attorneys
will also request to be provided with the necessary guarantees securing the purchase
price payable to the seller.
Payment will then need to be made for the transfer duty and the rates clearance
certificate.
On receipt of the necessary guarantees, normally one in favour of the existing
bondholder and one in favour of your attorney, the attorney should then be in a
position to lodge the necessary documents at the deeds office for registration.
Arrangements will then be made with all the attorneys that is, the attorneys attending
to the registration of the cancellation of the existing bond and the registration of the
new bond by the purchaser for lodgment in the offices of the Registrar of Deeds.
On registration, payment will then be made to the seller.
TRANSFER DUTY (State money - not negotiable)
Transfer duty is payable at the following rates on transactions which
are not subject to VAT.
Acquisitions of property by natural persons
1 % of the value not exceeding R 70 000
5 % of the value between R 70 000 and R 250 000
8 % of the value exceeding R250 000
Acquisitions of property by persons other than natural persons
10 % of the value
Exemption limits for natural persons are as follows:
The purchase of a dwelling with value not exceeding R 70 000
Unimproved property acquired for the purpose of erecting a dwelling
thereon with value not exceeding R 30 000.
