The Transfer Process Simplified.
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Offer to purchase
The purchaser signs an offer to purchase (OTP). The seller, in return accepts the offer by also signing the OTP. This deed of sale is a binding contract between the purchaser and the seller that forms the basis of the property transaction.
Apply for finance
The purchaser or their bond originator applies to a financial institution for finance. A bond application will, in most cases, form part of the suspensive conditions. Suspensive Conditions refer to events that need to happen or be met before the sale is finalised. An example of another suspensive condition is the sale of the purchaser’s existing property.
Bond approval
Once the purchaser’s bond is approved: The estate agent will send the deed of sale to the transferring attorneys.
Request Title Deed
If there is an existing bond over the property, the transferring attorney will then contact the seller’s bank and request the original title deed and cancellation figures to settle the seller’s bond. The purchaser’s bank will then instruct a bond attorney to register a mortgage bond over the property that the purchaser is buying.
Cancel the seller’s bond
The seller’s bank instructs their attorneys, the bond cancellation attorneys, to cancel the seller’s bond. The cancellation attorneys then send the title deed and guarantee requirements to the bond attorney and the transferring attorney.
At this point, it is important to note that there are generally three types of attorneys involved in the transfer of a property, however, this is not always the case.
The Transferring Attorneys attend to the transfer of the property from the seller’s name into the purchaser’s name and register the draft deed carrying the purchaser’s information at the Deeds Office, upon registration the draft deed becomes a title deed.
The purchaser’s bank that had granted them the loan, will then instruct a Bond Attorney to register a mortgage bond, which is registered in the Deeds Office.
The Bond Cancellation Attorneys that requested the final amount to cancel the seller’s bond, this is registered at the deeds office as the cancellation of an existing bond.
Rates clearance certificate
The transferring attorneys request rates clearance certificate (RCC) from the local municipality.
Note: A property can only be transferred once all municipal charges have been paid in full to the relevant parties. The seller must pay the rates a few months in advance to obtain the RCC, however any credit on the account at the date of registration will be refunded back to the seller.
Sign the transfer documents
The purchaser and seller will be contacted by the transferring attorneys to come in and sign the transfer documents. The buyer will be required to sign a Power of Attorney to transfer, as well as a number of affidavits to verify their marital status, financial status and identity.
Various documents are required from both the purchaser and the seller when they attend the transferring attorneys’ offices to sign the transfer documents. These documents will be needed to meet the Financial Intelligence Centre Act (FICA) requirements.
Payment of the transfer costs
The purchaser is responsible for the payment of the transfer costs and their share of the rates and taxes. A pro forma account will be presented to the buyer with estimated costs. Transfer cannot be effected without the payment of transfer costs.
Electrical compliance certificate
An electrical compliance certificate (COC), electric fence certificate and gas certificate are required from the seller by the transferring and bond attorneys prior to lodgement. The COC is compulsory, however, the latter two certificates are dependent on whether the property has any electric fencing and/or gas installation.
Lodgement
Once all of the above steps are in place, All three Attorneys lodge their documents simultaneously at the Deeds office.
The transferring attorney will contact both the cancelling attorney and bond attorney to ensure that all the documents are lodged on the same day. The documents must be registered at the same time because the seller’s bank has guarantees to ensure it will be paid when the bond is cancelled, and they will not cancel the bond until the new bond is registered.
Deeds Office
A Deeds Office examiner will check all the documentation. This will take between ten to fifteen business days depending on how busy the Deeds Office is.
Once the documents have been examined, the examiner will contact all the attorneys to inform them that they are in order and will be registered the following day.
Paying the Bond Cancellation Attorneys
Once the documents have registered, the Transferring Attorney will receive the funds from the Bond Attorneys, who in turn will cancel the Existing bond by paying the Bond Cancellation Attorneys the requested Cancellation figures.
The Transferring Attorney will also pay over the Estate Agent’s Commission and any other costs incurred by the seller during the transfer process and the seller is paid his proceeds into the allocated bank account.
The buyer becomes the owner of the property and would thus need to do the change of ownership of his municipal bill at his local municipality.
Finish
Receive the original title deed
The transferring attorney will then receive the original title deed from the Deeds office after several weeks and send it to the Purchaser’s bank via the Bond Attorneys. If the purchaser does not have a bond, in other words, the property was bought in cash, the title deed will be sent directly to the Purchaser.