What attorneys do for homebuyers
Legal fees will be an important part of your home-buying budget. It is a good idea not to think of them as a grudge expense, but rather see them as essential to becoming a homeowner. With the appropriate attorneys involved, your property purchase will run smoothly and once the property registers in your name, you will have the satisfaction - and peace of mind! - of knowing everything was done properly.
The conveyancing process
Once the bank has granted your home loan and you have accepted, the bond and property can be registered in your name. This process is called conveyancing and usually involves three types of attorneys, although this will vary depending on the individual circumstances of the people or ('parties') who form part of your transaction:
- Bond attorneys
- Cancellation attorneys
- Transfer attorneys
There are a few exceptions, but usually the bank that grants your home loan will instruct attorneys from their preferred panel to handle registration of your bond and property into your name. The attorneys on the banks' panels are carefully vetted and their levels of service closely monitored, so you can expect to be in good hands.
Broadly speaking, this is what you can expect from the conveyancing process:
- The bank instructs the bond attorneys.
- The transfer attorneys obtain a copy of the signed Offer to Purchase (OTP), the necessary compliance certificates (usually electrical, gas and beetle), the Title Deed and the cancellation figures (if the seller has a bond over the property).
- The bond attorneys will advise the transfer attorneys of the amount available for guarantees.
- The transfer attorneys will advise the cancellation attorneys to cancel the seller's bond, if applicable.
- The bond attorneys will provide guarantees to the transfer attorneys.
- The transfer attorneys will pay the rates and levies on the transfer duty, if applicable.
- The seller will sign the transfer documents and pay the costs. You will sign your bond and transfer documents.
- The transfer attorneys will send a draft Title Deed to the bond attorneys.
- The bond documents will be prepared and lodged with the Deeds Office.
- The Deeds Office will examine the documents to make sure everything is in order.
- The Deeds Office will register the property in your name and the seller's bond will be cancelled.
Original documents required
Different documents will be required as part of the conveyancing process, depending on whether the home loan and property will be registered in your name, jointly with someone else, or in the name of what is known as a 'juristic entity' (a company, close corporation, trust or partnership).
Documents that form part of the conveyancing process are required by the South African Financial Intelligence Control Act (FICA) and you need to provide original documents to the attorneys. They will make copies and certify each document.
Over and above the FICA requirements, other documents and information will also need to be supplied, depending on your personal circumstances and those of the seller. This includes the original Offer to Purchase and the future address of the seller.
Money changing hands
You might wonder when money changes hands as part of the home-buying process. The bulk of it happens once registration has taken place.
- The bond attorneys will inform the bank and you, as the buyer, that registration has taken place.
- The proceeds of your bond will be paid out by the bank and the transfer attorneys will finalise the finances.
- If an estate agent was involved in your deal, they will receive their commission and the seller will be paid.
- You will start paying off your home loan with the bank.
Congratulations! You are a homeowner. Get ready to enjoy many happy years in your new home. It's time to bond