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Buying and selling property: 5 frequently asked questions answered

05 Nov 2018

Being informed is vital for successfully buying or selling a property, so whether you are a buyer or a seller, never be afraid to ask you estate agent questions to ease your mind, get more information or better understand the process.

Where to invest depends on a vast number of factors, including the type of property, the desired return on investment, surrounding amenities, safety and security, and individual preference.

"If Leapfrog’s property advisors had R5 for every time they got asked the following five questions, they reckon they’d be very rich. However, jokes aside, we find the questions that our clients most frequently ask very interesting as they are very pertinent to the market and offer a valuable opportunity to inform and educate clients about these aspects of the industry,” says Johan van Schalkwyk, Principal at Leapfrog Roodepoort.

“We canvassed Leapfrog agents around the country to share the questions they are mostly frequently asked in the ordinary course of business.”

These five questions were at the top of the list:

1. What is my property valued at?

Warren Buffett said it best: “Price is what you pay. Value is what you get.”

Van Schalkwyk says property advisors can give you a market-related estimate for your property, based on industry trends and research, their understanding of the demand in the area, as well as the features of your property.

See what other similar homes in the area have sold for
- g
et a property valuation report

Value is more subjective, and is essentially determined by what a buyer is prepared to pay for a property - the well-known ‘willing seller and able buy’ economic model.

With information about property easily accessible via various online platforms and tools, this has given buyers the power to be more savvy about the value of a potential investment as they can do comparative research. This means buyers are more informed and sellers need to be more flexible with their prices.

2. Which is the best area to invest in?

This question is similar to asking how long a piece of string is, as it depends on a vast number of factors, including the type of property, the desired return on investment, surrounding amenities, safety and security, and individual preference.

Generally speaking, property all over South Africa is a good investment. But, like all investments, property investments need to be actively managed to ensure growth that meets your expectations.

Depending on individual needs and preferences, a trusted property advisor will help you look at factors like location, future developments and more if you’re looking to make a long-term investment. Property tends to be a very personal investment, with needs and wants differing from person to person, and family to family.

3. Is an offer to purchase legally binding?

Yes, a signed offer to purchase is a legal document that is binding.

The document outlines the purchase agreement, which includes the terms and conditions relating to the property in question. By signing the offer to purchase, the buyer agrees to the terms stipulated in the documents, including the price they are willing to pay for the property.

If the seller is happy with the price offered by the buyer, the document becomes a legally binding sale agreement.

The bottom line is that you need to be very sure about a potential purchase before signing on the dotted line.

4. How long is an electrical compliance certificate valid for?

An Electrical Certificate of Compliance (ECOC) is valid for a period of two years. It is compulsory to be in possession of this document when selling a property, as per the requirements of the Occupational Health and Safety Act under the Electrical Installation Regulations provision.

The ECOC guarantees the condition of the distribution boards, wiring, earthing and bonding of all metal components.

5. What happens after the home loan is granted?

After a home loan is granted, a bond attorney is instructed by the bank to register the bond at the Deeds Office, while the seller advises the transferring attorney to transfer the property.

Next the bond attorney notifies the transferring attorney of the draft deed of transfer and guarantee requirements. Then the cancellation attorney cancels the seller’s bond and the transferring attorney receives the title deeds and cancellation figures, and sends a copy to the bond attorney.

After this, both the buyer and the seller sign the transfer documents. The buyer is responsible for the transfer costs and the transferring attorney pays for the rates and taxes, and the transfer duty.

Calculate you bond and transfer costs

After all the documents are signed and costs paid, the transfer, new bond and cancellation bond documents are prepared for lodging at the Deeds Office. Here it takes about three weeks to be checked and readied for registration by the attorneys. On the day of registration the bank pays the loan as per the guarantees issued. This whole process typically takes around 10 weeks.

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