Property for Sale in South Africa

What does this mean?

What do you need to think about when purchasing property, apartments, guest houses and holiday homes in South Africa?

• Establish your reason for purchasing a property, investment etc.
• Decide what type of property you would like to purchase, new development, flat, holiday apartment etc.
• Decide what area you want to purchase the property in, in regards to the reason for the purchasing of the property.
• Establish what your budget is, and would you require property finance.
• Ensure that the area you have decided on has been well researched and meets all your requirements, close to beach, near a school etc.
• Once you have found a property you are considering purchasing, you need to ensure that you have done a thorough investigation of similar properties that are for sale and have been sold in the area, to make sure that you purchase the correct property for the correct price.

What is the process once you have decided to purchase a property in South Africa?

• An offer to purchase needs to be completed and submitted to the seller. 
• Once the offer is accepted and signed by the seller, you have formed a legal binding contract. 
• The terms and conditions are stipulated on the offer to purchase.
• The seller elects an attorney to proceed with the transfer of the property from the sellers name into the purchaser’s name.
• A deposit needs to be paid into the transferring attorneys trust account.
• Affidavits need to be drawn up and signed by the purchaser and certified.
• The purchaser has to supply FICA documents to the transferring attorneys.
• If the purchaser requires finance for the purchasing of the property all the relevant documents need to be sent to the bond originator, and approval of finance needs to be approved in the time stipulated on the offer to purchase.
• Transfer costs need to be paid, in cash to the transferring attorney, once the request has been sent to the purchaser.  The transfer costs are around 6-8% of the purchase price and include the transferring attorney’s fees.
• Guarantees need to be issued for the balance of the purchase price, from a bank or financial institution.  
• Once all the documents and guarantees are in place the transferring attorney can submit the documents and transfer should take 10 working days once the documents have been submitted.
• The whole process from signing the offer to purchase to transferring the property into the new owners name can take between 6 weeks and 4 months.

Pitfalls to look out for when Purchasing Property in South Africa

• Have you checked the offer to purchase carefully?
• Have you paid the correct purchase price?
• Is there an open plot next to the property and do you know what they are planning to do on the open land?
• Should you purchase the property in your own name or in a separate entity?
• What are the total costs involved in purchasing property?
• The seller appoints his attorney and you pay for the services, do you have someone looking after your legal interests at no extra cost to you?
• What are FICA documents?
• What documents are required for applying for financial assistance?
• Have you allowed yourself enough time to insure that the transfer costs, deposit and guarantees are paid and issued within the conditions of the offer to purchase?
• How do you keep track of the process?