Paperwork and expense to expect after your bond is approved

One of the greatest feelings in the world is when our bond application for our dream home is approved by the bank.

For first-time buyers, this often leads to many more questions on what to expect next and what the process will be from that point onwards.

So, what should be expected? Once the deal is sealed and the bond is approved, you will be contacted by the transferring and bond attorneys for the undersigning of the necessary documents for transfer to take place.

The seller will have to sign an affidavit, power of attorney and transfer duty receipt. In turn, the purchaser will have to sign an affidavit, transfer duty receipt and the bond documentation.

The transferring attorneys will also request the rates clearance from the municipality. Anyone who has been through this process before, knows how long it can take for transfer to take place – up to three months or even longer, should there be any infrastructure problems.

So, does this mean you must wait all those months before moving into your home?

Usually the deed of sale should make provision for occupational rental should the purchaser occupy the property before date of registration. It depends on whether the property is vacant or not.

Should the initial deed of sale not make provision for occupational rental, then an addendum can be added to the deed of sale. This clause will make provision for rent that is payable, paid one month in advance and calculated pro rata should registration take place within a particular month. Different expenses need to be paid, for example transfer duties to the South African Revenue Service for a property valued at more than R900 000; the deeds office needs to be paid (the registrar fees for every transfer), as well as the municipality for the rates clearance, the professional fee of the conveyancer and so forth.

Currently, 100% bonds are rarely given, but that depends on the bank that is being used.

So, in most cases, it’s a good idea to save up for a deposit even before you go looking for that dream property.

At times transfer fees can be added to the bond amount.

However, don’t forget that you can also apply for a personal loan for the transfer fees, so the bond originator isn’t the beginning and end of all. A system called FLISP was developed to enable first-time home ownership to households earning between R3 501 and R22 000 per month.

Individuals in these salary brackets generally find it hard to qualify for housing finance as their income is regarded as low for a home loan, but too high to quality for the government “free-house” subsidy scheme.

Hanno Bekker, founder and lead attorney of Bekker Attorneys