Getting to grips with the bond process

FOR some South Africans buying a house is simply a case of transferring money into an account, but most of us will need to explore property financing to afford the home of our dreams.

On the face of it, this is a complex process that can understandably lead to uncertainty.

Property expert Andrew Winter says, “Buying a house is complex because no one property is identical to another. This is why you hear the term compromise in real estate.”

Registering for a bond is a good example. By breaking down the process into 12 steps, it is clear the buyer need not be overwhelmed.

Once the buyer and seller have signed the Offer to Purchase, the buyer applies for a bond;

Once this is approved by the bank, the financial institution advises a bond attorney to register the bond;

The seller advises his or her attorney to transfer the house. Then the title deed and cancellation figures are requested from the bank;

The bond attorney contacts the transferring attorney to advise on the amounts available for guarantees. They also request the deed of transfer;

A cancellation attorney is asked to cancel the seller’s bond after the amount owing is received;

The transferring attorney sends a copy of the deed of transfer to the bond attorney. Simultaneously, the transferring attorney asks the buyer and seller to sign the transfer documents (the buyer pays the transfer costs);

The buyer signs the bond documents and pays the costs. The bond attorney forwards the guarantees to the transferring attorney and prepares the bond documents for the Deeds Office;

The transferring attorney forwards the guarantees to the cancellation attorney;

The cancellation attorney obtains consent for cancellation from the seller’s bank;

The respective attorneys prepare the transfer, new bond and cancellation for the Deeds Office;

Documents are lodged in the Deeds office. The Deeds Office then peruses the documents over the next two to three weeks;

On the day of registration the bank pays out the loan.

The only threat to this process is in the buyer and seller not providing the necessary documentation to the relevant attorneys.