Useful information to have at hand before buying or selling a property.
The sales agreement
By law, this agreement must be in writing, signed by both the seller and the buyer. Usually, the buyer signs an offer to purchase provided by an estate agent. If the seller accepts the offer and countersigns, it becomes a binding agreement of sale.
The purpose of the sales agreement is to capture the relevant information of both parties, the property description, the purchase price, as well as all conditions relating to the sale.
Any changes to the agreement must be in writing, signed by both parties.
The property
Usually, properties are sold voetstoots. That means at the buyer’s risk without guarantee or warranty. But it’s advisable for the seller to disclose any hidden defects to avoid disputes down the road.
Occupation date
When there are no delays, the process from signing the sales agreement to transfer should take around three months. The buyer and the seller agree on the occupation date. The buyer can take occupation on a specific date or on registration of transfer.
If the agreed date is before transfer, then the buyer will pay the seller occupational rent – an amount stipulated in the sales agreement. Should transfer take place before the agreed date, then the seller will pay occupational rent to the buyer.
Fixtures
Anything that’s fitted, from the satellite dish to a built-in braai, forms part of the property. When in doubt, specify items that aren’t included, for example, a water feature in the garden.
Clearance figures
The seller will need a rates clearance certificate from the municipality. This usually involves paying 4-5 months’ rates in advance to cater for the time from date of signature of the sales agreement until the property has been transferred into the buyer’s name.
For a sectional title property, the body corporate will have to provide a levy clearance figure.
Bank guarantee
The buyer’s bank provides a guarantee for the purchase price (or the balance if the buyer paid a deposit).
Compliance certificates
The seller must obtain compliance certificates from certified service providers that everything is in working order and compliant with industry standards, for some or all of these:
- Electrical (house)
- Electric fence
- Water/plumbing
- Gas
- Beetle
In our next blog, we’ll outline the conveyancing process, that’s the transfer of the property from the seller to the buyer.