Property Related Advice

1. Giving a mandate

(The word “mandate” means permission and authority and amount to an agreement. The words “exclusive sole” mean that the Seller shall not be permitted to sell the property through the Seller’s own activities or through the activities of any other estate agent during the period of this agreement.)

There are mostly three options available:

EXCLUSIVE SOLE MANDATE: Once the agency is given the exclusive right to market and conclude a sale of the owner’s property within a specific period of time, and is based on an instruction and agreement between the seller and the estate agency. The time period for a sole mandate depends on the area and the type and price of the property and the activity levels in the market at any given time.

Personalised and focused marketing and advertising plan, including show days, advertisements, etc. supported by a generous marketing budget.
Interaction with a single agent who is fully understand your needs.
Greater chance to realise your selling price.
Agent accountable to you for results due to contractual agreement.
A small chance of commission dispute.
Advertising and show days are controlled (less chance for over-exposure of property).

DUAL MANDATE: Two or three agencies are given the right to market and conclude a sale of the owner’s property. The agency that sells receives the associated professional fee.

OPEN MANDATE: Many agencies are given the right to market and conclude a sale of the owner’s property. The agency that sells receives the associated professional fee.

2. Costs involved in transfer process

A broad outline of the costs involved:

Purchaser

Transfer and bond registration costs
A Transfer duty and other transfer costs
B Bond registration costs or bank guarantee cost (if applicable)
C Bank initiation fee
A + B + C = Total costs
In case of a cash transaction the transfer attorney will confirm when money is due.
Deposit (if applicable), plus costs A + B + C
Cash deposit fees: R16,00 + R1,50 for every R100,00
In case of a cash transaction, the bank guarantee fees would be the responsibility of the purchaser
Occupational rent is payable upfront and is not deductible from the purchase price
Common property certificates – extra cost for lost certificates provide by the Body Corporate
Additional certificates (where applicable): Borer Beetle, Borehole / Plumbing, Asbestos Certificate
Insurance: Life-, Building- and Household content insurance

Seller

The Seller will need to acquire a rates and taxes clearance certificate from the local municipality. The fee is charged to make sure that rates and taxes on the property will still be paid while the registration process is underway. Consequently, the municipality usually ask for between two to six months upfront. The municipality will refund you after the registration process is completed. Special levies could also be charged, roughly 3 months’ worth of levies upfront before the registration of sale. Sellers should speak to the HOA of Body Corporate to find out about these costs.
The Seller needs to consider the bond cancellation fee. It is the responsibility of the seller to give their bank written notice of their intent to cancel a bond. The notice period may differ from bank to bank but as a rule your bank will require 90 days’ notice. If you struggle to find a buyer, please notify your bank, otherwise penalties will be occurred. The bank will advise your attorney to attend to the cancellation of the outstanding capital amount and interest, plus any other costs that are required to settle the account. Bond cancellation figures include the outstanding loan balance, one months instalment, monthly service fee, Home Owners insurance fee, bond protection premiums if applicable, early termination charge, legal fees if applicable and interest calculated from date that the figures are issued to when payment received.
Another expenses which need to be covered before the transfer can go ahead is that of various compliance certificates (electric, plumbing, gas, beetle, electric fence - if applicable) required during the home inspection process. Sellers will also have to cover the costs of addressing any issues that are pointed out in order for the certificate to be issued.
If you are renting the property to a tenant, keep in mind that you will need to repay their deposit with interest. You should also make room in your budget to pay for any possible repairs in case there are any damages to the property after they vacate.
Lost Title Deed– go to deeds office, complete form, and pay the required fee.
Approved building plans– any additions and or improvements to the Property, have been made, only after the required consents, permissions and permits to do so were properly obtained from the relevant local authority.
Immovable property condition report or Property Inspection cost.
Agents’ commission payable

3. Prepare your home for selling (Marketing Process)

21 ways to get your home ready for selling

Correct pricing of your home

The most important aspect of selling your home is getting the pricing right. This will ensure that your home spends less time on the market and attracts the right buyer.
The market price of your property is determined by the current market – NOT by what you paid for your home; the amount you need to purchase a new home.
The correct method to price a property is to use a Comparative Market Analysis (CMA). This determines the price of a property in comparison to other comparable properties which have recently been sold or are currently for sale under the same market conditions

Prepare your house for a show day

The first impression for the buyer is the garden and the outside appearance of your home.
Mow the lawn and ensure that garden tools and hose pipes are neatly packed away.
Make sure that your swimming pool is clean and sparkling and that all water features are operating.
Ensure that exterior walls, woodwork and gutters are in good repair.
Make your braai and entertainment areas attractive.
Make sure your front door invites visitors in.

Inside the house

Make it as bright and light as you can. Switch on the lights if necessary and open all the curtains to ensure ample light in all the rooms.
Make sure that bathrooms are clean, towels hung up neatly and all products packed away. Baths, basins, toilets, taps and showers must be shiny.
Kitchen, stove and oven must be sparkling clean and all dishes and washing packed away.
Pick up all clutter which make rooms feel cluttered and untidy.
In summer, open doors and windows as far as possible and allow light and fresh air to circulate. In winter, make your home warm, cosy and inviting.
Make sure that visitors can view all the outbuildings.
Put fresh flowers in a vase on a prominent spot.
Play classical music to create a pleasant atmosphere.
Try housing pets elsewhere for the day.
Do not hang about during show times. Prospective buyers feel inhibited if they know the owners are close by.
Lock away all valuables.

4. Buying a house – Your credit rating is an important asset

If you're thinking about buying your first home, get your financial affairs in order as soon as possible. You can't get credit it until you've had it; therefor store any credit and cell phone accounts, including bank loans so that your bank will look favourably on your home loan application when the time comes. Try to include at least one credit card in your mix. Any unpaid credit card debt or store credit, including an unpaid account or bill, will however, reflect negatively on your credit record. It is a good idea to approach a professional credit provider to help you get a credit report which will reflect your financial health and ‘habits’ and whether you can afford the debt you have/are planning. Based on your creditworthiness, a lender can then decide whether to approve your application for a home loan.

5. Deposit or 100%-bond

Estate agents and sellers are more confident when a prospective buyer has a deposit. The buyer's chances of getting a bond approved are higher, so their offer is more appealing than a buyer whose offer is conditional on the sale of another property or raising a 100%-bond.

In addition, when the banks consider whether or not to grant a home loan, they take into account factors such as earnings, disposable income, credit record, age, length of time the applicant has been in their current job and the size of their deposit. The larger the deposit, the smaller the risk for the bank when granting a home loan, and the more the homebuyer saves over the bond term. Banks are also more likely to be negotiable on the interest rate, because they are taking a lower risk with a deposit. By providing capital upfront, the amount owed on the property is decreased, so a smaller bond is required, which reduces the amount of interest owed,” says Schimper.

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