MAJOR ROLE PLAYERS IN THE PROPERTY
PURCHASE PROCESS
When engaging in a property purchase, it is important to know who you are going to be dealing with, and what each person's unique responsibility is in the process.
Here is a detailed list of the key role players involved in the process of purchasing a property and explanations regarding the primary objectives of each.
The Buyer
The individual who places an offer on the property to purchase either through an estate agent or directly to the seller.
Main objectives are to ensure that they have been pre-approved for the finance prior to placing an offer to purchase, and to apply for the required finance within the agreed time frame as specified in the contract of sale.
The buyer is responsible for payment of attorney transfer and registration costs associated with purchasing a new property.
The buyer may appoint a bond originator to assist with both a pre-approval as well as securing official home loan quotations from the various banks.
The Seller
The registered owner of the property for sale. They are expected to either decline or accept the buyer's offer to purchase.
In some cases the seller can be represented by the estate agent, or alternatively the seller markets the property privately whereby prospective buyers could approach the seller directly.
The seller's main requirements of sale will usually include the payment and supply of an electrical compliance certificate, beetle certificate or entomologist certificate [if applicable], borehole certification [if applicable].
Depending on the structure of the actual property, there may be additional conditions required. These will all fall under the responsibilities of the seller.
The Estate Agent
An estate agent will be the first point of contact for many prospective buyers in the case where the seller has appointed a registered estate agent or property listings company to market the property on their behalf.
Many of these agencies list properties online which make it easier for home buyers to pinpoint and narrow down the list of possible options.
The estate agent would charge the seller a commission fee for securing an interested buyer and this is usually paid from the proceeds of the property price once the sale has been concluded. Estate agents may also provide a list of comparable sales in the area and a recent market valuation report to keen property buyers.
The Bond Originator
This is an accredited company of consultants who assist both first and second time buyers with the financing process of purchasing their homes. Most originators can be found online and can assist with the official home loan application process, as well as the pre-approval process.
Applications can be made to more than one financial institution to secure comparative and preferential bond options.
Services are free of charge to the home loan applicant.
The Banks
These are accredited financial institutions such as ABSA, FNB, Standard Bank and Nedbank where the official finance applications for property purchases are processed.
Banks would underwrite the risk involved when financing the immovable asset and ensure that the client is able to comfortably afford the monthly installments associated with the loan requested.
Monthly income and expenditure of the applicants are assessed to ensure that affordability is evident, and the actual property itself is physically assessed to confirm that the purchase price is in line with the current market value.
Once the checks have all been passed, the banks issue a formal approval letter and the client has 5 business days within which to accept the offer.
Once acceptance is confirmed, the bank then issues a formal instruction to their accredited bond registration attorney located on their internal pre-approved list of attorneys.
The Bond Attorney
The bond attorney, receives an instruction from the bank to register the home loan facility in the name of the Property Buyer.
Bond documents are drawn up and will include:
The total loan amount approved;
The total amount of interest charges;
The monthly home loan repayment,
The method of payment [debit order or salary stop order ],
The property insurance details
and the loan repayment term i.e., 20 years or 30 years.
It is the bond attorney's main function to see that all conditions set by the banks is met prior to the official bond registration date, including FICA requirements.
The bond attorney will work hand in hand with the Transfer attorney to ensure all paperwork is finalised simultaneously prior to bond registration.
The bond attorneys will invoice the buyer for their costs of administrating and registering the bond. Click here to view a detailed table of home loan bond attorney costs
The Transfer attorney
Receives an instruction from the seller or estate agent to transfer ownership of the sold property from the current owner to the new buyer.
Main duties include:
Obtaining Rates Clearance certificates from the local municipality,
SARS Transfer duty clearance certificates
and obtaining settlement figures for the existing owner's home loan, if applicable
Both the seller and the buyer will meet with the transfer attorney to complete and sign transfer papers. The transfer attorney will invoice the buyer for their associated costs for administering the transfer and drafting legal documents.
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