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The first-time home buyers’ guide to the bond registration process

From the parties and time periods to the process involved, ooba’s three-step guide provides all the need-to-know when it comes to registering your bond.

Bond Registration Process

Article summary

  • Together with signing the deed of sale and paying the deposit, registering a bond is one of key stages involved in the process of buying a home.
  • In addition to the buyer, seller and estate agent, a number of attorneys may be involved in the bond registration process.
  • Depending on the type of sale, the period of transfer can vary from anything between six and 12 weeks.

It takes at least three months for the registration and transfer of a bond. But knowing what to do and where to get help will make the process considerably quicker and
easier.

Here, our easy-to-understand guide takes you through the whole process of registering your bond and buying your home.

The parties

There are a number of people who will be involved in the bond registration process. They are:

  • The seller
  • The estate agent
  • The purchaser (you)
  • The transferring attorney (appointed by the seller to transfer the property into the your name)
  • The bond attorney (appointed by the bank granting the bond, to register the bond)
  • The cancellation attorney (appointed by the bank with which the seller holds his or her bond, to cancel this existing bond)

Note that the same attorney could be appointed to handle more than one or even all of the above transactions.

The time frames

While the transfer process follows a series of successive stages, the time period involved varies considerably. Generally the following guidelines apply:

  • A cash transaction: approximately six weeks.
  • A sale that is contingent on the purchaser applying for and being granted a bond: approximately eight weeks.
  • A sale that is conditional upon the sale of the purchaser’s property (within 30 days): approximately 12 weeks.

The process

Stage 1: The purchase / sale of the property

Property is traditionally sold by way of a written deed of sale, signed by both the purchaser and the seller, as well as their spouses if they are married in community of property. Witnesses need to sign the deed of sale, too. A verbal contract for the sale or financing of fixed property is invalid, according to South African law.

The deed of sale must be carefully examined to ensure that it accurately reflects the parties’ full agreement, especially with regards to the amount payable, the method of payment, all verbal promises made by the seller or his or her estate agent, the incorporation of all special conditions to suit the parties’ particular needs, the time of the buyer’s physical occupation of the property (which may coincide with registration), and the transfer of the property.

If physical occupation and transfer do not coincide, the deed of sale must specifically provide for occupational rent payable between the dates of occupation and transfer. If the sale is subject to the buyer obtaining a bond, this must also be specified in the deed of sale, as must the period within which bond approval must be obtained to avoid the deal being delayed indefinitely.

Stage one is finalised when the agreement / deed of sale is signed by both purchaser and seller. It should be noted that estate agents are not always party to the sale and therefore not obliged to attend the registration process.

Estate agents have their own deeds of sale, but an attorney can also draft one specifically suited to the needs of the parties concerned.

Stage 2: The payment of the deposit

The purchaser makes an initial payment (deposit) and receives a copy of the deed of sale for his or her records, as does the seller. Simultaneously, the transferring attorney is furnished with the original deed or agreement of sale, making it possible to draw up the necessary documents. Finally, a copy is kept on file by the estate agency concerned.

Stage 3: The registering and approval of the bond

The purchaser applies for a bond with a bank – a bond originator will take care of this, cost free, on behalf of the purchaser. Once a bond has been granted by the bank, it advises the bond attorney to register the bond.

If the bank requests it, fumigators may be instructed to inspect the property for infestation by beetle (this certificate is usually only compulsory in coastal regions). Also, if the seller is not in possession of an electrical clearance certificate, this will need to be obtained.

Factors that could delay the registration of a bond

  • Failure by the seller and/or buyer to provide personal information.
  • Failure by the seller to provide details of the bank holding the existing bond.
  • The existing bondholder delaying/not providing cancellation figures and title deeds to the transferring attorney.
  • A delay in receiving rates figures (local authority) and/or clearance certificate (transferring attorney).
  • Failure by the buyer to pay a deposit (if required).
  • A delay in the provision of guarantees.
  • Failure by the buyer to pay the bond and transfer costs on time.
  • A delay by the seller in signing the transfer documents.
  • A delay by the buyer in obtaining government capital subsidy approval/employee subsidy documents for new bondholders and failure to comply with other requirements of the bank.
  • A delay by the buyer in signing the transfer and/or bond documents.
  • When the bond attorney, transferring attorney and cancellation attorney are three separate firms.

South Africa’s leading bond originator offers a range of home loan calculators to help people looking to buy a home determine what they can afford. Click here to access ooba’s free, online prequalification tool, the ooba Bond Indicator. Then, when you’re ready, you can get prequalified or apply for a home loan with ooba.

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Calculate the home loan you are likely to qualify for and how much you can expect to pay monthly on your bond repayments.

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