How Does the Sale of a House Take Place in South Africa?
In fairytales and sitcoms, people buy a house and grow old in it. They normally only leave for good when they’re making their way to the cemetery. In real life though, things are a bit different. Sometimes you need a change of pace. Maybe you’ve made enough money to move somewhere nicer or perhaps the current upkeep just isn’t feasible. Regardless of the reason, you may find yourself on the market for a new home and that can seem like a daunting task. But is it? How Does the Sale of a House Take Place in South Africa?
Besides agreeing to the price and signing all the contracts, if you wish to sell your house an individual will need to legally transfer the deed of the property into his/her name.
This procedure can be made easy with the use of a transferring attorney but this is not technically necessary and homeowners can do everything themselves. It is, however, important to pay attention to the following steps when you’re ready to sell –
- Sale price – The first step involves determining your selling price and forming a written agreement with the buyer. You may wish to engage with an attorney if you want an airtight contract, but once again, you can do everything yourself. Just be ready for a lot of negotiations.
- Cancelling bonds and obtaining the original title deed – If the seller still has an active bond, they will need to cancel this with the bank. This also requires the ID and proof of residence of both parties. Once this job is done, the bank will send the seller or attorney the original title deed for the property.
- Transfer documents – The municipality must be consulted to ensure that the seller has no outstanding debts and that all taxes have been paid and are up to date. Both parties will then need to sign all relevant transfer documents.
- Transfer Tax – The buyer will need to pay a transfer tax to SARS (because there are few things SARS won’t tax).
- Deeds Office – All relevant documents must be filed with the Deeds Office, the subsequent authorization process takes between 8-10 days, and then, once the paperwork has been sent and received, the transfer is complete and the house has been sold.
You can probably see now why most people hire transferring attorneys to do all this work for them, but if you don’t want to pay that extra fee you can try it yourself.
The Three Methods of Property Sales
When it comes time to sell your house, you should know all the available options. There are millions of different agencies, websites and services available around the world but we normally split all of these into 3 main categories –
- Traditional – Most of us will be familiar with traditional sales methods. They generally involve hiring a real estate agent and transferring attorney and letting them take care of all the busywork.
- Private – If you’re strapped for cash or confident in your own ability you can try a private sale. This is when you manage the sale and all relevant legal work yourself with no third-party assistance.
- Modern – If you’re among the more tech literate individuals of society you can always try selling your home on one of the many websites dedicated to property transfers. These websites are usually run by real estate agencies as well but boast a quicker, more streamlined process.
If you’re having trouble figuring out which method is best for you, it may help to consider the benefits and drawbacks of each style.
Pros and Cons – How Does the Sale of a House Take Place in South Africa?
Each form of property transfer has its ups and downs. The key is figuring out which type suits you.
|Property Sale Method
|Much of the work is done for you If you hire the right agent you will have access to a knowledgeable professional who will know all the ins and outs of property transfer
|The cost of hiring all the relevant professionals can be quite high If you hire the wrong agent, you may end up with a subpar marketer who may not get the best price for your property
|By doing the work yourself you can save all the extra money that you would normally have to pay to the relevant agencies You have complete control of the entire process
|Property transfer is a niche service that contains many, often unforeseen factors. You will need to learn when is the best time to sell, where to advertise, how much to sell for, etc. The sales process can be extremely stressful, especially when it’s your own home on the line. Sometimes, the extra hassle may not be worth the money you save
|The online process has been fine-tuned over time and is often the fastest, most efficient way to handle a sale As online traffic increases, online advertisements are becoming more and more effective tools for spreading the word about a potential sale
|If you aren’t the most tech-savvy person, online sales can be daunting and confusing, oftentimes it may be easier to just do things the old fashioned way Although scams exist in all forms of property transfer, they may be harder to spot online
It’s up to you to determine which method of selling is right for you, but it should be noted that most homeowners who try the private route are normally real estate agents themselves or at least have some experience in selling homes. As mentioned, there are many intricacies involved when getting the best price for your property.
Tips and Tricks for Selling Your Home
If you do take a more hands-on approach to the sale, make sure you remember to do the following –
- Figure out the right price – Even if you aren’t planning on hiring a real estate agent for the whole process, it might be a good idea to just get a property evaluation so that you can start selling at the right price.
- Figure out the right time – Certain months tend to have better sales figures. It’s vital that you brush up on these numbers so that you know when you’re likely to get the highest number of buyers.
- Advertise as much as possible – You could try to sell a mansion for less than R10 but if nobody knows about it, you aren’t going to get any takers. Find out about all the relevant channels for advertisements such as newspapers, websites, word of mouth, and more.
- Put on a good show – Make sure that buyers who inspect your house are seeing it at its best. Little things like clean windows and a new coat of paint could have significant impacts on the final price.
- Negotiate – Asking for too much might scare away a potential buyer but a little bit of haggling can often net you a great deal more than you would otherwise get.
What do I do if my Real Estate Agent is Acting Unfairly?
If you believe that your real estate agent is acting in an unfair or illegal manner, for example, if they change listing prices without first discussing it with you, you can report them to the Estate Agency Affairs Board to see if you have a valid complaint.
A Side Note for Sellers
Any known defects or issues with the property must be brought to the attention of the buyer before the deal is agreed upon. Make sure the other party knows if they are sharing their new home with a colony of termites, rats, or ghosts.
Will I get More Money for my Property if I use a Real Estate Agent?
An interesting study was mentioned in the book Freakonomics, in it the authors note that all available evidence suggests that using a real estate agent does not increase the overall selling price of a home.
This may entice readers to immediately hang the idea of hiring one but do remember that one of the biggest draws of hiring a real estate agent is the reduction in workload and hassle that comes along with them. Additionally, the study did show that real estate agents did manage to sell the property faster than it otherwise would have.
The first step in selling property is determining the price and finding a buyer. It’s important to make sure that both the buyer and seller are properly ID’d and have the relevant funds and paperwork.
Once a deal is agreed upon, the original owner must cancel all outstanding bonds relating to the property and receive the original title deed from the bank. All relevant transfer documents from the municipality must be signed and the transfer tax must be paid to SARS. Once all this is done, the legal work must be filed with the Deeds Office which will authorise and complete the trade.
You are able to manage a property transfer personally but due to the heavy workload and stress, it’s generally better to leave it up to a professional unless you have some experience in selling homes. Most people would benefit from hiring a real estate agent and a transferring attorney to streamline the process.
When putting a property on the market it is extremely important too –
- Determine the right asking price
- Begin the sale at the right time of year
- Keep the property clean and orderly for potential buyers
- Negotiate price
Potential buyers must be informed of any known issues with the property before they purchase it.
Disclaimer LAW101: All of our posts are for research purposes only. Law 101 aims to assist its readers with useful information on the laws of our country that can guide you to make decisions in line with the South African Governmental Laws currently in place. Although in many instances, our posts cite the constitution, they are intended to assist readers who are looking to expand their knowledge of the law. Should you require specific legal advice we advise you to get in touch with a qualified legal expert.
Found this article interesting? Leave us your thoughts below.