Using an estate agent

How can an estate agent assist me?

Your search for a new home can be made much easier if you use the services of an estate agent. Agents make it their business to provide every service connected with your search for a home – from expert advice in the early stages, to careful monitoring of taking transfer of your home. The more closely you work with one agent, the better your needs become known and the more effectively they can help you, saving you time and possible trouble. All agents are bound by law to deal fairly and ethically with both the buyer and the seller. Because the seller typically mandates the agent, the agent is legally obliged to represent the seller’s interests. This means you must decide what offer to make and what counter-offers to accept. Don’t make or accept an offer that you are not completely comfortable with.

What are the benefits of using an estate agent?

The agent can help you to set up a plan of action through an analysis of your needs and finances, the current housing market and homes available in your price range. The agent personally conducts your search to find neighbourhoods and homes that fit your requirements. The agent can guide you through making an offer on a home and presenting it to the seller.

What is the role of the estate agent?

The estate agent is the link between the buyer and the seller. The agent will negotiate an agreement of sale acceptable to both parties. An offer to purchase is drafted by the estate agent. This must be signed by the agent, the buyer and the seller. Once signed it becomes a legal binding contract of sale. A copy of this document must be attached to the loan application form. For this service, the estate agent charges a fee or commission paid by the seller.

Ten questions for your attorney

1. To whom do I pay the Deposit?

This will depend on what your contract says. Your deposit can be paid either to the estate agency or the conveyancers appointed to handle the transfer. They both have trust accounts where your money is protected. Please ensure you receive the appropriate receipts. Don’t pay your deposit directly to the seller or to an estate agent, as opposed to the estate agency company.

2. Who gets the interest on the Deposit?

Unless otherwise agreed, the interest is paid to you after registration of transfer. On your written authority, both your estate agent and conveyancer can arrange for it to be invested in an interest-bearing account, and will act in your interests by placing it in the best short-term investment available.

3. To whom do I pay the Occupational Rental?

Your occupational rent goes to the estate agent or the conveyancer. They will usually pay it into the seller’s bond account or directly to the seller, if he has paid off enough of his bond account. You could pay it directly into the seller’s bond account if so agreed, but you may be required to provide proof of payment each month.

4. When will I have to sign the Transfer Documents?

This may only be a few weeks after the sale agreement is signed. Usually your conveyancer will wait until the bond is granted and he has received the cancellation figures for the seller’s existing bond. Only then can the guarantee authority forms be completed and signed. You can phone the conveyancer for an update at any time

5. How long will the transfer take to register?

This depends on the circumstances and due dates for the bond grant, and on the guarantees stipulated in the deed of sale. The average for most sales is about three months from the date of sale. When there are no complications, registration can be effected within two months. In cases where there are complications, registration can be delayed. In such cases, you will need to stay in touch with your conveyancer.

6. What will my transfer and bond costs be?

Your estate agent and attorney should be able to answer this question based on a schedule of transfer and bond costs. The actual transfer fees depend on the purchase price of the property. Bond costs depend on the total loan registered – and whether you are buying in your own name or in a trust, close corporation or company. Our fee calculator will give you a clear indication of the costs involved.

7. When must my transfer costs be paid?

This usually happens a few weeks after the sale, when you sign your documents. Your conveyancer will require payment, since he has to pay the transfer duty – the major charge on most transfers – in advance, as well as the rates or levies due to obtain a clearance certificate. Don’t delay making a payment – it will unnecessarily delay the transfer.

8. Who will register the transfer bonds?

The bank will have a local panel of conveyancers for bonds, and one of these will be instructed to register your bond. If the transfer conveyancer is one of those on the panel, he will probably do the bond registration as well. The bond costs will be the same, though your transfer may go through faster if the same conveyancer does both.

9. Who will contact me on registration?

Your conveyancer’s secretary should contact you on registration to advise you. You will also be given a final statement of the account. Your estate agent may also phone you to confirm registration. The bank will send you a letter advising you of the registration of your bond, and the date when your first instalment is payable.

10. Where will I get the keys to the property?

It is best to make an arrangement with your estate agent to pick up the keys from them on the agreed day of occupation.

Interest on your home loan

The interest rate the bank charges is determined by a number of factors.  The interest rate will reflect the risk the bank perceives with the transaction.  The amount of the loan, your personal financial record, your income and repayment, and perhaps most importantly, the deposit you have available, will determine the rate engaged.  Given the competitive nature of the home loan market, significant differences in rate are unusual but if you approach only a single bank, you may not receive your best rate. While the rate of interest is an important consideration, one cannot lose sight of other considerations when deciding on where to place your home loan business.  The savings possible through use of an access facility could easily outweigh a small rate premium.

Please contact us if you require any further information or would like to apply for finance:

Complete this short form online

011.327.4489 / 0861 1111 93

morne@mortgagepluscc.co.za

www.mortgagepluscc.co.za

Fixed mortgages are mortgages that are secured or pegged at a particular rate.  This means that if the reserve bank increases or decreases the repo rate someone that has a fixed mortgage won’t be affected – your installment won’t increase or decrease.

Keep these essential things in mind when applying for a fixed mortgage:

1.  Possible interest rate decreases

When looking at fixed mortgages you need to be mindful of the current interest rate trend.  Are rates currently on a downward trend? Or are interest rates generally going up?

If interest rates are coming down, it wouldn’t be wise to opt for a fixed mortgage as you will lose out on cheaper interest rates and lower monthly repayments.

The opposite is also true.

2.  High Fees to get out of a fixed mortgage

I you have already locked yourself into a fixed mortgage you may have difficulty getting out of it as usually there are high fees and certain restrictions applicable.  Be sure to ask about the terms and conditions before signing and read your contract.

3.  Fixed mortgages rates are higher

You should also be aware that fixed mortgages are locked in at higher rates than the prevailing prime interest rate. At the time of writing this article the prime interest rate is 9 %, at typical 3 year fixed rate would currently be around 11.05%.

How does this affect you?  If the current trend in interest rates is that it’s going up, and rates normally go up in 0.5% increments, it means that if you had a variable rate it would take you almost a year to get to 13.05%. That means that having a variable interest rate would still allow you to save as the rate goes up, rather than having a fixed interest rate.

Please contact us if you require any further information or would like to apply for finance:

Complete this short form online

011.327.4489 / 0861 1111 93

morne@mortgagepluscc.co.za

www.mortgagepluscc.co.za