Many South African first-time homebuyers and sellers remain surprisingly ignorant of the basic legalities surrounding any property transaction.

So says Lanice Steward, MD of Anne Porter Knight Frank (APKF), who adds that in our training sessions with agents, it has become necessary to insist that they give clients a short educational rundown.

She says first-time homebuyers, in particular, tend to have absolutely no idea how property is bought and sold and how to go about getting a bond.

When the deal looks as if it will go through, one of the most common mistakes is to fail to appreciate that a signed contract is legally binding: If a better offer or prospect comes up the buyer cannot simply change his mind. Some young buyers have heard about the cooling off clause and think it applies across the board. In fact, it applies only to properties valued at under R250k.

Another common first-time buyer mistake is to underestimate the extra? costs of a transaction: transfer duty, attorneys fees and Deeds Office costs. Good agents, said Steward, will draw a buyers attention to these early on.

Some clients, said Steward, are scared of any documentation and try to avoid putting matters in writing until the eleventh hour.

This can be disastrous when it comes to submitting an offer because, quite apart from the fact that a written offer will put the agent in a far stronger position to negotiate, it is in fact illegal to make such an offer verbally.

Inexperienced buyers, added Steward, often show a marked reluctance to invade a home owners privacy?. As a result they fail to inspect homes carefully and never fully appreciate the partially latent defects and flaws.

A good agent will, of course, insist on faults being listed in written form but there is nothing which can replace a hands-on inspection.?

When buying a property always ask for the home plans. It is essential to see these.?

Once you have them, said Steward, hold onto them. Some years ago a fire at the Deeds Office destroyed several hundred plot plans, leaving owners, who did not have copies, with no option but to bring in a draughtsman and have them redrawn.

Then, too, many of those planning to buy a property using a trust, a close corporation (CC) or a company as the holding vehicle, should take note not only that this vehicle must have a tax number, but that the taxes must be fully paid up.

As soon as money is paid to achieve a transfer, there will automatically be an investigation into the holding vehicles tax status. If any money owed is still outstanding, the sale will be blocked.

If the tax defaulter is the seller, SARS may be prepared to take the outstanding sum from the money paid. If, on the other hand, it is the buyer, SARS will insist on the money being paid up before any further transactions take place.

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White applicants for properties has been consistently less than the combined total of Black and Coloured applicants over the last three years.

The most notable of these trends is that the percentage of White applicants has been consistently less than the combined total of Black and Coloured applicants over the last three years.

The proportion of Black applicants has risen steadily over the last few years, averaging 42% during 2009. However, this percentage has dipped in the first four months of 2010 to 38%.

In contrast, the proportion of white applicants has risen from an average of 43% in 2009 to 47% during the first four months of 2010. The proportion of Asian and Coloured applicants has remained constant since the beginning of 2008, averaging 8% and 7% respectively.

According to Saul Geffen, the downward trend in the percentage of Black applicants in 2010 can likely be attributed to the fact that the tough economic conditions and stricter lending criteria have had a bigger impact on potential buyers at the lower end of the property price spectrum.

The data shows that potential Black buyers make up 60-70% of total applicants for properties valued at less than R500 000. This proportion drops significantly to around 30% for properties valued at between R500 000 and R1 million, and 10-20% for properties valued at over R1 million.

“The stricter bank lending criteria imposed under the NCA has also made it particularly tough for first time home buyers who aren’t able to meet the affordability criteria.”

However, Geffen says that as the economy recovers, the percentage of Black buyers will likely re-commence its upward trend. “We expect to see an increasing percentage of Black buyers in line with the shifting  economic base in South Africa.” 

By choosing Mortgage Plus for a loan, you will get that continual service to make sure you are getting the best deal possible.

CONTACT US

Speak to a home loan consultant about financing your new property or reviewing your existing mortgage. We are able to assist in lowering your bond repayments and securing attorney discounts.

Complete this short form online
Call us on 011.327.4489
Email: morne@mortgagepluscc.co.za

www.mortgagepluscc.co.za