Buying or Selling a House

What are the most important aspects to consider when buying a house?

  • Contact your bank and find out whether you qualify for a home loan and if you do, what amount you qualify for.
  • Can you afford it? Make sure that you can afford the bond repayments and the extra costs like, rates and taxes, water and electricity and life insurance policy on your home loan.
  • Also consider your future needs, for example, is the property close to work, shops, schools, hospitals etc.

Check the following before you buy a house:

  • Examine the house thoroughly for any defects, for example, cracks in the walls, damaged roof etc.
  • Ask about extra costs, for example, cancellation costs, transfer duty, bond and registration fees.
  • Make sure that you have enough money to pay the deposit.
  • The seller must give you an Electrical Compliance Certificate and Entomological Certificate.
  • When you sign the Offer to Purchase you will be asked for an occupation date. This is the date that you intend to move into your house.
  • This date is decided by agreement between you and the seller.
  • If no date is set, the seller has the right to remain in the house until the house has been registered into your name and the seller has received the balance of the purchase price.
  • Please note: the contract for buying or selling a house must always be in writing.

ARE YOU SELLING A HOUSE?

Follow these easy steps:

  • Approach one or more reputable Estate Agents to list your property.
  • Avoid unregistered Estate Agents.
  • Ask the agent to show you his or her current registration card issued by the Estate Agency Affairs Board.
  • This certificate is your assurance that the Estate Agent is subject to the Estate Agency Affairs Board's Code of Conduct and Rules.
  • When your house is on show, keep your house neat and clean so that it is attractive to buyers on the day of the show.
  • Don't just sign an agreement – your Estate Agent must explain the agreement to you.
  • If you are unsure about the agreement or some of the clauses in the agreement, ask Legal Eagle for advice.
  • The Estate Agency Affairs Board can also assist you in this regard.
  • Estate Agencies have their own standard sale agreements. The Estate Agency Affairs Board also has a standard sale agreement that you can use for the purpose of buying and selling property.
  • The Board's pre-printed agreement is designed to give equal protection to both the buyer and seller.
  • Don't leave any blank spaces in the standard agreement. Complete the form carefully and cross out everything that does not apply to you and then initial in all the places on the document that you have written information or crossed something out.
  • You must give the purchaser an Electrical Compliance Certificate and Entomological Certificate.

What must I do if my Estate Agent has acted unprofessionally?

  • Contact the Estate Agency Affairs Board immediately for advice and assistance.
  • The Estate Agency Affairs Board will conduct an investigation and may conduct a hearing.

What important clauses should appear in the sale agreement?

  • The names, identity numbers and marital status of all the parties.
  • The buyer’s address.
  • Description and size of the property as detailed in your deed of transfer.
  • The selling price and whether a deposit will be payable. If so, the deposit money will be held in the trust account by the transferring attorney.
  • A provision that the buyer pays all transfer and bond costs.
  • The name of the attorney handling the transfer.
  • The date of taking possession and occupation.
  • The provision that the buyer is responsible for all taxes and other municipal charges from the day of taking possession.
  • The name of the Estate Agent and the amount of commission due. Please note that the commission is negotiable.
  • The provision for an Electrical Compliance Certificate and Entomological Certificate and who will be responsible for the costs of obtaining it.
  • In an agreement of sale there may be suspensive condition clauses, e.g. the sale agreement must indicate whether the buyer will obtain a bond or not. The sale cannot proceed until all the suspensive conditions have been met.
  • If the purchase price is R250 000 or less, a cooling-off period of 5 working days will be applicable. This is applicable to all home – buyers.
  • You should note that the buyer is responsible for all the costs of registration even though this is done by the seller's attorney. The seller is responsible for the cost of cancellation of the bond.
  • Remember that the buyer will be liable for the agent's commission and other costs if he/she cancels the agreement for an unjustifiable reason.

Key

  • BOND REPAYMENTS: Paying back the home loan granted by a bank or a financial institution.
  • DEFECTS: Faults / imperfections.
  • ELECTRICAL COMPLIANCE CERTIFICATE: Certificate stating that the electricity is in accordance with the necessary regulations.
  • ENTOMOLOGICAL CERTIFICATE: A certificate required by law in some coastal provinces to be obtained before transfer of a property confirming that it's structure is free of woodborer or termite infestation.
  • ESTATE AGENCY AFFAIRS BOARD: A board that regulates the conduct of a person who is authorized to act as an agent for the sale of land and property.
  • COOLING-OFF PERIOD: A period within which a buyer can exercise the option to cancel the sale agreement.
  • SUSPENSIVE CONDITIONS: These are conditions included in the agreement by the buyer or the seller which must be fulfilled for the agreement to become a Deed of Sale, which is legally binding on all parties. These clauses allow the buyer or the seller to cancel the agreement if one or more conditions are not met. The agreement becomes null and void and none of the parties will have any claims against each other.

Suspensive conditions normally cover the following:

  • Approval of a Loan. This clause allows for the purchaser to obtain a mortgage bond for a specific amount within a specific time period. This condition will only be met if approved by a specific bank or financial institution.
  • Sale of Purchaser's Property. Very often, purchasers have to sell their property in order to finance a new property. The clause must then state the exact procedure that has to be carried out, that has to include a specific time period. The sale cannot proceed until the buyer has sold his house by the specified date and that all the conditions attached to his sale are met. Any clause in the Sale Agreement beginning with the words ...“This offer is subject to”... is a suspensive condition.

Contact Details of Estate Agency Affairs Board

Tel: (011) 731 5600
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.
Address: 63 Wierda Road East, Sandton, Johannesburg.

How can Legal Eagle help you?

Should you require any assistance, please contact your Branch and a Legal Counsellor can check that the agreement is reasonable. He/she can also help you to lodge a complaint with the Estate Agency Affairs Board. In addition you may request a copy of the offer to purchase from your nearest Legal Eagle Branch. Please note that the legal expenses incurred in the transfer of property and the registering of bonds is not covered by the Legal Eagle policy.