The Bond Process in South Africa
Purchasing a property and applying for a bond can be a very stressful and lengthy process. To help you understand it better we listed below the entire process and who is involved.
Who is Involved?
• Estate Agent
• Transferring Attorney ( appointed by the seller )
• Bond Attorney ( appointed by the bank )
• Canceling Attorney ( appointed by the bank )
Note : One attorney can handle all the above procedures, simplifying the whole process.
1.The Offer to Purchase The buyer and seller come to an agreement and both sign the offer to purchase. The buyer then applies for a bond or home loan. In order to apply for a loan th buyer will need to supply : The offer to purchase, a copy of the ID's of all applicants, three months bankstatements of all applicants, and three months payslips of all applicants.
2. Bond or Home Loan Approval Your home loan or bond is approved, and the bank instructs the bond attorney to register the home loan ( bond ).
3. The Transfer of Property The seller then advises the transferring attorney to transfer the property, and the title deed and cancellation figures are requested from the bank who currently holds the bond or home loan over the property. Then a statement of rates and taxes ( Rates Clearance Certificate ) is requested from the local authority.
4. The Bond Attorney The bond attorney contacts the transferring attorney, and advises the transferring attorney of the amount available for guarantees. The transferring attorney then requests for the title deed and cancellation figures.
5. The Cancellation Attorney The cancellation attorney is then requested to cancel the sellers home loan ( bond ) on receipt of a guarantee for the outstanding amount owing.
6. The Transferring Attorney The transferring attorney now receives the title deed and cancellation figures and sends off a copy to the bond attorney. The buyer and seller are now contacted to sign the transfer documents. Once this has been completed, the buyer now pays the transfer costs and the transferring attorney then pays the transfer duties, rates and taxes.
7. The Bond Attorney The bond attorney now prepares the home loan ( bond ) documentation with the buyer. The buyer then signs and pays all the costs involved. Next the bond attorney prepares and issues the necessary guarantees, forwards them to the transferring attorney and then gets the documents ready for lodging the Deeds Office.
8. Transferring Attorney Once the transferring attorney receives all the guarantees, they are the forwarded to the canceling attorneys.
9. Cancellation Attorney The cancellation attorney gets consent from the lending bank to cancel the sellers home loan ( bond ).
10. The Deeds Office Once all the documents have been signed and all the costs have been paid, all the documents are lodged at the deeds office by all the attorneys concerned. It takes about two to three weeks for the Deeds Office to check the documentation and then all the attorneys are contacted once it is ready for final registration which takes place on the same day.
11. Bank Pays the LoanOn the day of registration the bank pays the Loan.
Generally it takes at least three months for the registration and transfer of a Home Loan ( Bond ).
What can delay the registration of a Home Loan ( Bond )
• Personal Information not provided by the seller/buyer • Seller doesn't provide details of the bank holding the existing Bond.
• Cancellation and Title deeds not provided to the transferring attorney by the existing Home Loan ( Bond ) holder.
• The Local Authority receiving the Rates Clearance Certificates late.
• The buyer does not pay the deposit. ( if applicable )
• Delay in the provision of guarantees.
• If the buyer does not pay the transfer costs on time.
• If the seller delays the signing of the transfer papers
• If the buyer delays in forwarding their income and expenses documents which are required by the banks.
• If the buyer delays the signing of the transfer documents.
What can be done to speed things up?
• Get a pre-approval certificate
• Provide all the documentation requested
• Pay your deposit on time. ( If applicable )
• Pay the transfer costs on time.
• Sign all the documents on time. i.e - when requested to.