MONEY CLINIC | I'm a first-time homebuyer. How long does the home transfer process take?

As this is a lengthy legal process, buyers must budget for additional costs during the transfer process.
As this is a lengthy legal process, buyers must budget for additional costs during the transfer process.
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So you've found the house that you're ready to make your home, you've submitted your offer to purchase, and the seller finally accepted it.

So, what now? Now the waiting game begins. "There is a misconception that you are handed the keys as soon as the offer is accepted and the deposit has been securely paid and stored, but in reality, it can take up to three months before you are legally able to move in," according to Jackie Smith, Head of Buyers Trust (a subsidiary of ooba Group). But what is the actual process before the property is legally registered in your name?

Smith shares a step-by-step guide on what you can expect:

Step 1: Agreement of sale 

Before the property transfer can occur, an agreement of sale must be drawn up and signed by both parties.

"An agreement of sale contract typically lays out details such as the property description as it will legally appear, the personal details of both buyer and seller, the purchase price and deposit amount and the conditions that the agreement of sale is subject to - for example, the approval of the purchasers' bond, says Smith.

How long this takes: Anywhere from a few days to a few weeks, depending on how responsive both parties are.

Step 2: Home loan approval

Buyers will generally shop for the best home loan interest rate through a bond originator. Once the home loan has been approved, a bond attorney is appointed to draw up the bond documents for the purchaser to sign.

How long this takes: Between 3-7 working days. The signing of bond documents takes place closer to the lodgement of the transfer in the Deeds Office.

Step 3: Conveyancing 

A transferring attorney, best known as a conveyancer who the seller appoints, will obtain proof of residence and ID documents from both parties and apply for the seller's bond cancellation figures. "Once this is completed, the bank sends the original property Title Deed to the bond cancellation attorneys."

How long this takes: Between 2-4 weeks. This process must be concluded before the lodgement of the transfer, and the seller must give the bank notice of cancellation within 90 days of cancelling the bond.

Step 4: Signing transfer documents 

Once the paperwork is obtained, both parties sign the various transfer documents. The conveyancer will then apply for a clearance certificate from the municipality, confirming that all rates and taxes on the property have been paid for the last two years.

How long this takes: Depending on the efficiencies with the Municipal offices, this process should take no more than 7-10 working days.

Step 5: Pay transfer duty

Transfer duty (a percentage of the purchase price calculated on a sliding scale) must be paid on all existing homes sold for over R1 million. "This tax must be paid by the buyer to SARS, and they will also need to pay the conveyancers fees," she adds.

How long this takes: Dependent on how long it takes SARS to issue a Transfer Duty receipt. 

Step 6: Deeds office registration

Finally, the conveyancer lodges all required documentation, including the new bond and the cancellation of the old bond, with the Deeds Office. Provided there are no changes, the transaction is registered, and the buyer is the home's legal owner.

How long this takes: Between 8-10 working days.

Hidden costs in the transfer process

Smith emphasises that as this is a lengthy legal process, buyers must budget for additional costs during the transfer process. "Buyers are responsible for the legal fees of the conveyancer and paying the transfer duty to SARS. However, 'additional costs' are also to be paid, including rates payable to the municipality, fees to the relevant banks, guarantees issued, and administrative costs incurred in filing paperwork".

"Remember that any delay in paying these fees will only extend the time it takes to transfer the home, so it's important to have cash on hand."

What happens if the transfer process is delayed?

Multiple factors could cause the transfer to be delayed as there are so many parties involved in the process: SARS, the three different types of attorneys; the municipality; the banks; the Deeds Office, and of course, the seller. Slow turn-around times can be a source of frustration for buyers, but Smith highlights that there is one silver lining to this:

"If you have paid your 10% or more deposit into an account that generates the maximum interest, as is possible by using a secure third-party alternative such as Buyers Trust, you can rest assured that you will be rewarded for your patience through the interest accrued."

Questions may be edited for brevity and clarity.

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