Buying or selling property is probably one of the most stressful things in life and often, buyers need help to understand the processes involved.
Once the prospective buyer finds the home they would like to purchase, they will need to complete a formal offer to purchase which is then presented to the seller for approval, and the property specialist assists the buyers in this process.
According to Engel & Völkers, when entering the property market a buyer should be aware of possible costs they could occur.
These are bond costs and transfer fees, and in the case of a seller, an electrical compliance certificate and pest and gas certificates (if applicable).
At the initial thought of buying or selling, there are certain steps that could be taken to ensure that the process runs as smoothly as possible.
Sellers should request cancellation figures from their banks to avoid penalties and to speed up the registration process.
However, should your property not sell within three months, you will need to re-issue this request.
Also ensure that you have a copy of your building plan as the buyer may request this, says the agency.
The agency says buyers can have themselves pre-qualified to confirm their qualification and affordability free of charge.
EV Finance can help with this and would-be buyers need to provide their latest payslip and a list of personal expenses, which include car monthly repayments, credit card and loan repayments, and personal expenses such as school fees, food, and water and electricity.
For those who are renting or selling, there is no need to include bond repayment, however, if you plan on retaining your property and acquiring another one for investment, you will need to include this.
EV Finance will then issue the prospective buyers with a formal home loan pre-qualification certificate and the property specialist can now start the property search for your dream home, says the agency.
Once the prospective buyer finds the home they would like to purchase, they will need to complete a formal offer to purchase, which is then presented to the seller for approval and the property specialist assists the buyers in this process.
Should the seller accept the offer, the offer to purchase is then concluded.
The agency says both the buyer and seller need to have their FICA documents (copy of ID and proof of residence) ready, which need to be handed to their estate agent with the contract.
The buyer can now apply for finance, which EV finance can again do on the buyer’s behalf at no additional cost.
It is important to make sure you have all the necessary documents before applying for your bond, says the agency.
An EV Finance representative will contact the buyer and obtain the financial documentation needed.
There are two groups of applicant’s, salaried and self-employed individuals.
For each group the banks have different pre-requisites.
It is important to make sure you have all the necessary documents before applying for your bond, says the agency.
Salary applicants will require:
1. Payslips – Your income will be verified against your bank account
2. Latest three months or latest six months bank statements if in receipt of allowances or variable pay – Bank statements must be stamped by the bank (internet statements are not allowed).
3. Detailed income and expenditure statement signed by the applicant.
4. Statement of assets and liabilities.
5. Identity documents. If the applicant is not a South African citizen copies of proof of residence and work permits are required.
6. Rental contracts in respect of rental income – This is to be used in affordability assessment.
Self-employed applicants
1. Comparative financials covering a trading period of two years. If financials are more than 6 months old, then up-to-date, signed management accounts are required.
2. Letter from the auditor confirming personal income.
3. Cash flow forecast for ensuing twelve months.
4. Personal statement of assets and liabilities.
5. Personal as well as business bank statements. (Absa: covering latest 12 month period, other banks the last 6 months)
According to Engel & Völkers when entering the property market, a buyer should be aware of possible costs they could occur.
6. IT34
7. Company/CC/Trust – statutory documents
8. Identity document of directors, members, or trustees.
Once all the required documentation has been received, the application will be submitted, in the case of EV finance this is done electronically.
As per the service level agreements within the four major banks, an Approval in Principal (AIP) is issued within five to seven working days.
An AIP qualifies you for the bond amount according to your credit score and affordability.
An AIP is subject to valuation, which the bank will take care off and should the property qualify, a final grant will be issued within 48 hours.
Once the prospective buyer receives the Final Grant, they will receive a formal quote.
Upon accepting the bank’s quotation, instruction is sent to the relevant bond attorney and the property registration process takes place.
