Spring is a great time to address two questions which sellers and buyers often ask: how does the transfer process actually work, and how long does it usually take?

Have a look at our “Transfer Process in a Nutshell” flowchart for an outline of the major steps in the process, all the way from signing the deal through to the transfer being registered in the Deeds Office.

Then we’ll move on to the second question: “How long does it take?” 

Spring is in the air and, as the annual uptick in property sales kicks in, let’s address two questions commonly asked by both sellers and buyers who are unsure about exactly what happens after they sign their sale agreement:

1. How does the transfer process work?
2. How long does it take before the seller gets paid and the buyer becomes the new registered owner?

Let’s begin with this simplified “in a nutshell” flowchart of the transfer process:

The transfer process in a nutshell

Offer accepted

• The buyer signs an offer to purchase, and the seller accepts.
• A binding sale agreement is now in place, subject to any suspensive conditions (conditions that must be met before the sale is final — like bond approval, or the supply of approved building plans, etc).

Conveyancer appointed

• The seller nominates the transferring attorney (conveyancer) to manage the transfer process.
• The conveyancer opens a file, calls for FICA documents and starts the process once the bond has been granted.

Deposit paid

•  The buyer pays the deposit into the conveyancer’s trust account.
• These funds are safe, regulated, and only released to the seller once transfer is registered.

Bond approval (if applicable)

•  If the buyer needs a home loan, they apply to the bank.
• Once granted, the bank appoints a bond attorney to register the new bond.
• Without this approval, the sale cannot continue.

Seller’s bond cancellation

•  If the seller has an existing bond, their bank issues cancellation figures.
• Sellers should note that most banks require a 3-month notice period for cancellation of their bond. They can either wait for the 3-month period to expire or pay the bank’s cancellation fee.
• A cancellation attorney is appointed to cancel the old bond once guarantees are in place. These attorneys will request from the conveyancer a guarantee equal to their cancellation figure as received from the seller’s bank.

Securing the balance of the purchase price

•  The conveyancer ensures that the balance of the purchase price is covered by bank guarantees (from the buyer’s bank), and/or cash paid into trust.
• Transfer will not be lodged until the full purchase price is secured.

Drafting and signing of transfer documents

• The conveyancer receives a guarantee from the bond attorneys or cash from the purchaser, as well as the cancellation figures from the bond cancellation attorneys.
• The conveyancer prepares transfer documents for the buyer and seller to sign.
• The buyer pays transfer costs (the attorney’s fee, transfer duty if applicable, any disbursements necessary to effect transfer).

Certificates, clearances and transfer duty

•  The seller obtains all required clearance certificates (usually, as applicable, electrical, plumbing, gas, beetle, electric fence, etc).
• The seller pays municipal rates and, where applicable, body corporate or HOA levies to the conveyancer, who pays same and obtains clearance certificates.
• The conveyancer pays SARS the transfer duty due or obtains an exemption certificate.

Lodging at the Deeds Office

• Once everything is in place, all attorneys (transfer, bond and cancellation) lodge documents together.
• Deeds Office examiners check the paperwork.

Registration and payout

•  Transfer is registered and a new title deed is issued in the name of the buyer.
• The conveyancer pays the seller’s bond, estate agent’s commission, any refunds or interest due to the purchaser. The net proceeds go to the seller.
• The buyer is now the proud new owner.

Time to celebrate!

How long does it all take?

How long is a piece of string? If everything goes swimmingly and the bureaucratic stars truly align in your favour, the total timeframe from signing the sale agreement to popping the champagne could be as little as eight weeks. On average, however, it’s safer to work on no less than ten to 12 weeks, and possibly a lot more.

What could delay things? This is a complicated process involving a disparate array of role-players and a host of opportunities for unforeseen delay. Some of the more common sources of delay (and frustration!) centre on bond approval, bank processes, SARS and municipal delays, clearance certificates and repairs, lost title deeds, intervening public holidays, and Deeds Office backlogs. But the list really is endless.

Bottom line: you need professionals in your corner to protect your interests and to move the process along as quickly as possible. We’re here to help!

© DotNews

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.