Homebuyers often ignorant of legislation and practices
Despite ongoing press publicity about property law and regular discussion on these matters at a whole range of seminars and training sessions, many South African homebuyers and sellers remain surprisingly ignorant of the basic legalities surrounding any property transaction, says Lanice Steward, MD of Anne Porter Knight Frank, the Cape estate agency that operates in Cape Towns southern suburbs and the Atlantic Seaboard.
In our training sessions with agents, said Steward, it has become necessary to insist that they give clients a short educational rundown.
First time homebuyers in particular, said Steward, tend to have absolutely no idea how property is bought and sold and how to go about getting a bond.
When the deal looks as if it will go through, one of the most common mistakes is to fail to appreciate that a signed contract is legally binding: if a better offer or prospect comes up the buyer cannot simply change his mind. Some young buyers have heard about the cooling off clause and think it applies across the board. In fact it applies only to properties valued at under R250 000.
Another common first time buyer mistake is to underestimate the extra costs of a transaction: transfer duty, attorneys fees and Deeds Office costs. Good agents, said Steward, will draw a buyers attention to these early on.
Some clients, said Steward, are scared of any documentation and try to avoid putting matters in writing until the eleventh hour.
This can be disastrous when it comes to submitting an offer because, quite apart from the fact that a written offer will put the agent in a far stronger position to negotiate, it is in fact illegal to make such an offer verbally.
Inexperienced buyers, added Steward, often show a marked reluctance to invade a home owners privacy. As a result they fail to inspect homes carefully and never fully appreciate the partially latent defects and flaws.
A good agent will, of course, insist on faults being listed in written form but there is nothing which can replace a hands on inspection.
When buying a property always ask for the home plans. It is essential to see these.
Once you have them, said Steward, hold onto them. Some years ago a fire at the deeds office destroyed several hundred plot plans, leaving owners, who did not have copies, with no option but to bring in a draughtsman and have them redrawn.
Then, too, many of those planning to buy a property using a trust, a close corporation or a company as the holding vehicle, should take note not only that this vehicle must have a tax number but that the taxes must be fully paid up.
As soon as money is paid to achieve a transfer, there will automatically be an investigation into the holding vehicles tax status. If any money owed is still outstanding, the sale will be blocked.
If the tax defaulter is the seller, SARS may be prepared to take the outstanding sum from the money paid. If, on the other hand, it is the buyer, SARS will insist on the money being paid up before any further transactions take place.
Article by: www.anneporter.co.za