By Ruan Minnaar – MidCity Realty Principal
Selling your property can be a daunting process to navigate, but it doesn’t have to be a nightmare. If you partner with professionals and consider these useful tips, you won’t have to be caught off-guard by surprises.
Partnering With a Property Practitioner
Appoint a professional estate agent on an open, dual/joint, or sole mandate to guide you through the sales process. Their property, area, marketing, negotiation and other skills, as well as partnerships with reputable service providers in the industry, should ensure a hassle-free process for you. If this is not your core business and area of expertise, rather trust a professional to assist you. They usually earn commission only, so they would have your best interest at heart – they would also want to sell your property as quickly as possible, at the highest possible price.
Deciding on a Selling Price
If you price your property correctly and competitively, it shouldn’t take longer than a few weeks to sell. Over-priced properties stay on the market for months before the sellers eventually decide to reduce the price (usually to lower than what the initial price could have been). Remember, buyers are well informed, and should they apply for financing, the banks send a professional valuer to do a valuation on the property before they offer them a bond.
Price is determined by various market factors and ultimately, by how much a buyer would be willing to pay for your property. The estate agent would be able to make recommendations to you, based on the following criteria:
- How much did similar/comparable properties sell for in your immediate area for the last year or two?
- How much are similar/comparable properties in your area currently being advertised for?
- Your property’s condition.
- Extras, finishes, features and special attributes your property offers.
- Current economic conditions.
Getting a property ready for sale is an integral part of the marketing process. Before an estate agent takes photos of your property or brings potential buyers to view, consider the following:
- Declutter your home and remove personal photos and religious artefacts.
- Tend to the garden – ensure that overgrown trees/bushes and sides are neatly trimmed, mow the lawn, rake the leaves, water the plants, roll up the hosepipe and pick up any animal droppings.
- Make sure that the swimming pool is sparkling clean.
- Clean the house thoroughly – vacuum carpets, mop hard floors, clean dishes and countertops, wash windows etc.
- A new fresh layer of paint, in a modern and neutral colour, may go miles in improving your property’s attractiveness.
- Clear all surfaces in the kitchen and bathrooms of clutter.
- Neatly make all the beds.
- Stow away any valuables.
- Pack all clothing, towels, shoes and toys away.
- Open all curtains/blinds, turn all lights on and switch TV’s off.
- Open all interior and exterior doors.
- Ensure a fresh clean smell through scented candles, room spray or baking vanilla pods in the oven just before the viewing.
- Create a homely ambience through fresh flowers in a vase, running the water feature, and switching on the fireplace.
- Put the toilet seats down.
Property Condition Report
When listing your property, the estate agent will ask you to complete an immovable property condition report, wherein you’ll declare your knowledge about latent and patent defects of a significant nature. This report should be presented to potential buyers before they sign an offer to purchase (OTP), to inform their decision. The OTP becomes the sales contract once you accept, and this report will form an annexure to that agreement.
90-Day Bond Cancellation Notice
Banks usually require their clients to give 90-days’ notice prior to cancelling their bonds. If you didn’t give this notice yourself, the notice period will run from the date the transfer attorney requested cancellation figures. Should registration be quicker than the notice period, a penalty would be payable by the bondholder (equal to three months’ interest on the bond).
Bond Cancellation Fee
A bond cancellation fee (usually in the region of R4000) will be payable before registration by the seller to the cancellation attorneys (appointed by the bank). While a home loan/bond over a property has not been paid in full, the bank will hold the title deed of the property as security and will not release it without a guarantee that the outstanding balance will be settled on registration.
Choosing a Conveyancing Attorney
As seller, you have the right to nominate a conveyancer to attend to the transfer of your property. It’s best to appoint an established, reputable law firm that specialises in property law. Make sure your conveyancing firm has the expertise to manage and expedite the transfer process while giving frequent and relevant feedback. The estate agent will be able to recommend a few firms to you. The purchaser will be responsible for paying the transfer fees.
Certificates of Compliance
The following certificates must be provided and paid for by the seller before registration, if applicable:
- Electrical certificate of compliance – in terms of the occupational health and safety act, no change of ownership of property may be allowed without a valid electrical compliance certificate. It can only be issued by an accredited electrician.
- Electric fence compliance certificate – applicable if there’s an electric fence or when the property borders the electric fence in a complex/estate.
- Gas compliance certificate – where a permanent gas installation (i.e. stove or fireplace) uses a gas bottle larger than 9kg.
- Beetle infestation clearance certificate – usually applicable in coastal regions (i.e. Kwa-Zulu Natal)
- Plumbing/water compliance certificate – usually applicable in Cape Town.
- SPLUMA certificate – the Spatial Planning and Land Use Management Act certificate pertains to building plans and municipal zoning regulations, applicable in certain parts of Mpumalanga.
The seller will also be responsible for repairs, if any, to be done for the relevant certificate(s) to be issued.
The Deeds Office will require proof that all your rates, taxes and utilities have been paid up to date before they will register the transfer of your property. The transfer attorney will request clearance figures from the municipality, which will include an advance payment and an admin fee. This is payable by the seller, but you will be entitled to a pro rata refund of any credit on your account after registration.
HOA and Body Corporate Clearance Certificate
If the property is situated in a sectional title development and/or an estate, a clearance certificate from the Body Corporate and/or Homeowners’ Association (HOA) is required to indicate that the levies are paid up to date. The seller is responsible for payment of the administration fee, payable to the body corporate and/or HOA, which usually amounts to between R1 000 and R1 500 (but varies between different schemes and estates).
Although the transfer duty is payable by the purchaser, your income tax return submissions and payments must be up to date as well, for SARS to issue the transfer duty receipt (also needed for registration in the Deeds Office).
Capital Gains Tax
Capital gains tax (CGT) applies to the profit you make from the sale of a property. The current exclusion for individuals or special trusts on a primary residence is R2 million on properties not exceeding 2 hectares. This will be payable in the tax year the registration takes place and will be based on your income tax bracket. Speak to your tax consultant for advice.
The estate agent and transfer attorney will ask for copies of your ID and proof of residence (not older than 3 months), in accordance with Financial Intelligence Centre legislation.
As an owner, you are responsible for the short-term insurance over your property. Do not cancel your short-term insurance before registration. If you do, the property is not insured against any damages that may arise in the period between cancellation of the insurance and transfer of the property. If a purchaser occupies the property before registration, it can increase your exposure to risk, and insurance is therefore essential.
Although it is not a requirement for the seller to provide copies of up-to-date and approved building plans to the buyer, it’s advisable to make sure that the building plans are in order, to avoid delays and possible future lawsuits. The purchaser’s bank may insist on copies of the plans, as a condition of them offering the loan. If the seller is aware of the fact that building plans are not approved as-built, the immovable property condition report requires disclosure thereof.
Should you not have sufficient funds available to pay for certain charges (i.e. municipal charges, certificates of compliance, building plans etc.), the transfer attorney can assist you to arrange bridging finance from a reputable institution. The amount advanced plus interest will be subtracted from your proceeds of the sale and refunded to the bridging company upon registration.
Budget for Moving Costs
Packing is never fun, but use the opportunity to get rid of unused items to simplify and declutter your life. Don’t forget to budget for the moving costs in advance (i.e. paying for a furniture removal company, a deposit payment on the new place, switching on new accounts etc.).
Duration of the Transfer Process
The registration process takes approximately 6-8 weeks from bond grant to registration, provided there aren’t any delays.
Transactions may take longer than usual if:
- The purchaser takes longer to secure financing (i.e. self-employed individuals).
- A deceased or insolvent estate is involved.
- One of the parties lives outside of South Africa.
- Problems occur with rates clearance due to billing issues on utilities or faulty meters.
- One of the parties has outstanding tax issues with SARS.
- The seller’s proceeds are insufficient to cancel the existing bond.
- Building plans are not in order.
- Lost title deed.
- Multiple transfers must register simultaneously as the purchase price on the one is funded by the proceeds of the other .
Buying and selling property is a thrilling experience. Franklin D. Roosevelt was quoted saying: “Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.” We are passionate about property – with 40 years’ experience and trusted partnerships, we love to help buyers and sellers on this exciting journey!