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The legal process behind buying a home

Buying a house involves more than just money. There is also a legal process that must be followed, and it helps to understand what this is all about.

Steps in the legal process

We’ve put together a guide to help you understand the legal process at each stage of buying your home. Read on to find out more.

Making the offer
You’ve found your dream home and you’re ready to make an offer. Make an appointment with the seller / estate agent so that you can thoroughly inspect the property.

You are also within your rights to ask the seller – or their agent – if there’s anything that could slow down the transfer processing. Reasons for this can range from the seller not being up to date on their rates and taxes, to them failing to notify the bank of their intention to sell within the required 90 days.
Signing the offer to purchase
Your contract for buying the property must be in writing and signed by both you and the seller. This is what becomes the agreement of sale if the seller accepts your offer. You can get a second opinion from an independent lawyer if you’re not sure what the contract means.

However, because of the Consumer Protection Act, your real estate agent is legally obliged to make sure that you fully understand what everything in the contract means. Also, agents aren’t allowed to use the “voetstoots” (as is) clause as a defence for not telling you about any faults and flaws they are aware of.
Paying the deposit
While it may not be legally required, paying a deposit is a sign of good faith. It tells the bank and the seller that you’re willing to purchase the property and able to contribute towards the purchase price. Generally, a deposit is at least 10% of the purchase price.

It is advisable for you to choose to pay your deposit into the conveyancer’s trust account rather than the estate agent. Attorneys Trust accounts are covered by the Fidelity Fund and professional indemnity insurance, which protects you against neglect and theft, so if something does happen to your deposit while in the Attorneys Trust account, you can then claim it from the Attorneys insurance.
Making the transfer
Registering the property into your name is done by a conveyancer or transfer attorney, who is usually appointed by the seller. It is the buyer’s responsibility to pay the Transfer Attorney’s fees along with the transfer duties payable to SARS. The conveyancer prepares the documents and sends them to the Deeds Office after you have signed them. Then a conveyancer appointed by your bank (the Bond Attorney), will register the mortgage bond over your home as security for the home loan. You are also responsible for the Bond Attorney fees.

A different law firm will then cancel the seller’s existing bond (if there is one registered) with the Deeds Office

The Seller is responsible for the cancellation costs
Taking occupation
You can move in before the transfer is official if the seller agrees to this. You and the seller will negotiate a rental for this period.

On registration of your bond you will take on all the risks and responsibilities that come with the property

Know your legal rights and responsibilities

Make sure you know what your legal rights and responsibilities are when buying property. It will help you easily navigate the process and make sure that you aren’t taken advantage of. Remember, if you aren’t sure about anything get independent legal advice. Buying a home is an exciting time and needn’t be a stressful experience – especially if you understand the process.