Guideline for Sellers

1. If you do not know what your property is worth you should consult a local estate agent for the suggested asking price.  The Municipal value and the history of selling prices of similar properties in the area will also give you some idea.  You need to consider the balance owing to your bank and other charges owing against the property to ensure that the sale proceeds will be sufficient to settle these debts.

 

2.   You can appoint an estate agent with a mandate to find a buyer for your property, or you can try and find a buyer privately.  An estate agent will be entitled to commission if the agent is the effective cause of a sale.  Commission rates may vary, but the standard is about 7% of the sale price, plus VAT.  There are various types of mandates and it will be wise to consult your attorney to settle the terms of the mandate before you sign it. 

 

3.   Have a copy of your title deed available.  If you do not have it then the bank as the bondholder will let you have a copy, or you can approach your attorney to order you a copy from the Deeds Office.

 

4.  By law the sale contract must be in a written agreement signed by or on behalf of both the seller and the buyer.  The written agreement is usually in the estate agent’s pre-prepared form, or it can be prepared by an attorney.

 

5.  It will be wise to ask your attorney to consider any offer which you receive from a potential buyer before you sign it.  Your attorney can also be instructed to prepare a sale agreement if you sell privately.

 

6.  It is common for offers to contain “subject to” or “suspensive” conditions, for example that the buyer must be granted a loan for all or a part of the purchase price, or that the purchase price is to be funded from the sale proceeds of the buyer’s property.  These clauses often give rise to disputes, so it is important that they be carefully crafted.

 

7.  The conveyancing process begins once the sale agreement has been signed and the suspensive conditions in the agreement have been met.

 

8.   The costs which you as seller will have to bear on a successful sale will include:

 

8.1.     The amount to settle the mortgage loan over the property and cancelation costs of the mortgage bond/s;

8.2.      The estate agent’s commission;

8.3.     The municipal rates and other municipal charges up to the transfer date;

8.4.      The charges of the entomologist for the inspection report and for treatment of termites and wood-destroying insects;

8.5.      The charges of an electrical contractor to issue a Compliance Certificate including the cost of any repairs which might be necessary;

8.6.      Similar costs relating to any gas installation on the property;

8.7.      Surveyor’s costs for locating boundary beacons, if necessary;

8.8.      The cost of preparing and submitting the missing or revised building plans;

8.9.     Provision for Capital Gains Tax if the property is of high value and being sold at a taxable capital profit.

           Most of the above costs and charges can usually be paid out of the sale proceeds. 

 9.   The seller usually appoints a specially qualified property attorney called a conveyancer, to implement the sale once a sale agreement has been signed.  The conveyancer will manage the paperwork involved from the time the sale agreement is signed and will administer the financial aspects of the transaction.  The conveyancer is required to collaborate with the seller, the buyer and the banks so that the transfer of the property into the buyer’s name will occur simultaneously with the payment of the price, the cancellation of the seller’s mortgage loan and the registration of the buyer’s mortgage loan.  These transactions can become complicated if the sale is linked to the sale of the buyer’s property and other “down the line” transactions.