“Caveat emptor” – Let the buyer beware! Seek legal advice before you sign any deed of sale or offer to purchase
With due acknowledgement to the Law Society of South Africa
If you find a house you wish to buy, before you sign any deed of sale (also sometimes referred to as an “offer to purchase”), read this article:
Buying a house
Buying a house is probably the biggest and most important investment you will ever make.
When you do find a house you wish to buy and before you sign any deed of sale (also sometimes referred to as an “offer to purchase”), follow these simple guidelines:
- Examine the house thoroughly. Enquire about the roof, gutters, electrical wiring, foundation etc. Should you have any doubst at all, consult an expert to examine the house. Should there be any defects, provide in the deed of sale for their correction by the seller at his cost.
- Before you sign a deed of sale, give the document to your attorney to examine. Ask about anything that is not clear.
- Enquire about any additional costs, such as rates and trasfer costs – your attorney will have the answers. Ensure that your finances are sound. Should you need a bond, also make provision for the costs or valuation of the property and of registration – once again your attorney can tell you about this.
Furthermore, ensure that you can afford the monthly bond payment.
- If you are not certain whether you will be able to obtain a loan to provide for the purchase price and / or other costs, make the sale subject to the obtaining of a loan.
- Ensure that the deed of sale provides for the issue of a beetlefree certificate at the expense of the seller in the Cape Province and Natal, and for a certificate of compliance in respect of the electrical installation.
- Does the seller require a depost on the selling price? Should this be the case, arrange for payment in trust to any attorney pending transfer and for safekeeping in a special savings account until the house is in your name. With the consent of both parties the attorney may invest these monies subject to the condition that the interest earned will be for your own account.
- Take note of the date of occupation in the deed of sale. Should you move in before the house is in your name, you would be expected to pay rent. Make sure who is responsible for the payment of taxes, levies and insurance premiums during this period. Should the sale fall through after you have moved in, you would naturally have to move out again with the attendant expense and inconvenience.
Selling your house
Should you be planning to sell your most important investment, do not lose the money earned by this investment by not knowing about the legal aspects involved.
Once again, follow these easy guidelines:
- Keep your house and the premises neat and clean so that it is attractive to prospective buyers.
- Consult your attorney concerning your rights and obligations.
- Approach one or more estate agents of your choice to list your property. Do not give sole rights to sell the property to one agency without considering it very carefully. Your attorney will be able to inform you about this.
- Should you instruct more than one estate agent, consult your attorney before you sign an offer to purchase or a deed of sale. If the property was introduced to the purchaser by more than one agent you would be liable for double sales commission.
- When you find a buyer, do not sign any offer or deed of sale before your attorney has examined the document.
- Before you sign, find out what commission is payable to the estate agent and whether VAT is included.
- Give the estate agent the name of your attorney – your attorney will deal with the legal aspects and ensure that the house is transferred to the buyer. He will also organise the finances and ensure that you receive your money.
- Make sure that the date on which the purchaser takes possession and occupation suits your own arrangements.
- The following is a list of the most important requirements that should be met in a deed of sale – however, it should be noted that this list is not complete. Each transaction has its individual requirements. By the way, should you wish to do so, your attorney can draw up the deed of sale. Indicate in the deed of sale who will be responsible for the costs involved in the drawing of the sale.
- The names, identity numbers and marriage status (e.g. Married in or out of community of property) or capcity (when a company is involved) of the parties concerned, as well as the purchaser’s and the buyer’s address.
- The description and size of the property or stand as detailed in your deed of transfer.
- The provision that the buyer pays all transfer fees.
- The name of your attorney handling the transfer
- The date of taking possession and occupation.
- The provision that the buyer is responsible for all taxes and other municipal charges from the day of taking possession.
- The provision that the house is sold “as is” (in other words without any guarantee on your part regarding visible or hidden faults).
- The amount of commission due, the time of payment and the name of the estate agent.
- Should the date of occupancy be before the date of transfer, ensure that the buyer pays interest on the sale figure or rent until the date of transfer. The amount and manner of payment must be stipulated.
- The fact that no change to the deed of sale is valid unless put in writing and signed by both parties.
- Whether a beetle-free certificate should be obtained (Cape Province and Natal) and if so who should pay for the inspection and any work required.
- Any special conditions, for example:
- Listing any articles excluded from the sale
- Whether the sale is subject to the buyer obtaining a bond or the sale of the buyer’s house. Your attorney can advise you with regard to these conditions. A special deed of sale should be drawn up should the buyer wish to pay off the selling price over an extended period of time. This is a relatively complex issue which also holds certain risks and you are strongly urged to allow your attorney to draw up the deed of sale.
- Ensure that the address given for the service of notices and process is an address where these items will reach you
