How does the property transfer process work?

Author
MyProperty
South Africa's #1 independent property portal

The basic steps of how the property transfer process works are:

OTP and home loan application

The first step in the process happens when the buyer signs an offer to purchase (OTP) and applies for a home loan. In South Africa, digital signatures are not yet accepted, and these documents will need to be signed in ink. Once the buyer has been approved for the home loan, the seller’s real estate agent sends the sale agreement to the transferring attorney. The seller usually appoints the transfer attorneys (who normally come recommended by the seller’s real estate professional).

Bond registration process for the buyer

If the buyer is purchasing the property with aid of a bond, then a bond attorney will be appointed as well. The bond financier will appoint the buyers bond attorney, who will contact the buyer once they have received the instruction to attend to the registration of the bond. At this point in the process, the buyer will need to sign bond registration documents with the bond attorney. The bond attorneys will provide the buyer with a statement of accounts for the registration of the bond.

Note: The bond process and the transfer process run concurrently and independently. So, at the same time, the attorneys are doing their respective processes to help both the buyer and the seller complete their necessary steps.

Transfer costs

The buyer will have to pay transfer costs, which includes transfer duty if it is payable. Transfer duty is tax buyers pay to SARS over and above the purchase price based on the value of the property (visit the SARS website to find a full breakdown of these costs). In the initial stages of the transfer process, you will receive a proforma account with the estimated costs until the actual costs are available. These costs may vary as a portion of the costs are determined by the registration date. Costs that will be on the pro forma account include property transfer costs, deeds office fees, post and petties, FICA, and other fees. You can get an online estimated calculation of these costs beforehand by visiting the BetterBond website. The proforma statement will be provided to the buyer when they meet with the transfer attorney to sign their transfer documents.

Acquiring a Rates Clearance Certificate

The transferring attorney will also need to request a Rates Clearance Certificate, which is proof that all the outstanding debt on the property’s rates and taxes has been paid, from the local authority. This is necessary because the transfer of a property can only take place once these costs have been settled and the certificate has been issued. The seller may need to pay a few months rates in advance to obtain the certificate. The Rates Clearance Certificate is valid for 60 days.

Cancelling the seller’s existing home loan

If the seller has an existing bond, which is usually the case, the attorney will need to contact the seller’s bank and request the original title deed and cancellation figures. The cancellation figures consist of the outstanding home loan balance, one month’s instalment, monthly service fees, early termination charges, and other figures, which vary depending on personal circumstances. The cancellation attorney, who is appointed by the existing bondholder (i.e. the bank through which you took out your home loan), will then acquire the title deed so that the next step in the transfer process can take place.

Signing the required documentation

The buyer and seller will both be required to meet the transfer attorney to sign their respective transfer documents, as explained above. If the buyer is taking out a bond, then he/she will be required to meet the bond attorney to sign the bond registration documents. When meeting either of these attorneys, it is imperative to bring the necessary FICA compliant documentation to the consultation. These documents include proof of address (not older than three months), your original identity document, income tax number and marriage certificate if applicable.

Registration at the Deeds Office process

Once all the paperwork is signed and payments have been made, the cancellation, transfer and bond attorney work together to ensure that all the documents are lodged simultaneously at the Deeds Office. In the Deeds Office, there are three levels of examination that the documents must go through before transfer of the property, cancellation of the existing bond and registration of the new bond can be registered. This process usually takes 10 to 15 working days. Once the documents have gone through all three levels of examination successfully, the attorneys will receive notification that the process can continue to registration. Once registered, the buyer will finally be the owner of the home and the seller will be paid the net proceeds. The transferring attorney will send the original title deed to the buyer’s bank. If, however, the buyer doesn’t have a bond, the title deed will be sent directly to the buyer.

Property questions?
Get quick answers about buying, selling, renting, and more from our AI powered real estate bot
General Property News
Here are the top South African property markets you should invest in next year
Market & Opinion
Here are the top South African property markets you should invest in next year
17 Dec 2024
After a second, very welcome, drop in the interest rate and inflation’s sharp upward trajectory seemingly curbed, investor sentiment is cautiously optimistic, and South Africans are once again looking to invest rather than divest with many turning to real estate which is traditionally regarded as one of the most stable investment options.
read more
How to successfully sell your home over the December holidays
Market & Opinion
How to successfully sell your home over the December holidays
12 Dec 2024
Are you thinking of selling your home during the December holidays? While the festive season brings unique challenges—like buyers being on vacation or companies closing—you can still turn this into an opportunity. With careful planning and the right strategies, you can attract motivated buyers looking to close before the new year.
read more
South Africa’s Rental Market in Q3 2024: Growth, Affordability, and Provincial Trends
Market & Opinion
South Africa’s Rental Market in Q3 2024: Growth, Affordability, and Provincial Trends
04 Dec 2024
outh Africa’s rental market saw robust growth in Q3 2024, with average rents increasing to R8,856 and tenant affordability improving. For the first time since early 2023, tenants spent less than 30% of their income on rent, thanks to rising disposable incomes and easing debt pressures. The Western Cape led provincial growth at 9.3%, while Gauteng experienced slower growth at 3.1%. Lower inflation and interest rate cuts are expected to further strengthen tenant finances and support sustainable rental market growth.
read more
Should you sell your home? Key factors every homeowner needs to consider
Market & Opinion
Should you sell your home? Key factors every homeowner needs to consider
28 Nov 2024
Making the decision to sell your home is never easy. Whether you're motivated by life changes, financial opportunities, or a shifting real estate market, it’s essential to weigh all factors carefully before taking the leap.
read more
Real Estate Tools
Get pre-qualified
Make offers with confidence knowing what you can afford. Then shop for the best home loan
Bond Calculator
Calculate the estimated repayments on a home loan and savings with extra payments