by admin | Jun 11, 2014 | Featured Articles, Home ownership
The most common types of properties sold in South Africa are freehold and sectional title but could be a 99 year leasehold or share block. The most common uses of 99 year leases and shareblock are for holiday type properties where there are multiple owners per home or the property is situated in a reserve where the land is leased from a Government body like National parks.
Freehold
Freehold means that you own the land and everything on the land. The only requirement is that you have to pay rates and taxes to the municipality according to the value of the land and buildings. The ownership papers are in the form of a Title deed.
Sectional title
The properties that fall under this section are usually flats and townhouses where there is common property like a clubhouse, swimming poll and gardens for everyone’s use. This means that you own only the inside of the house up till the ceiling. The body corporate (which are made up of all the owners of the individual units), owns everything on the outside of the house as well as the land on which the house is built. They also own the boundary walls, the roof and all the outbuildings on the land which are referred to as common property.
The body corporate charges the individual section owners the expenses in the form of a levy. These expenses include municipal rates, the insurance of the building complex, all repairs and maintenance done, communal water and electricity bills as well as accounting fees. These are just to name a few. So not only do you have to budget for your home-loan repayments you also have to budget for the monthly levy. As from July 2008 all sectional title units will be charged separately and you will receive your own account from the local municipality.
Before you decide to buy into the sectional title complex, make sure you get the latest financial statements from the body corporate to make sure that it will be a financially sound investment and that there are no debts to be covered. As an owner in the sectional title scheme you are responsible for a portion of that debt/forthcoming expense. If it has not been adequately catered for a special levy will be needed to cover the expense/debt. Always ask the question “has a special levy ever been imposed and if so, what was it for?” Also make sure that the house rules being enforced by the body corporate are reasonable and in line with your expectations.
99 Year leasehold
The home owner of this type of home ownership will never own the land. The land is only leased to the home owner for a period of 99 years. If you decide to buy the house from and existing owner and the real owner is not government or a municipality, you only buy what is left in years on the lease. If the land is owned by the government the 99 year lease period will begin afresh with every new change of ownership. The land will remain the property of the municipality or government but often comes with an optional renewal.
Share block
This form of property ownership applies to a small number of blocks of flats/townhouses and was a method of selling property adopted by the Timeshare industry where there are up to 104(weeknd ownership and midweek ownership) owners per unit. Here the property is registered on the name of a company. Once you purchase a flat you become a shareholder in the company and are then entitled to occupy a particular unit (flat). The proof of ownership is then a share certificate instead of a title deed. As in the case of the sectional title, the expenses of the share block company will be divided among the shareholders. To make sure that this is a financially sound investment get an accountant to check the latest financial accounts before you decide to buy into a share block. But be warned that no bank or financial institution will grant a mortgage loan when the property is held through a share block scheme, developers often finance the loans in-house at higher than normal interest rates.
by admin | Jun 5, 2014 | Bond application, Featured Articles, Home loans, Home ownership
Selling your property involves yourself, the buyer, the bank and various attorneys. Understanding the process will make it less stressful for you and give you the opportunity to prepare all the required documents to speed up the process and have the necessary cash available when required. (yes, it does cost you money upfront to sell your property)
Before you put your property on the market, please check the home staging article to ensure you get the best possible price.
The Selling process
Offer to Purchase
Once a buyer has signed an offer to purchase, in most cases it will be subject to a bond being granted by a bank, the buyer needs to apply for a bond with his bank or a bond originator.
Approval
Once the bond is approved the bank will advise the bond attorney to register the bond.
Transfer
You the seller will then advise the transferring attorneys to begin transfer of the property. The bank will then provide the transfer attorney with the title deed and the settlement figures if there is still a bond over the property. The transferring attorney requests a statement of rates and taxes from the local municipality. The local municipality will provide a figure which is approximately three months of your average rates and taxes which will need to be paid by you before the transfer can proceed. The bond and transfer attorneys correspond regarding the guarantees which stipulate the guarantee requirements for the draft deed.
Settlement
A guarantee from the bank is sent to the attorneys who will prepare to cancel the bond over the property once the guarantee has been received.
Legal
The transferring attorney will ask the buyer and the seller to come and sign the transfer documents. Once the buyer has paid the transfer costs, the transferring attorney then pays the rates and taxes as well as the transfer duty fees. Once this is done a bond attorney will then prepare all the documents for the bond together with the relevant account. Once all the documents have been prepared the buyer will sign them and pay the costs. Thereafter the bond attorney will prepare and issue the necessary guarantees and have them forwarded to the transferring attorney who will prepare the bond documents for the lodgement in the deeds office. Once the transferring attorney has received the guarantees, they will then be forwarded to the cancellation attorney. The cancellation attorney will get the consent for the cancellation from the bank which holds the sellers bond. When all the documents have been signed and all costs have been paid the transfer, the new bond and the cancellation bond documents are prepared by the respective attorneys for the lodgement in the deeds office. As per the agreement between the deeds office and the attorneys concerned all the documents are lodged. It usually takes about 2-3 weeks for the deeds office to check the documents before they are ready for registration by the attorneys on the same day.
The entire process can take up to three months in the absence of any hiccups.
How to avoid delay in your property transfer
All personal information of the seller and / or buyer must be provided
The seller must provide the details of the bank holding the existing bond.
The bond holder must provide the cancellation figures and the title deeds to the transferring attorney. (The seller can get involved to ensure it is dome speedily)
You must have the rates figures (local authority) and/or the clearance certificate (transferring attorney).
The buyer must pay the deposit timeously in terms of the agreement (if required).
All guarantees to be provided.
The buyer must pay the bond and transfer costs on time.
The seller must not delay in signing the transfer documents.
The buyer must not delay obtaining government capital subsidy approval or employee subsidy documents for new bondholders, and with any other requirements the bank might need.
The buyer must not delay in signing the transfer and/or bond documentation.
Try to have one attorney to handle all of the requirements.
by admin | May 20, 2014 | Home ownership
Eldo Meadows is a fantastic Lifestyle Estate situated in Centurion. The Development was first established in 2005 and has since enjoyed tremendous growth. Opportunities for investors and residents are numerous with good solid rental performance in the area.
Eldo Meadows is a beautiful, secure estate which offers a lifestyle that few can resist.
Features of Eldo Meadows Estate
24hr Security
Access controlled entrance
Clubhouse
Squash Court
Tennis Court
Swimming Pool
Communal Parks
Property for sale or to Let in Eldo Meadows
Property Prices in Eldo Meadows Range from R2.9 Million to R6.0 Million (2014 – survey)
Vacant Land in Eldo Meadows is priced at around R620 000 to R700 000 with stands that range from 500 sqm to 1000 sqm.
Go to Eldo Meadows >>
by admin | Aug 3, 2012 | Debt management, Featured Articles, Home ownership
By law you are required to take out Life Insurance to cover the amount of your home loan and in most cases people simply accept the Insurance that is offered to them by the Bank.
It is your choice which Insurance company you use to cover your life and in almost every instance the cost of your Life Insurance will be significantly cheaper than the policy your bank offers you.
Using an Insurance comparison service gives you the opportunity to compare insurance quotes from South Africa’s largest insurance companies and get a much better premium than simply accepting the first premium you are offered. The simple fact is that Insurance companies are businesses just like banks, supermarkets or any other business that rely on you as a customer to grow their business.
Use your power as a customer to negotiate the very cheapest life insurance for your home by using a home insurance comparison service. This achieves 2 things, 1. you will be getting the cheapest possible life Insurance and 2. You will not be wasting time calling around to get insurance quotes from all of the Life Insurance companies to compare and then negotiate, this could take days!
If you are able to save just R100 per month on your life Insurance to cover your home loan and put that amount back into your home loan to reduce the capital amount of the loan, this will reduce the amount of interest that you will end up paying over a 20 year period very significantly. Try it, use the home loan calculator to see what a difference a R100/month additional payment into your home loan will do to your interest payment.
Home loan Calculator
Right, now that you calculated the enormous saving such a small amount will make, get the Insurance comparison people working to find you the cheapest Life Insurance to cover your home loan, cancel your existing Life Insurance from your bank and put that money to work paying off your home loan.
Home Loan Life Insurance Quotes
by admin | Aug 3, 2012 | Bond application, Featured Articles, Home ownership
A first time home buyers loan is a big step for most new home owners and as a new lender, the banks will compete for your loan providing you are able to show them that you are not a bad risk.
We must never forget that every bank is competing for market share and as a prospective new customer for them, they will earn interest on the first time home buyers loan that they offer to you. The next step for the banks once they have you as a customer is to upsell you into the other products that they have to offer like cheque accounts, investment accounts, personal loans and other banking services. They also now have access to your spouse or children through your account by offering reduced fees to spouses or study loans to your children.
Bear this in mind when making an application for a first time home buyers loan and never accept the interest rate that they first offer you. The fact that the bank approves your first time home buyers loan means that they want you as a customer and this puts you in a position to negotiate the interest rate. A home loan is a long term loan that attracts a huge amount of interest over the years and even a 0.5% reduction in the interest rate will see you saving a lot of money over the period of the first time home buyers loan.
Use the home loan calculator to see what you will save if you are able to negotiate a reduction in your interest rate.
With Interest rates at their lowest in decades in South Africa it opens up the market to more and more first time home buyers whose income now allows them to loan more than in previous years. First time home buyers often qualify for 100% home loans in particular on government subsidised projects but on many other projects where the developers have consulted with the banks on the valuation of the property and constructed their pricing accordingly.
Banks are more and more risk averse but with developers realising that they cannot simply work on a return basis when pricing properties, they understand that if they consult with the banks and make it easy for first time home buyers to loan from the banks they will sell out their development a lot quicker.
by admin | Nov 3, 2011 | Featured Articles, Home ownership
It is possible to set up a budget plan to attain your financial goals be it to budget for a renovation, budget for the deposit on your new home or for a luxury purchase but it does need a plan and when adhered to rewards you with what you want. The best part about starting out with a budget plan is that once you have started you will begin to budget and save for a better life overall. Budgeting and finding ways of saving is an achievement in itself, the fruits of your savings and the personal satisfaction that go with attaining your desires is priceless.
Here are 4 easy steps to achieve financial success:
- List your financial goals: This can be done on a sheet of paper or on an Excel spread sheet. Take your time to think about your desires for example: Saving money to put down a deposit on a home loan. Saving money to further your education or save for a holiday. Long term and short term goals are necessary to start a budget plan.
- Salary & Expenditure: How much do you earn after tax? Determine your exact pay you take home each month. Do not include extras such as bonuses or overtime. Then write down the total fixed expenses, such as rent, vehicle payments, Medical Aid, Student loans. Then make a list of variable expenses, such as groceries, clothing and entertainment.
- Determine your budget & savings: After you have analysed your income and expenditure, allocate an amount to spend on each item. Fixed expenses stay the same so you will know exactly how much to put aside for rent and medical payments. Groceries vary so you could give an estimate of how much to spend on food each day. Set a budget for entertainment as well; people tend to overspend when they socialize. Allocate a set amount for savings each month; generally an estimated amount of 10% of your monthly salary should be saved.
- Budget evaluation: Monitor your spending and check that your spending corresponds with your budget plan. Keep your slips and check if you are sticking to your limit. Adjust your spending accordingly and remember to save for a rainy day.
Keep your long term and short term goals visible to see each day. It will remind you of the reason you are setting money aside. A budget plan is in place to attain your financial goals and therefore it is necessary to stay responsible and disciplined in pursuit of your dreams.
Many people have attained success by keeping to their daily budget and reinforcing their future endeavours. Impulse purchases are common and majority of people live above their mean, in essence you should not spend more than you earn. Set a budget aside for the amount you spend on your credit card; it is easy to slip up and sabotage your financial plan. A home is your most treasured asset, plan to own a home and live the dream.
