First-time buyers – a little patience required

First-time buyers continue to dominate the residential market, as young couples and newly-weds take the plunge into family life. In fact, mortgage originator ooba reports that in June 51.7% of its bond applications were from first-time buyers.

Most analysts consider that first-time buying is a good indication of market conditions and, given this segment’s high dependence on credit, whether bonds are easier to obtain – or otherwise. According to a survey by FNB, in the second quarter of this year, first-timers were estimated to make up 22% of total buying.

In recent years, as the residential market gradually recovers from the slump, many young buyers have been forced to wait, remaining in their parents’ homes or renting. Now they are returning to the market as a significant force. However, for the starry-eyed, eager to set up that dream home, a little patience is required. Delays in the process of finding and owning that first property can be more than a little frustrating.

Conveyancing attorneys STBB issued a caution in June that the turnaround in the Cape Town Deeds Office had slowed considerably, with transfers taking 15 days and more to register.

Similar delays are being experienced countrywide. Mortgage bonds, too, take their time. In fact, according to ooba’s statistics, it takes an average of 69 days for a bond to go from being granted to being registered.

According to Careen McKinon, ooba’s direct sales manager,

“buying a home is one of the most exciting but daunting things you’ll ever do. There is so much paperwork and communication between various intermediaries. However, the good news is that you’ll have lawyers acting on your behalf so all you really have to do is wait.”

A step by step guide

> You and the seller sign the offer to purchase

> The bank grants your bond and instructs the attorney to register it.

> The seller advises the transferring attorney to transfer the property. The title deed and cancellation figures are requested by the bank where the current bond is held and a statement of rates and taxes is requested from the local authority.

> The bond attorney tells the transferring attorney the amount available for guarantees and requests the draft deed of transfer and guarantee requirements.

> The cancellation attorney is asked to cancel the seller’s bond upon receipt of a guarantee for the amount owing.

> The transferring attorney receives the title deed and cancellation figures and sends a copy of the deed of transfer and the guarantee requirements to the bond attorney. The transferring attorney requests the buyer and seller to sign the transfer documents. The buyer pays the transfer costs and the transferring attorney then pays the rates and taxes and the transfer duty.

> The bond attorney prepares the bond documentation together with the relevant account. The buyer signs the document and pays the costs. The bond attorney prepares and issues the necessary guarantees, forwards them to the transferring attorney and prepares the bond documents for lodgement at the Deeds Office.

> Once the transferring attorney has received the guarantees, they are forwarded to the cancellation attorney.

> The cancellation attorney obtains consent for cancellation from the bank which holds the seller’s bond.

> After all the documentation has been signed and the costs paid, the transfer, new bond and cancellation bond documents are prepared by the respective attorneys for lodgement at the Deeds Office,

> All documents lodged, the Deeds Office checks the documents. This can take up to three weeks before they are ready for registration simultaneously by the attorneys.

> On the day of registration, the bank pays out the loan in accordance with the guarantees issued.Final word from Careen McKinon: “Allow at least three months for the registration and transfer of the bond.”