Home Seller FAQ Guide

– The introduction of the new SPLUMA certificate is to ensure that the zoning of the property matches the land use and to determine that all the buildings on the premises are in accordance with approved building plans which should be filed at the municipality.

In order to obtain a SPLUMA certificate from the local municipality, a seller should have the following in place:

• An affidavit signed by the seller and filed at the municipality with an application wherein the owner states that the relevant plans pertaining to the property are in order, accurate, and have been filed with the local municipality.
• All rates and taxes and any other funds pertaining to the property must be paid up to date.
• Building plans for all buildings (including the swimming pool and lapa) need to be approved and submitted. Should these plans not be compliant, the seller will need to appoint an architect or draughtsman to prepare the plans for lodgement with the municipality.
• The use of the property needs to be in accordance with municipal zoning.
• There should be no encroachments over the building lines and property boundaries.

This can be a time-consuming process – taking up to three months or more – and thus it is advisable to start as soon as the property is listed.

– A public auction or sales in execution relates to distressed properties that are taking too long to sell traditionally.

If the sale is taking too long, the bank may decide to move things along with a public auction. The bank will obtain approval from the High Court to proceed.

Rather than holding out for the best price, these sales aim to recover the outstanding debt owed to the bank and any associated costs in the quickest way possible. For this reason, an addition to Rule 46 by the High Court was made which, in short, makes the process more difficult for banks to go the route of a sale in execution and encourages them rather to place the property on their distressed programmes.

Keep in mind that buyers might be liable for any outstanding rates and taxes on the property. Be sure to read the fine print carefully before signing the purchasing agreement.

– A property auction is when a property is sold to the highest bidder – this can be done on-site or at an online auction event.

Keep in mind that there are different types of auctions, namely:

• A voluntary auction is where the seller has freely decided to put the property on auction, hoping to get the best deal by playing buyers against each other in a live venue or online.
• A bank auction is organised by the bank, usually on behalf of a seller who is in arrears with his or her bond. This type of auction benefits the buyer as the property is sold at a reduced price, and the rates and taxes are handled by the seller.
• A sheriff’s auction occurs when the bank is unable to recover the funds from the current bond holder, and instead applies to the court to auction the property. This is usually the best source of value for buyers as the properties are sold at a significant discount, sometimes up to around 50% of the property’s value.

If you want to buy a property on auction make sure that you are prequalified, that you have finances ready as the payment of the deposit is usually required immediately, in cash, after the winning bid and the auctioneer also requires a commission payment worked out as a percentage of the auction price. It is also advisable that you read the conditions of the sale carefully.

Here are some common auction myths we debunked

– Whilst the Seller is not legally obligated to disclose obvious or known defects (patent), the Seller does have a duty to disclose all defects which are not obvious (latent) which he/she is aware of. Should the Seller purposefully hide or cause any defect to be hidden, the Seller will not enjoy the protection under the voetstoots clause.

– The following items will be deducted from the seller’s proceeds of sale on registration:

• Current outstanding bond amount (cancellation figures)
• Bond cancellation costs
• Estate agent’s commission

The following items will generally have to be paid by the Seller during the course of the transfer process and cannot be deducted from the proceeds, unless specific arrangements are made:

• Rates clearance figures and certificate fees
• Levy clearance figures and certificate fees
• Costs associated with the issuing of compliance certificates (electrical, electric fence, gas, plumbing and entomology)

– The commission charged by estate agents varies and is usually based on a percentage of the sale price. However, the national average can range from 5 to 7.5 percent plus Value Added Tax (VAT). The commission can be negotiated, but it is also important to remember that agents put a lot of time and money into listing and marketing the property to ensure a sale that will ultimately see them receive their commission.

Some agents have a fixed fee payment structure where the commission is fixed at a certain price or a certain percentage irrespective of the sale price.

The agent’s commission is paid by the seller after the successful sale of a property – this means that all the conditions of the sale have been met and the property has been transferred to the buyer. Keep in mind that if a prospective buyer refuses to go ahead with the purchase, but change their mind later and purchase the home, the estate agent who played a role in attracting that buyer in the first place will be entitled to a commission, even if they didn’t play a role in bringing about the eventual agreement.

You can work out your estate agent’s commission using our commission tool

– When you get ready to sell your home for the first time, you might be faced with whether you want to sell your home with a sole or open mandate

So what is the difference between a sole and open mandate?

A sole mandate is a written agreement giving one agency exclusive rights to market and sell your property. The agreement should include the length of time that the mandate is granted for, the selling price, the commission rate, and any other terms and conditions.

As a seller, you can appoint another agent once the sole mandate has lapsed.

An open mandate allows a home to be marketed by more than one agency or estate agent at a time. When you opt for an open mandate the estate agent that closes the deal is the agent that receives the commission. While you do not need to have an open mandate in writing, it is still recommended so that everyone involved is in agreement.

What to keep in mind when choosing a mandate

• While many buyers believe that having multiple agents, will ensure a faster sale this is not always the case. With increased agents, comes increased viewers and increased hassle. With a sole mandate, you only deal with one agent and the potential buyers they show the property to.
• When agents compete against one another to close a sale, you might find yourself under pressure to accept a lower offer or lose the sale. Because all offers are directed through a single agent under a sole mandate, your agent will be able to negotiate the best possible offer for your property.
• An open mandate also opens the seller up to potentially paying double the commission because multiple agents can claim that they were the ”effective cause” of the sale.

How to choose the right agency for your sole mandate

• Choose an agency with a good track record in your neighbourhood;
• Check that your agent and agency have valid Fidelity Fund Certificates;
• Request a property valuation, and make sure it has supporting research;
• Ask about the agency’s marketing approach;

– While sectional title schemes are meant to have reserve funds in place to deal with maintenance and repairs, there might still be instances (emergencies) where a special levy has had to be raised, but what happens if an owner couldn’t afford to pay a lump sum, is paying it off in instalments, and he sells his unit? Who is responsible for the remaining special levy instalments?

The Sectional Titles Management Act is clear with regards to special levies and the collection thereof and it is only by mutual agreement between the buyer, seller and body corporate that these provisions can be adjusted.

The STSMA caters for special levies in Section 3 (3) and provides that “Any special contribution becomes due on the passing of a resolution in this regard by the trustees of the body corporate levying such contribution” and goes further to say that, “Provided that upon the change of ownership of a unit the successor in title becomes liable for the pro-rata payment of such contributions from the date of change of such ownership.”

Where an instalment plan is in place, the seller must make the estate agent and the potential buyer aware that the new owner will become responsible for the pro rata special levy instalments – from the date that the buyer takes transfer. Provision should be made in the sale agreement to formalise the acceptance of the responsibility of the special levy instalments from the date that the new owner takes occupation.

An easy example of how a special levy would be pro-rated, is if a unit is sold on the 1st October, with a special levy resolution passed on the 2nd of October, payable in 12 equal monthly instalments starting on the 1st November. If the transfer of the unit is to take place on the 1st January, then the new owner will take over payments of the special levy on that date – which means he pays 10 of the 12 instalments as the original owner would have paid two of the instalments by that stage.

Sale agreements of sectional title properties tend to stipulate that the purchaser becomes liable for special levies once transfer takes place and, as mentioned, it is only by mutual agreement between the buyer, seller and body corporate that this condition can change. It is simpler to stick to the standard way of doing things, and not deviate with complicated alterations to payment plans.

– Sellers are sometimes confronted with an uneasy situation where more than one buyer is interested in their property.

The following questions have to be considered:

1. Has the Seller accepted an offer subject to suspensive conditions. If yes, then ask:

1.1 Has the Buyer on the initial offer complied with the suspensive conditions of the Offer to Purchase such as securing a bond. If yes, then no further offer may be taken but if no, then ask:

2. Do the terms of the agreement allow for continued marketing and a competing offer to be taken?

2.1 If yes, the Seller can take a competing offer, which allows for the Competing Buyer to fulfil their suspensive conditions. Once done, notice has to be given to the initial Buyer to fulfil or waive their suspensive conditions within the timeframe specified, failing which, the Seller has the option to proceed with the Competing Buyer.

Once the buyer has obtained a bond and fulfilled any other suspensive condition, the Seller won’t be able to sell the property to anybody else. The Offer to Purchase is then binding upon the Parties.

By Nathan Van Zyl from Kruger Attorneys & Conveyancers Inc

– Anything that’s attached to the house is something you’ll need to leave behind for the buyer. This includes light fixtures, built-in shelving units, blinds, door hardware, and more. If there’s something specific you don’t want included in the sale, make sure you bring it up during negotiations. You’ll need to note it in your sales contract. 

• It is understandable that during the current climate, opening your home to strangers might seem like a daunting task. However, home viewings are still a great marketing tool and will go a long way to sell your property quicker.

  There are various ways in which your agent can help you to still show your property without ever having an open house. Ask your agent about virtual tours and 3D tours that will allow your property to be toured without having an open house.

– The cost of selling your home is dependent on various and individual circumstances. It can also depend on what type of agency you use – traditional, hybrid or online agency as each has their own payment and fee structure.

However, there are some standard costs that you will come across during the process and that you will need to budget for. These include, but is not limited to:

• real estate commission fee
• inspection fees
• obtaining all the relevant compliance certificates
• bond administration fees

– This is another number which heavily depends on the home’s individual factors, but figures about similar properties in the local area can easily be sourced online and used as a guide.

Just keep in mind that an estate agent will be able to correctly price your property based on comparative market reports and years of experience. A correctly priced property will also sell much faster than one that is priced wrongly.

The golden rule is to always ask your estate agent how they came to your valuation and the highest price isn’t always the best one.

– Many times, homebuyers want a “move-in ready” property — one that doesn’t require much work and elbow grease before moving in.

For this reason, you may want to consider making some repairs before putting your home on the market. Smaller, cosmetic repairs can be a good idea to make your home more marketable (and more valuable). On bigger, known issues, like a damaged roof, you have two options: make the repairs and foot the bill yourself, or adjust your price accordingly. Most buyers won’t pay top-price if they know there are big, expensive projects waiting in the wings.

Get a home inspection done by an accredited inspector before listing to ensure you have picked up any defects that might need your attention

– While not required, getting a home inspector to inspect your property before you list it could be beneficial.

Why you should get your inspected before listing

1. Buyers will see your home as a “open book’

If you get your home inspected before listing, it shows you are serious about selling your home and that you are willing to work with the buyers on closing the deal as quickly as possible. It will also show them that your asking price is set right as you are being upfront about the property. All of this can give potential buyers peace of mind and confidence.

2. It can save you money in the long run

As a seller you want to ensure that you sell your property as fast as possible, at the right price and with a inspection before listing you will get a heads-up if there are problems a potential buyer will likely want repaired. A home that is in the best possible condition will fetch a better asking price and potential buyers looking for a move-in ready home will be more likely to make an offer.

Another benefit is that a pre-inspection will let buyers know about any repairs they will need to make and by disclosing all known issues upfront, you’re protecting yourself against claims the buyer might make later — which sometimes result in lawsuits.

If you leave the inspection up to the buyer and problems are uncovered during this stage, buyers might use this as an opportunity to negotiate a lower offer or they might even not want to go through with the sale.

3. It can highlight your home’s assets

An inspection might be able to give your home the competitive edge in a tough market. Upgrades and renovations might be a selling point between your home and a very similar home that still needs to be upgraded.

– Your home might not sell as quickly as you would like and this could be due to a number of reasons. The obvious and most important reason is that it might be overpriced. Correctly priced homes will sell much quicker than those that aren’t. You should compare your listing price to recent sales of comparable parties and adjust the number accordingly. You may also want to stage your home or make any repairs that could be holding buyers back from purchasing it.

If it’s been a long time, you may be able to switch real estate agents or sell a different way. Be sure you choose an agent with plenty of marketing know-how and local connections. This will help increase your home’s visibility and its chance of a profitable sale.

– During this time there are more Buyers than houses because the demand for property is greater than the supply.

– The Attorney who attends to the cancellation of the Seller’s bond and is appointed by the Bank with whom the current mortgage bond is held.

– In the case of a Multiple-listing (or MLS), you would normally give a certain estate agent the sole and exclusive mandate to sell your property for a certain period, after which this agent, the “listing agent”, lists the property with a computerised central service.

The information is then available to other participating agents who are free to sell your home. The selling agent and the listing agent are then in agreement that the agent’s commission is shared between them. You do not pay more agents’ commission. It remains the same amount agreed upon, but the agents share it between themselves.

– Home staging is the act of preparing a private residence for sale in the real estate marketplace. The goal of staging is to make a home appealing to the highest number of potential buyers, thereby selling a property more swiftly and for more money.