Just sold my property, now show me the money! Featured

Posted On Sunday, 04 November 2018 08:04 Published by
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Whether it be a commercial or residential property sale, every owner begins the anxious countdown to the months it takes to transfer the property to the new buyer and subsequently receive payment of their proceeds.

 PREVANCE-SOLD-

The indicative industry duration for a property transfer is 3 months. Given that some properties can stay on the market for 12 weeks on average, the owner may have to wait 6 months before receiving any payment.

Thokozane Magagula COO of Indlu Properties points out, “Having the right agent on your side to provide sound advice and professional guidance on the transfer process makes a major difference.”

In the case of a cash deal, only a transfer attorney is appointed by the seller. The buyer deposits the funds into the transferring attorney’s trust account to be kept in trust until transfer. 

If, however, the purchaser secured finance from a bank, then in addition to transfer attorney a bond registration attorney is instructed "to register a bond over the property as security for repayment of the purchaser’s loan to the bank", says Zahra Limalia of Limalia Attorneys.

Limalia explains, "The transferring attorney drives the process in conjunction with the purchaser’s bond registration attorney and the sellers bond cancellation attorney, to transfer the property into the name of the purchaser."

Factor in Fees

In every property sale there are fees to consider – attorneys fees, rates and taxes clearance figures, levy clearance figures, existing bond cancellation – which is where bridging finance comes in.

Christo Jonker, Sales and Marketing Manager at Prevance Capital explains, “Bridging finance advances the funds for the payment of arrears rates and taxes so that the seller can obtain a clearance certificate from the local municipality. It can also secure the next property purchase, pay for moving costs or even a holiday – as long as there is sufficient equity available on registration of the transfer.”
CHRISTO-JONKER-CEO-PREVANCE-

"Bridging finance is a unique tool to make the stress of a property sale a lot less stressful for a seller. 7 out of 10 sellers are not aware that this finance solution exist," Jonker affirms.

The seller at this stage can start seeing the money.

Everyone wins

Once rates, levy and other costs have been paid, clearance certificates received, proceed to lodge (if bond finance) given - the attorneys can now lodge the matter at the relevant deeds office.

Upon transfer of the property into the new buyer’s name, funds can now be paid out to the seller. The seller, in the Jerry Maguire movie speak, is now ‘the Master of Quan!’

Property transfers play an important role in the economy

Through a property transfer the seller unlocks the funds in their property while the buyer invests in an asset and they stand to benefit from capital appreciation and sometimes rental received. The economy benefits from capital gains tax, transfer duties, service fees levied, to name but a few. Visa versa versa, where the economy is stagnant or in recession, the property industry is most affected.

According to Jonker, although the market has been under strain for the past 2 years and the oversupply of stock in a number of key areas has created a ‘buyers’ market’, there is every reason to be optimistic.

Mduduzi Ngwenya, Business Development Executive at Prevance Capital adds that due to the resilient nature of property, “owners are likely to ride out the recession, while seasoned developers will continue to make money in this environment.” With that in mind, Prevance has allocated additional funds towards assisting developers to kickstart and complete developments.

By collaborating with a good agent and pricing their property correctly, informed sellers will continue to sell in tough environments and rapidly ‘see the money’.

For more information on Development and Bridging Finance visit www.prevance.co.za 

Last modified on Friday, 09 November 2018 14:36

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