Offer to purchase question

If a house has electric fencing is it legal to sell the house without getting a COC for it?
 
azbob said:
Can one of the smart people do the calculations of what works out better between option (a) and (b).

Assume a R1.8m bond at prime minus 2%.

a) deposit R500 000 into access bond facility.
b) deposit R500 000 into savings account eg African bank at 11% over 5 years.
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That decision isn’t based on a calculation. It comes down to whether you think prime will increase to 13% within the next five years (unlikely, but we don’t know an exact probability - hence no calculation).

The other factor is tax, since your 11% from African Bank will break the tax free threshold, so your marginal tax rate comes into play.
 
3WA said:
That decision isn’t based on a calculation. It comes down to whether you think prime will increase to 13% within the next five years (unlikely, but we don’t know an exact probability - hence no calculation).

The other factor is tax, since your 11% from African Bank will break the tax free threshold, so your marginal tax rate comes into play.
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And if you married in property. And if you receive any other interest.

And is the loan facility used for rental or personal?
 
Aeryn23 said:
Complexes do have special levies at times. I used to own a flat in CT. We had a small special levy of about R200 for 12 months to pay for electric fencing around the complex boundry walls. Special levies generally come down to a vote at the AGM.
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Um, no they do not. The budget is approved at the AGM. Anything not budgeted for is subject to Special Levy, at the discretion of your trustees (which get voted in at the AGM).
 
azbob said:
Can one of the smart people do the calculations of what works out better between option (a) and (b).

Assume a R1.8m bond at prime minus 2%.

a) deposit R500 000 into access bond facility.
b) deposit R500 000 into savings account eg African bank at 11% over 5 years.
Click to expand...
Don't have to do any calculations, I'm not a 30%er
a) is the winner
You are welcome.

An even better return on investment is paying your first payment on a bond just one month (yes, just one (1) month) in advance. Many banks defer the first payment for about 25-45 days as a "deal sweetner". Never fall for this trick, it rakes many thousands of rands in for them, pay it immediately.
 
I have a bunch of questions as I am now seriously looking and ready to buy (assuming the bank is as well) . I can't remember if some of them I already asked and were answered as I bookmarked a 1000 posts and my inbox is a mess /facepalm

1. Chances of getting approval.

I work for myself (sole proprietor), last ±15 years freelancing. I don't have a registered company or entity (in SA) and just send a monthly invoice to the foreign company and then get paid. So the only proof of my income is my bank statements and the tax I pay (Provisional IRP6 + ITR12). Its super straightforward as I work from home / Internet. Will 2 or 3 years bank statements be good enough?

Credit score 670+ or 10/10 with Absa.

Pre-approval looks great with Absa, but it does not require to submit any documents.

2. I see a house I like and want to buy. What will the very first email look like?

"Dear Agent, I would like to put in an offer for the property at 66 Viking Drive, Valhalla of RXKK subject to bond approval and a signed OTP by both parties. Please supply the OTP before 17:00 today."

Will they then send me an OTP?

3. How much time do you have to read through the OTP and sign? I will need time to go through the OTP, ask questions here, possibly send to my lawyer, this will probably take a day or two. Will they allow time for all of this or is it like the rental market, first signed, first served?

4. What are the common special points/clauses/conditions which should be added to the OTP?

a. Subject to bond approval and with a max. prime rate or prime minus + 105% loan.
b. Subject to approved up-to-date and current building plans of which a copy has been supplied to the buyer.
c. All rates and taxes are up to date and Owner(s) / Seller's responsibility.
d. Property is vacant on registration and there will be no tenants or other lease in place, otherwise this will invalidate the OTP, registration may not be delayed, and owner will be held liable for any damages, fees or legal proceedings.
e. Seller/Owner is responsible for insurance, rates & taxes (including water and electricity) and maintenance until the date of transfer. Whether the property is occupied by the seller, unoccupied, or even in the event of the purchaser taking occupation before transfer date and paying occupational rent.

5. (Complex) Any Complex or Estate specific clauses to OTP?


I'll have more questions later most probably.
 
RedViking said:
Will 2 or 3 years bank statements be good enough?
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I am sure that they will, in fact 3-6 months should be ample. It's always better to get approval in principle from one bank upfront though, that way you know how much you are able to spend, and you come across as a serious buyer vs a tyre kicker. A good agent will do this leg-work for you. Alternatively speak to a bank and find out what they want as proof of a going concern.
RedViking said:
What will the very first email look like?
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What email? You approach an agent / seller face to face. The offer presented to the agent /seller is a hard copy or in writing. If they do not want to accept it there and then, then you withdraw it physically out of their hands. If they need time to get legal eyes on it, make it subject to 24 hours max.
RedViking said:
Will they then send me an OTP?
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It is preferable to use your own OTP, download a free one from Legalwise and adapt it to your needs. If an agent is sticky they may insist that you use theirs, but you can delete or add to it and you do not have to accept what stands there.
RedViking said:
How much time do you have to read through the OTP and sign?
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It's a wierd question, you have all the time in the world. If you suspect a lot of rubbish in an agent's OTP you can always ask the agent to send you a copy of their standard OTP upfront, before you even decide on a place.
RedViking said:
4. What are the common special points/clauses/conditions which should be added to the OTP?
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Offer expires in 24 hours and subject to acceptance within same timeframe.
Offer is subject to transfer taking place within 6 months.
Amount to be paid for occupational rent
 
@RedViking other things to remember:

Poker face at all times, and watch your mouth. Never reveal that the home is all you ever dreamt of. If they ask you how you feel about a house that they have just shown you, just say "It's nice. What else have you got to show me?"
Never let a agent ever think that they are the only one even if they are. When they make an appointment time with you, decline the first time given because "... I am viewing another property at that time. ". Let them know that you have other options. The OTP should come as a surprise to them.
When the agent declines your first offer (which is in writing), insist that they present it, they are obligated to.
 
I asked the agent for an OTP, the one case they had the sellers details already filled in, the other didn't. I then crossed out any irrelevant sections and initialed next to crosses, added clauses (like subject to bond approval at prime or below unless happy with it), initialed next to those too.

Regarding special clauses/suspensive conditions, what you can put there I found depends on how you feel when looking at a property, and yes you should put clauses to make yourself feel comfortable, but remember that these clauses also put risk on the seller, and in a multiple offer situation, they're likely to accept one with less stipulations (happened to me).

The OTP that I did most recently had your clause c and e already there in some form.

I checked financials before making an offer in all cases.
 
RedViking said:
I have a bunch of questions as I am now seriously looking and ready to buy (assuming the bank is as well) . I can't remember if some of them I already asked and were answered as I bookmarked a 1000 posts and my inbox is a mess /facepalm

1. Chances of getting approval.

I work for myself (sole proprietor), last ±15 years freelancing. I don't have a registered company or entity (in SA) and just send a monthly invoice to the foreign company and then get paid. So the only proof of my income is my bank statements and the tax I pay (Provisional IRP6 + ITR12). Its super straightforward as I work from home / Internet. Will 2 or 3 years bank statements be good enough?
Click to expand...

What I needed as a sole prop:
1653466909824.png

Is the reason you want to email the agent that you aren't in the same area? Otherwise you can just meet with the agent and they will handle most of the OTP.
 
RanzB said:
What I needed as a sole prop:
View attachment 1315090

Is the reason you want to email the agent that you aren't in the same area? Otherwise you can just meet with the agent and they will handle most of the OTP.
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Yeah I will be about 3-4 hours away.

I will contact the accounting firm that does my provisionals and what all they can provide. Cool.
 
RedViking said:
I have a bunch of questions as I am now seriously looking and ready to buy (assuming the bank is as well) . I can't remember if some of them I already asked and were answered as I bookmarked a 1000 posts and my inbox is a mess /facepalm

1. Chances of getting approval.

I work for myself (sole proprietor), last ±15 years freelancing. I don't have a registered company or entity (in SA) and just send a monthly invoice to the foreign company and then get paid. So the only proof of my income is my bank statements and the tax I pay (Provisional IRP6 + ITR12). Its super straightforward as I work from home / Internet. Will 2 or 3 years bank statements be good enough?

Credit score 670+ or 10/10 with Absa.

Pre-approval looks great with Absa, but it does not require to submit any documents.

2. I see a house I like and want to buy. What will the very first email look like?

"Dear Agent, I would like to put in an offer for the property at 66 Viking Drive, Valhalla of RXKK subject to bond approval and a signed OTP by both parties. Please supply the OTP before 17:00 today."

Will they then send me an OTP?

3. How much time do you have to read through the OTP and sign? I will need time to go through the OTP, ask questions here, possibly send to my lawyer, this will probably take a day or two. Will they allow time for all of this or is it like the rental market, first signed, first served?

4. What are the common special points/clauses/conditions which should be added to the OTP?

a. Subject to bond approval and with a max. prime rate or prime minus + 105% loan.
b. Subject to approved up-to-date and current building plans of which a copy has been supplied to the buyer.
c. All rates and taxes are up to date and Owner(s) / Seller's responsibility.
d. Property is vacant on registration and there will be no tenants or other lease in place, otherwise this will invalidate the OTP, registration may not be delayed, and owner will be held liable for any damages, fees or legal proceedings.
e. Seller/Owner is responsible for insurance, rates & taxes (including water and electricity) and maintenance until the date of transfer. Whether the property is occupied by the seller, unoccupied, or even in the event of the purchaser taking occupation before transfer date and paying occupational rent.

5. (Complex) Any Complex or Estate specific clauses to OTP?


I'll have more questions later most probably.
Click to expand...

If self employed, at FNB you need 2 to 3 years bank statements. (Take note if you apply via Fnb maybe)
 
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