Offer to purchase question

[newby_investor]

I have always had great service from Standard Bank, been with them since the mid 90's when I was a teenager, the only 'issue' I ever had was when applying for a home loan. They would not move 0.03 percentage points to match ABSA's offer, so I never went with them and I can't remember bothering to apply for vehicle finance with them when I bought the Touareg, I went with ABSA again who had the best offer.

Interesting how people's experiences differ. ABSA haven't even bothered to respond to my application.

 

[newby_investor]

If you buy cash! Ask to pay the full price with fees before lodging only. Investing it in a trust (the interest rate is super low) , and you need to pay admin and fidelity fees!

Interest rates anywhere are super low at the moment. My Pro forma invoice was just shy of R70k, so a fairly small amount compared with the whole transaction. If you're worried about a month's worth of interest from that amount, maybe you can't really afford a property.

I asked the attorney to tell me when to pay the money to make the transaction go as quickly as possible. So I paid all the duties and things up front so SARS is happy quicker. I'm paying the cash component (i.e. purchase price minus bond amount) just before lodging. Though even then, the interest that it's currently gathering in a money market account isn't worth losing any sleep over.

 

[Wrath of Khan]

Interest rates anywhere are super low at the moment. My Pro forma invoice was just shy of R70k, so a fairly small amount compared with the whole transaction. If you're worried about a month's worth of interest from that amount, maybe you can't really afford a property.

I asked the attorney to tell me when to pay the money to make the transaction go as quickly as possible. So I paid all the duties and things up front so SARS is happy quicker. I'm paying the cash component (i.e. purchase price minus bond amount) just before lodging. Though even then, the interest that it's currently gathering in a money market account isn't worth losing any sleep over.

I don't think you fully understand the difference in interest rates & fees with regards to depositing the full price of the house into an attorneys trust account. It's not just the pro forma statement, you have to pay the ENTIRE price of the house if you are buying it cash. The attorneys trust account is always a scam, lowest interest rates and HUGE fees per month! The difference per month can be thousands, not just R20 here and there.. and if the transfer takes 2-3 months and sometimes longer, well at the end of it you would have lost 10's of thousands.

 

[Fcon_Vpro]

Interest rates anywhere are super low at the moment. My Pro forma invoice was just shy of R70k, so a fairly small amount compared with the whole transaction. If you're worried about a month's worth of interest from that amount, maybe you can't really afford a property.

I asked the attorney to tell me when to pay the money to make the transaction go as quickly as possible. So I paid all the duties and things up front so SARS is happy quicker. I'm paying the cash component (i.e. purchase price minus bond amount) just before lodging. Though even then, the interest that it's currently gathering in a money market account isn't worth losing any sleep over.

He took the purchase price + transfer money from an existing bond and it ran over a long period like 6 months+(can't remember the exact timeline but sounded long) because the deed was lost on the property.
So his argument is that his bond interest is higher than the trust holding account interest.
So his situation involves 6months+ worth of interest on entire purchase price and not 1 month of interest on R70k.

 

[zerocool2009]

Interest rates anywhere are super low at the moment. My Pro forma invoice was just shy of R70k, so a fairly small amount compared with the whole transaction. If you're worried about a month's worth of interest from that amount, maybe you can't really afford a property.

I asked the attorney to tell me when to pay the money to make the transaction go as quickly as possible. So I paid all the duties and things up front so SARS is happy quicker. I'm paying the cash component (i.e. purchase price minus bond amount) just before lodging. Though even then, the interest that it's currently gathering in a money market account isn't worth losing any sleep over.

Ok, let me describe you what I am doing, then you would understand my point of view.

I am using existing bonds to buy property cash. So if the interest rate on a trust (via the attorney) is low, my bond is lets say 4% higher, so I am losing out badly if that makes sense.

In the 6 months, I paid R15 000 of interest for my bonds (just because the seller's side was one big mega mess).

Lets say I paid R1 000 000, and now need to wait for 6 months before its registered with all the issues. Who would be happy ? That is why I have a thing, pay the PURCHASE PRICE or DEPOSIT once you lodge, and pray all is now in order from both (the transport and seller's) side. Which wasnt in my case. Either party didnt even communicate to say the least.

Its not about affording LOL, its about paying interest (on a bond) vs earning interest (in trust)

 

[newby_investor]

Ok, let me describe you what I am doing, then you would understand my point of view.

I am using existing bonds to buy property cash. So if the interest rate on a trust (via the attorney) is low, my bond is lets say 4% higher, so I am losing out badly if that makes sense.

In the 6 months, I paid R15 000 of interest for my bonds (just because the seller's side was one big mega mess).

Lets say I paid R1 000 000, and now need to wait for 6 months before its registered with all the issues. Who would be happy ? That is why I have a thing, pay the PURCHASE PRICE or DEPOSIT once you lodge, and pray all is now in order from both (the transport and seller's) side. Which wasnt in my case. Either party didnt even communicate to say the least.

Its not about affording LOL, its about paying interest (on a bond) vs earning interest (in trust)

Ok fair, so you risk more in interest than what most people would.

But still, if you are buying a property, especially in the current climate, then it's just like any other investment and you need to be aware that this kind of thing can happen and be prepared for it.

Not saying you need to be happy about it, it's money lost after all, but it is one of the risks associated with property investment.

 

[Speedster]

Transfer attorneys for sale contacted me to come in and sign the docs on Monday. Whoop whoop

 

[zerocool2009]

Just a note for FNB guys. Alot of you still dont get the perk of going direct (as in NAV when applying for bond). Lets say you buy a house of R2.6KK.

FNB will give you roughly R17K back in registration fees, and up to R6000 of the first debit order.

Use it (if you want). A mortgage originator is nice, but FNB want to save on paying others to get work, and rather help clients.

Be savvy

 

[zerocool2009]

And another tip 101 ... a flexi bond ! Pay a little bit more in per month ... it snowballs (really !!!!) Just get into the habit (and stick with it)

 

[itareanlnotani]

Just a note for FNB guys. Alot of you still dont get the perk of going direct (as in NAV when applying for bond). Lets say you buy a house of R2.6KK.

FNB will give you roughly R17K back in registration fees, and up to R6000 of the first debit order.

Use it (if you want). A mortgage originator is nice, but FNB want to save on paying others to get work, and rather help clients.

Be savvy

Like **** they will.

 

[zerocool2009]

Like **** they will.

Lol! Follow the right channels, and you get it! Listen to my advise! Its for free! Its facts

 

[PotatoGuardian]

And another tip 101 ... a flexi bond ! Pay a little bit more in per month ... it snowballs (really !!!!) Just get into the habit (and stick with it)

We are both FNB clients for years and they wouldn’t give us a 100% loan so in our case going with a bond originator was better. He gave us advice about our risk assessment that we wouldn’t have known if we went direct. This advice just depends on your circumstances IMHO.

 

[zerocool2009]

We are both FNB clients for years and they wouldn’t give us a 100% loan so in our case going with a bond originator was better. He gave us advice about our risk assessment that we wouldn’t have known if we went direct. This advice just depends on your circumstances IMHO.

Well, if you not getting a 100% bond, put a deposit down. Its nothing to do with 100% or 80%! You can apply for a 30% bond and still get the fnb perk

Its nothing to do with circumstances. If you want a bond, and with fnb, go direct, and if they want a deposit, dont cry.

 

[PotatoGuardian]

Well, if you not getting a 100% bond, put a deposit down. Its nothing to do with 100% or 80%! You can apply for a 30% bond and still get the fnb perk

Its nothing to do with circumstances. If you want a bond, and with fnb, go direct, and if they want a deposit, dont cry.

Not crying. Could have put a deposit down but didn’t want to because that investment is growing pretty well.

Also the rate I got with standard bank was better so no loss to me. All I’m saying is that an originator helped me and going direct is not always the best way depending on your circumstances.

 

[itareanlnotani]

Lol! Follow the right channels, and you get it! Listen to my advise! Its for free! Its facts

My experience with FNB has been atrocious throughout the years I've been with them, particularly when it comes to bonds.

Most memorable were a spate of times when they told me I couldn't afford to buy places as I didn't have enough income. Ended up paying cash. Their private banking support is also fairly useless, especially considering the fee's they charge. Even HSBC is cheaper than FNB, and thats saying something.

 

[zerocool2009]

My experience with FNB has been atrocious throughout the years I've been with them, particularly when it comes to bonds.

Most memorable were a spate of times when they told me I couldn't afford to buy places as I didn't have enough income. Ended up paying cash. Their private banking support is also fairly useless, especially considering the fee's they charge. Even HSBC is cheaper than FNB, and thats saying something.

To be honest here with you, someone who works with me had now a 3 months nightmare with fnb HL as-well. I gave him a very high up ladies info, and its sorted within 120 minutes

In some cases in banking, its who you know... (as in the pro’s at the other end who isn’t just sitting a chair warm, getting paid a salary).

Look, in my case also, they told me I cant buy another property (while having 3 paid up bonds). Its rules! The bank sees anyone with paid up bonds savvy. But not everyone is committed to save. I could buy nice flashy cars with my paid up bonds.

Its all about how you bank (your history).

And the moral of the story on my side, if the bank dont want to offer me another bond, or say close flexi’s, the answer is ay cash (and that is what I did).

The statement on fees, come on, picture it was for free, what chaos that would bring. Give the bank a few peanuts for using them

 

[ItherNiT]

Made an offer on Saturday. Got accepted yesterday, on the condition that the people get their visas. So I'm skeptically excited.

Really a nice place. Can just move in and stay, with whole bunch of extra's ( doggy door in security gate, water filtration system, gas stove, built in braai and a fire place)

Now its just the wait till the end of the month to get confirmation that I'm getting the place.

 

[Dark Agent]

I took FNB bond, went direct to the banks. My friend went bond originator.
FNB got 7.25% rate(Prime + 0.25%) + 50% off bond attorney fees + 50% ebucks on first installment.
Friend got FNB prime rate no discounts.(5 months ago).

Currently my bond documents are all signed and all lawyer fees paid. Lawyer said should get my bond registered only 3rd week of January.

Now my friend bought an house where the tenant lease expired November, now last week they say they were not informed about moving about out and they needed a 30 days notice at least. The OTP states they take occupation on 1 December. The agent said they cannot do anything since the new owner are there landlords now, the tenants agreed to move out 28 December and they said they already got a new place. They were really friendly and even showed my friend the new leased, so he Dodge a bullet.

I signed a similar OTP that states I take occupation 1 March and now wishing I don't run into the same case.

Spoke to a friend and he swore me for signing the OTP. Walk away from sale if there are tenants.

Anyways he advice me to make sure always in the OTP that the following is written.
1. Subject to bond confirmation and specify the interest rate. If interest rate is higher and if the purchaser accepts the rate the condition of bond will also be met.
2. If lease, state that the rent should come from seller account at the rate agreed on OTP.
3. Also state the seller is responsible for eviction of all tenants.
4. Also add a clause to cover other utility bill just as Fiber, alarm, security release cost on seller account.
5. If occupation rent date elapse and old tenants still there, Request that the bond installment cost + rates + levy be paid from seller, since most sectional title OTP will have its purchaser side responsible.
6. There always a clause of benefit and risk, Add if tenant the cost will be on seller account.
7. List that all patent and latent defects should be brought forward. Also state that subject to a full inspection being done. So only when seller accepts the offer a full inspection will be done. If Latent defects are pick up then the seller will need to address the issues at the seller cost.
8. Don't use the agents template. Lot of ambiguous crap it in.
9. Always make the seller sign the OTP first.


So if the tenants don't move out, what is my recourse? OTP states I take occupation on the 1st of March and the lease expired end of Febraury 2021. My lawyer friend said its on me.

 

[zerocool2009]

I took FNB bond, went direct to the banks. My friend went bond originator.
FNB got 7.25% rate(Prime + 0.25%) + 50% off bond attorney fees + 50% ebucks on first installment.
Friend got FNB prime rate no discounts.(5 months ago).

Currently my bond documents are all signed and all lawyer fees paid. Lawyer said should get my bond registered only 3rd week of January.

Now my friend bought an house where the tenant lease expired November, now last week they say they were not informed about moving about out and they needed a 30 days notice at least. The OTP states they take occupation on 1 December. The agent said they cannot do anything since the new owner are there landlords now, the tenants agreed to move out 28 December and they said they already got a new place. They were really friendly and even showed my friend the new leased, so he Dodge a bullet.

I signed a similar OTP that states I take occupation 1 March and now wishing I don't run into the same case.

Spoke to a friend and he swore me for signing the OTP. Walk away from sale if there are tenants.

Anyways he advice me to make sure always in the OTP that the following is written.
1. Subject to bond confirmation and specify the interest rate. If interest rate is higher and if the purchaser accepts the rate the condition of bond will also be met.
2. If lease, state that the rent should come from seller account at the rate agreed on OTP.
3. Also state the seller is responsible for eviction of all tenants.
4. Also add a clause to cover other utility bill just as Fiber, alarm, security release cost on seller account.
5. If occupation rent date elapse and old tenants still there, Request that the bond installment cost + rates + levy be paid from seller, since most sectional title OTP will have its purchaser side responsible.
6. There always a clause of benefit and risk, Add if tenant the cost will be on seller account.
7. List that all patent and latent defects should be brought forward. Also state that subject to a full inspection being done. So only when seller accepts the offer a full inspection will be done. If Latent defects are pick up then the seller will need to address the issues at the seller cost.
8. Don't use the agents template. Lot of ambiguous crap it in.
9. Always make the seller sign the OTP first.


So if the tenants don't move out, what is my recourse? OTP states I take occupation on the 1st of March and the lease expired end of Febraury 2021. My lawyer friend said its on me.

One question, so I assume you are paying occupational rent if the transaction isnt registered by 1 March 2021.

Dont make the tenant your issue, its the existing owner's issue.

10. The biggest tip, pay all fees and deposit just before lodging !

 

[Dark Agent]

One question, so I assume you are paying occupational rent if the transaction isnt registered by 1 March 2021.

Dont make the tenant your issue, its the existing owner's issue.

10. The biggest tip, pay all fees and deposit just before lodging !

Yes, the lawyer was given 1 month for levies + rates + some weird cost. No deposit required , but occupation rent will be due no later then the 1st of each month.