Transfer of ownership of property

[marco79]

I wonder if you could help me with a query? Have you heard of "transfer of ownership of property" deals where the purchaser pays the owner a deposit (maybe 10%) then have a fixed payment (which usually equals the monthly bond amount) over 20 years. Hereby the seller avoids applying for finance.

Is this legal in SA? And do you know where i can find any info on these type of transactions?

 

[stoke]

The buyer would run the risk of never owning the house.
Most buyers take one look at this deal and run for the hills.

The greatest problem is that, at the end of the payment period, the transfer of ownership still has to happen, and if the owner died or conveniently forgot that the house was being sold, suddenly the buyer has to prove ownership.

Other problems like compound variable interest, missed payments, structural insurance, structural repairs and maintenance and who pays the rates and taxes further muddy the waters.

Basically, buyers will be difficult to find.

 

[moklet]

Yes a sale like this can happen, of course you need to document all the details very well. Basically the seller becomes your financer. It is used where either the bank is not willing to mortgage the property or the buyer won't be able to get normal finance.

It is a very tricky sale though and I wonder how often they happen

 

[marco79]

Anyone know where i can get more info about this transaction?

 

[undesign]

As moklet said, if you take transfer then it is the same as any other property purchase, except that the seller is financing the house - and you will register a first mortgage bond in favour of the seller.

You just need an attorney to draw up the deed of sale, loan agreement and the mortgage bond deed.

There may be NCA issues for the seller - extending credit, affordability of purchaser etc. - but not your problem.