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What to put on the price tag?


The first thing you need to establish is the market value of your property. There are various ways to do your research

  • Enlist the assistance of a prominent estate agent in the area
  • Read your local newspaper's property sections to gauge what prices houses are selling for in your area
  • Visit property websites to obtain an estimate value of homes in your neighbourhood
  • There are also several private companies that provide this service at a fee

Whichever you choose, establish what you would consider to be the minimum realistic selling price. There's obviously possible profit to be made in property, so it is vital to understand the costs and obligations.

The major ones include

  • Outstanding balance of your existing home loan, if applicable
  • Commission paid to either an estate agent or any other intermediary selling your property
  • The South African Revenue Service regarding Capital Gains Tax if this is not your primary residence
  • Municipal and legal costs

Who will sell your property?


You can task a registered estate agent to do the job or even sell your house privately.

Flying your own flag

A private sale will mean a lot more work on your part. Apart from ensuring that the property is well presented when being viewed by a potential buyer, there's also the matter of legalities and agreements. You can buy a run of the mill sale agreement from a leading news outlet, so long as you have a clear understanding of the specific information required and where it should be sent.

You can also enlist the services of a growing number of Internet based companies that provide private sellers with a platform to sell their homes. This channel of finding potential buyers is becoming more popular.

Outsourcing to a professional

The most common way to sell property is through an estate agent. When selecting an estate agent, choose a professional with a reasonable knowledge of your area. Note the 'For Sale' signs and consult your local property guides for a good indication of the estate agents that operate in your neighbourhood.

As the seller, you are liable for the commission that is paid to the estate agent, which averages around 7% (excluding VAT) of your final selling price. Their fee will include advertising your property, finding a suitable buyer and acting on your behalf between the attorneys and buyer. This amount is usually paid from the proceeds that are derived from the sale. You should consider the desired amount you want for your property, and then speak to the estate agent about factoring their commission into this figure.

Remember, that the estate agent's commission can be negotiated and is done so in writing by means of a mandate, which also outlines the terms and conditions regarding the sale of your property. This mandate is a binding agreement between you as the seller and the estate agent. The two common mandates are either open or sole mandates. An open mandate signed with the estate agent means that they do not have exclusivity in selling your property. This means you are not restricted to using only one. A sole mandate provides exclusive right to the selected agent for a particular period. Ensure that you're comfortable with your choice and only make decisions that best suit you.

Welcome to show day


When your house is officially open for public viewing, make sure it is well presented inside and out. Take note of the following tips to enhance your home's appearance

Interior

  • Store away unnecessary items to avoid clutter - clear surfaces make things appear more spacious
  • Ensure that all beds are neatly made up and furniture arranged neatly
  • Lock away any valuables
  • Some estate agents even advise preparing a pot of coffee to give the house ambiance

Exterior

  • Again, pack away items that are lying around the house that make it look untidy
  • If the property has a garden, make sure it has been recently tended to
  • Clean the pool - sparkling blue water is very inviting
  • If time allows, touch up paint and neaten up where needed. However, do not 'cover up' any defects
  • it is always advisable to disclose any to the estate agent or potential buyer

A suitable buyer has been found


Once a potential buyer has been found, they will make an offer on the Agreement of Sale. If you sign this agreement, it means that you accept the offer. The agreement of sale, also known as the Offer to Purchase, becomes a legally binding agreement outlining the terms and conditions of the sale. The buyer now sets out to find finance, if required, from a commercial bank and if successful, the legal process will be initiated for the transfer of the property.

It is a good idea to ensure that the sale agreement has particular parameters in place such as a time frame in which the buyer is to obtain finance, where after the agreement will be null and void. This will ensure that the sale process is not delayed too much. Remember that in most instances all fixed items are considered part of the sale, so ensure that any items not part of the sale are clearly listed.

Legally speaking


As the seller you get to choose the transferring attorney and the buyer will pay for their fee. If you have a mortgage bond registered over your property (the property is still financed), a cancellation attorney will be allocated to cancel it and will liaise with the financial institution concerned.

If you are buying a new property at the same time, you can request the same transferring attorney dealing with the purchase to act on your behalf for the sale. In this way, you can negotiate a reduced fee for the referral business and also limit the number of people involved. Ultimately this can save time and potentially costs in the entire process.

The attorneys are there to assist with the legal aspects of the sale and purchase of a property. They are also knowledgeable on the municipal requirements that come into play with such transactions. They will advise you of your responsibilities as the seller and even refer you to other professionals if the need arises.

Point of departure for bondholders


You should notify your bank in advance of the pending sale. This is in addition to the attorney requesting cancellation figures/letters of guarantee for the existing mortgage bond. This can be done even before the property is placed on the market. It presents an ideal opportunity for you to seek advice on finance options for the new property as an existing customer.

The cancellation process


A request to cancel the bond will be issued to FNB by the attorney who is nominated by the customer. On receipt of this request, FNB will calculate the cancellation figures which will be issued to the Bank's cancellation attorney together with the Bond document and Title Deed to start the cancellation process. The Bank's cancellation attorney will liaise with the customer's cancellation attorney.

If after 12 months, cancellation of the bond still has not occurred then only will a new request to cancel be required. New cancellation figures must be requested by the attorneys every 3 months.

Early termination notice


You should notify your bank in advance of the pending sale. This is in addition to the attorney requesting cancellation figures/letters of guarantee for the existing mortgage bond. Please note that a 90 day notice period is required by the bank to cancel the bond.

You may give this required notice yourself before the property is placed on the market or you can leave this task to your attorney. It presents an ideal opportunity for you to seek advice on finance options for the new property as an existing customer.

If 90 days notice is received and the bank does not receive a request to cancel the bond within 6 months from this date, the 90 day notice will expire.

Settlement figure on the home loan


Assuming that the mortgage bond will be cancelled within 90 days, provision has been made, where applicable, for the following estimated charges over the 90 day period

  • The outstanding balance: The amount as at the date the cancellation figures are issued.
  • Interest: Based on the interest that will be due on your account during the estimated period.
  • Service fee: This is the monthly fee currently being debited to the loan account for the management and administration of the loan.
  • Home Owners Insurance premiums: Where annual insurance premiums are financed through the loan account and the policy is to be renewed within three months of the figure being issued, provision for the full premium is made. A pro-rata refund will be calculated on settlement of the home loan.
  • Life Assurance premiums: Where annual premiums are financed through the loan account and the policy is to be renewed within three months of the figure being issued, provision for the full premium is made. A pro-rata refund will be requested from the insurer on settlement of the home loan.
  • Early Settlement fee: In terms of the loan agreement the borrower is obliged to give 90 days' notice of an intention to cancel the loan. Where the same notice has not been given or where the 90 days notice has not yet expired the Bank will add the equivalent to three months interest to the settlement amount. It is important to note that the actual fee charged will be calculated on the date of cancellation and will depend on the number of days remaining of the notice period. Where the notice period has expired no fee will be charged.
  • Fixed Rate breakage fee: Where the customer receives the benefit of a Fixed Rate Option on the loan, the breakage fee is the cost of cancelling the fixed rate prior to the official expiry date in terms of the Fixed Rate Agreement.
  • Legal Fees: In cases where litigation proceedings have been initiated on an account then a provisional litigation fee may be added to the balance. Any fees not payable to the litigating attorney on cancellation of the bond will be refunded to the customer.

Please note that no provision has been made for attorney cancellation costs in the settlement figure provided to the attorneys. Attorney cancellation costs include fees charged by the attorney for the cancellation of the bond and are payable directly to the attorney.

Steps to selling


Get the right advice + price

FNB's step by step guide to selling a home will help you make the right decisions and help you understand the process.

What to put on the price tag?

Who will sell your property?

Welcome to show day

A suitable buyer has been found

Legally speaking

Point of departure for bondholders

The cancellation process and costs

Early termination notice

Settlement figure on the home loan