Home buying: what are conveyancing fees, and what it covers?
Buying a home requires considerable time and financial commitment, so when your offer is accepted on a new home, it can be a moment of joy. But this is just the beginning of the buying process.
To transfer a property title to your name, you must navigate the legal process and pay conveyancing fees. For some people, this can take a couple of months or even longer. Therefore, it's important to know what conveyancing fees entails.
What is conveyancing?
A conveyancing fee is a cost associated with the legal process of transferring property ownership from seller to buyer. As part of the process, the buyer must pay conveyancing fees to the conveyancing attorney who oversees the transaction. The conveyancing process is done to shield the buyer from unexpected outcomes and ensure you are informed of any problems with the property.
What do conveyancing fees cover?
Throughout the process of transferring property ownership from the seller to the buyer, conveyancing fees encompass the legal and administrative work required. A conveyancing attorney's obligations include ensuring that the Deed of Sale adheres to all legal requirements and collecting and preparing all the necessary documentation to finalise the sale's registration with the Deeds Office.
How much does conveyancing cost?
Depending on the property's value and location, conveyancing fees may vary. Normally, the seller selects the conveyancing attorney, but the buyer is responsible for settling the attorney's fees. Even though the buyer pays for the conveyancer's services, it is expected in South Africa for the seller to select the conveyancing attorney who will conduct the legal process of transferring property ownership to the buyer. Because the seller is more at risk, the buyer may request that their chosen attorney be hired in some situations, usually if they offer a lower charge.
A conveyancing attorney will charge fees for each service they perform, including requesting cancellation figures, preparing relevant documentation, applying for rates clearance, transfer duty, and property searches.
The breakdown of the conveyancing process
When buying a home, the conveyancing process involves enlisting a conveyancer to conduct property searches, examine legal documents, prepare necessary legal paperwork, oversee the exchange of contracts, transfer payments, and register the property. This process assures the buyer that the transaction is lawful and that you rightfully own the property.
1. Title deed and property information
The seller's conveyancer obtains title deeds and property information from the deeds office at the beginning of the conveyancing process. This information is then provided to the buyer for review, including information about the property's ownership and history.
2. Property searches
During the conveyancing procedure, the conveyancer will undertake property searches to check for no outstanding debts or legal claims on the property. These searches may include looking for any unpaid rates or taxes, current mortgages or other encumbrances that may affect the property's value or ownership.
3. Drafting of legal documents
These documents include the seller's signed Power of Attorney to Pass Transfer, which authorises them to transfer property ownership. The conveyancers must submit proof of the parties' marital status and financial stability, including the parties' details.
To safeguard the interests of both the buyer and the seller, the conveyancing attorney will ensure that these documents are correctly executed and appropriately reflect the terms of the transaction.
4. Payment of fees and taxes
The conveyancer will pay taxes and fees related to the property transfer during the conveyancing process. These include transfer duty, VAT, and rates and taxes. The conveyancing attorney will pay these fees and taxes on time to avoid delays or penalties.
5. Registration of transfer
After the conveyancer completes all the legal requirements, the transfer documents will be registered at the Deeds Office. It can take several weeks to complete, so the conveyancing attorney will keep the buyer updated during that time. When the transferring process is done, the buyer will be legally entitled to the property, and the transaction will be complete.
Tips on managing conveyancing fees
There are several ways in which a buyer might cut down on their conveyancing costs, and it includes:
- Knowing the costs: Understand all the fees and expenses of transferring property, including the VAT and transfer duty.
- Being organised: Prevent delays and extra fees by giving the conveyancing attorney all relevant paperwork and information. By having all the necessary information, all can be completed efficiently and without hiccups.
- Avoiding unnecessary services: You can save money and avoid unnecessary expenses by limiting costs to only the essential services involved in the transfer of ownership.
Need some expert guidance while house hunting? Reach out to Tshenolo Properties, and our experienced practitioners can help you buy the home of your dreams.
