Buying and Selling Property Terms

The following terms which are specific to the property industry may prove to be useful to know when buying or selling a property:

Agents Commission
This is the professional fee earned by an Estate Agent for facilitating the sale or rental of a property.

Agreement of Sale
Also known as the Deed of Sale, this is a contract drawn up between seller and buyer which legally records the terms and conditions of the sale.

Bond
This is also referred to as the Mortgage Loan whereby a loan is afforded to the property owner with the property acting as security for said loan.

Bridging Finance
If a sale or purchase is in progress, interim financing may be required to fund another transaction. A short-term loan may be used as cover for the interim funding needed.

Capital Gains Tax
This is a tax paid on the profit from the sale of an asset of a capital nature, such as a property. However, this is not applied to a homeowner’s primary residence.

Date of Transfer
This refers to the date at which the property has been successfully transferred into the new owner’s name. This usually occurs between 2 to 3 months after the date of sale, dependent on all conditions of the sale being fulfilled.

Deposit
The deposit is the amount of funds that the buyer has available to contribute to the purchase price of the property before loan financing is taken into account.

Electrical Compliance Certificate
This is required by the new owner of a property before the Local Authority will connect the electrical supply.

Freehold / Full Title
This refers to a free standing house that is built on a plot of land, bearing its own ERF number.

Sectional Title
This refers to owning a portion or section of a building within a communal property. There is also a right to exclusive use of certain parts of the communal property.

Share Block
A buyer may purchase a share in a share block scheme whereby he is entitled to use a specific area / apartment / office of the building owned by the share block company. Although the buyer has access to and use of the unit he is never granted the Title to that unit.

Suspensive Conditions
The sale agreement does not come into being until certain suspensive conditions have been met. Such conditions have the ability to put the sale on hold until compliance is achieved.

Term
This is the period of repayment undertaken by the buyer in which he will pay the mortgage loan on the purchased property. This is usually done over a period of 20 years (240 months).

Title Deed
This is a legal document lodged with the Deed’s Office that proves ownership of a property by the registered home owner.

Transfer Duties
Charged on a sliding scale, transfer duty is a tax that is levied by the government and paid by the buyer when a property is transferred into his name.

DISCLAIMER: The information contained in this article is the opinion of the Author and should not be taken as advice. The Author is NOT registered to give any type of Financial or Legal Advice and is not associated with a Bank or Legal Firm. The information in this article has not been verified and may be inaccurate or incorrect.