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Buying Scenario: 3BR apartment in Cape Town CBD

South Africa is seen as an attractive place to buy property due to the weather, lifestyle and exchange rate working in the favor of most investors. Buying any sort of property in South Africa can be a bit of a process though and this scenario should give you a better idea of what to expect. This particular scenario covers buying a 3 bedroom apartment in Cape Town CBD, one of the most popular tourist destinations in South Africa.

 

 

 

The buying process itself is quite straightforward; however, it is time consuming and some parts of it may change depending on where you are buying and for what purpose you want to use the property.

 

Steps in the purchase of a 3-bedroom apartment in CBD of Cape Town

Contact a real estate agent, or, if you would like a wider scope—contact several estate agents. Some of the reasons to use an estate agent include:

 

  • They will have a better feel for the market, will know which properties will suit both your needs and budget and will also be able to speak to other agents if they themselves can’t help you.
  • They will be able to advise you on the local areas, the facilities available and any potential problems.
  • An offer to purchase is done through the estate agent.

 

Remember that the seller has the right to reject an offer to purchase or even to issue a counter offer.

 

  • While it is possible to find privately sold property without going through an estate agent, these are a lot harder to find.

 

Appoint a property lawyer

The property lawyer only comes into play once the offer to purchase has been accepted and duly signed by both parties. The lawyer’s main functions include:

 

  • Arrange for Title deeds to the property and inform the seller’s bank that property is being sold (only if property is still mortgaged).
  • Check to see if any outstanding arrears on municipal accounts.
  • Act as liaison with all financial institutions involved in mortgaging.
  • Liaise with the South African Revenue Service in regards to payment of taxes. (transfer fee is currently between 0 – 8% depending upon property value).

 

Deposit payment

This is normally 10% but some sellers may require more.

Most sellers will require a deposit to secure the property while the transfer of ownership and funds go through. The deposit is normally deducted from the total amount due once the transaction is completed.

 

Transfer of ownership

Once all of the legal requirements have been satisfied, the lawyer will then send the deeds to the Deeds office (fee of between R55.00 to R1,000.00).

  • After examination by the Deeds office, the transfer takes place.
  • The total waiting time for this can take up to 8 weeks.

 

Balance settlement with seller

The outstanding balance of the purchase price, along with any other accumulated fees, is then paid and the financial transaction is concluded.

 

Additional information

Additional fees such as rates, taxes, water and municipal fees are paid pro-rata.

  • It is a good idea to ensure that the previous owner was up to date on these fees as some municipalities will not re-connect services if the account is in arrears.
  • This is mostly handled by the property lawyer; however, sometimes will have to be done by the purchaser.

Some properties in South Africa may also require a Beetle clearance certificate and it is worthwhile to check this with the estate agent before putting in an offer to purchase.

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One comment on “Buying Scenario: 3BR apartment in Cape Town CBD

  1. charleybflint
    April 3, 2014

    Thanks for this blog post. I am currently starting a property search in CT…so this is really useful information. Thanks again. x

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