Part 1: Are you ready for a new home?
Purchasing or selling a property is probably one of the most stressful things you could go through in life, and when it comes to the process, financing and legalities thereof most people become overwhelmed. It includes a lot of terms and forms that you may not be familiar with. These days there are many tools to help ease the process. But you might still need some personal assistance in this process.
Engel & Vökers offers highly trained property specialist who work closely with an in-house financial service provider to ensure that we assist you every step of the way. Over the next 2 months we will be taking you through this process and giving you all the information that you need to know when starting your home search.
In this edition, we cover the pre-purchase or sale steps and the obtaining of finance up to the registration process.
When entering the property market, you should be aware of possible costs which you could occur. In the case of buyers it would include bond costs and transfer fees, and in the case of a seller, an electrical compliance certificate and pest and gas certificates (if applicable).
At the initial thought of buying or selling, there are certain steps that you could take to ensure that the process runs as smooth as possible. Sellers should request cancellation figures from their banks to avoid penalties and to speed up the registration process. However, should your property not sell within 3 months, you will need to re-issue this request. Also ensure that you have a copy of your building plan as the buyer is may request this.
Buyers can have themselves pre-qualified confirm their qualification and affordability free of charge. EV Finance can help with this and we invite all clients to contact us for help with this process. All you need is your latest payslip and a list of your personal expenses which include car, credit card and loan repayments, and personal expenses such as school fees, food and water & electricity. You do not need to include your bond repayment if you are renting or selling your current home, however if you plan on retaining your property and acquiring another one for investment, you will need to include this. If you are not sure what you need to disclose, you could also furnish our financial advisers with bank statements and they will assist you further. EV Finance you will issue you with a formal home loan pre-qualification certificate and you and your property specialist can now start the property search.
Once you have found the home of your dreams, you will need to complete a formal offer to purchase which is then presented to the seller for approval, your property specialist will assist you with this process. Should the seller accept your offer, the offer to purchase is concluded. Please take note that both the buyer and seller need to have their FICA documents (copy of ID and proof of residence) ready which need to be handed to their agent with the contract. The buyer can now apply for finance, which EV finance can again do on your behalf at no additional cost.
An EV Finance representative will contact you, the buyer, and obtain the financial documentation needed.There are two groups of applicant’s, salaried and self-employed individuals. For each group the banks have different pre-requisites. It is important to make sure you have all the necessary documents before applying for your bond.
Salary applicants will require:
- Payslips – Your income will be verified against your bank account
- Latest 3 months’ or latest 6 months bank statements if in receipt of allowances or variable pay – Bank statements must be stamped by the bank (internet statements are not allowed).
- Detailed income and expenditure statement that is signed by the applicant.
- Statement of assets and liabilities.
- Identity documents.If the applicant is not an SA citizen a copy of proof of residence and work permits are required.
- Rental contracts in respect of rental income – This is to be used in affordability assessment.
- Comparative financials covering a trading period of 2 years.If financials are more than 6 months old, then up-to-date, signed management accounts are required.
- Letter from the auditor confirming personal income.
- Cash flow forecast for ensuing twelve months.
- Personal statement of assets and liabilities.
- Personal as well as business bank statements. (Absa: covering latest 12 month period, other banks the last 6 months)
- Company/CC/Trust – statutory documents
- Identity document of directors, members, or trustees.
The application is now submitted, in the case of EV finance this is done electronically.As per the service level agreements within the 4 major banks, an Approval in Principal (AIP) is issued within 5 – 7 working days. An AIP qualifies you for the bond amount according to your credit score and affordability.
An AIP is subject to valuation, which the bank will take care off and should the property qualify, a final grant will be issued within 48 hours.Once you have received the Final Grant, you will receive a formal quote. Upon accepting the bank’s quotation, instruction is sent to the relevant bond attorney and the registration process takes place, which we will cover in next month’s edition so make sure that you get your copy.
Should you have any queries regarding the purchasing or selling of property, please feel free to contact us on 012 346 7777 or alternatively sms “Advice” followed by your question and email address to 33609 and we will gladly assist in any way that we can.
Should you wish to be pre-qualified to see what you can afford, please contact Sandy Reddy on 082 000 0000 or e-mail Sandy.Reddy@EVFinance.co.za. You could also sms the word ‘PREQ’ with your name or e-mail address to 33906 andwe will contact you.