Conveyancing fees in 2019: What exactly are you paying for?
Category Industry News
Once you find your dream home, and put in an offer that's accepted, you'll need a conveyancing attorney to transfer ownership to you.
The conveyancing service includes preparation and gathering of all documents required to finalise registration of the sale once it is lodged with the Deeds Office.
It's a complicated legal process that is worth every cent of the fee to make sure transfer happens and the new ownership is registered as is required by government.
The fees you pay the conveyancing attorneys are separate from transfer duty paid to SARS. Transfer duties are statutory and cannot be negotiated.
What are conveyancing fees?
Conveyancing or transfer attorneys' fees form part of the extra costs that come with purchasing a property and cover a range of services. Conveyancing simply means transferring ownership of the property from one person to another, or a company or trust. Conveyancing fees are separate to transfer duty, which is a tax levied on the value of any property acquired by any person by way of a transaction or in any other way. Transfer duty is exempt for sales below R900 000 and is on a sliding scale thereafter. This exemption is considered as part of the annual Budget and may change in March 2019. Should the property be bonded, bond attorney fees and registration costs are also over and above conveyancing fees and transfer duty.
What does conveyancing cost?
Fees are variable based on guidelines issued by the Law Society of South Africa. They are calculated on the purchase price of the property or the capital amount of the bond and were most recently updated in July 2018. For example, a property that is sold for between R800 000 and R1 million attracts a conveyancing fee of between R15 090 and R18 030, exclusive of VAT, while bond registration fees for the bond registration attorney will be in the region of R16 560, assuming a bond of R900 000. The conveyancing attorney will charge additional fees for every service they complete, from requesting cancellation figures to preparing relevant documentation, applying for rates, transfer duty and conducting deeds office searches. You should remember that conveyancing fees are over and above the transfer duties that are payable to SARS on property transfers above R900 000.
Who pays the fees?
The seller usually appoints the conveyancing attorney, but their cost is covered by the purchaser. This can make the fees quite challenging for the purchaser to negotiate and is something to keep in mind when signing your offer to purchase.
What does the service include?
The conveyancer will ensure that the Deed of Sale meets all the legal requirements. They will also gather and produce all supporting documentation necessary to finalise registration of the sale once it is lodged with the Deeds Office.
The information they will request includes detail of the home loan, cancellation figures and Title Deeds from the seller's bank as well as a Rates Clearance Certificate from the municipality.
They will also need to draft certain documents. These include a Power of Attorney to Pass Transfer, signed by the seller, authorising them to transfer ownership of the property. The conveyancers will also have to file a declaration of marital status and solvency of both parties, noting each of their identity numbers in the document.
The conveyancers must also prepare a declaration for transfer duty or VAT in addition to home loan registration documentation for the buyer, as required.
A conveyancing attorney is one of the most important people in the home-buying process and is responsible for ensuring that ownership is transferred from the seller to the buyer, and that the buyer does not pay until the property is registered in his or her name. Meanwhile, if you're still looking to buy, South Africa's leading home loan comparison service offers a range of home loan calculators, including those that determine bond affordability and bond repayments. Ooba's Bond Indicator also allows you to do a secure credit check on-line.