We have bought a house. The seller asked for the transfer to be on 2nd January 2009. We agreed as we were cash buyers and always had a place to stay for free. Anyway the seller thought that if the transfer did not take place on time, we would still move in and pay him R16000 a month rent to until the transfer. However we have told him, we are not moving before the transfer as we can stay rent free at our friends house. The seller is upset as he has been penalised on his bond and also has to pay the new bond for the house he already has bought, had R10000 expense for the electricity repair etc... As we felt sorry for him, we decided to offer him R8000 rent for the month instead of R16000 (we lose that money as we live rent free at the moment). To our surprise, the seller refused our offer. So now he is going to have another month of expenses as the transfer we are being told will not be for another full month. And to think that the seller works in finances....it makes you laugh!
Holiday homes and smallholdings/ farms around Cape Town are also coming in for long overdue corrections. Here is the story of a smallholding of 18ha on Gumtree...
1st of September....
Beautiful smallholding in Baardskeerdersbos Price: R 1,300,000 Date Listed: 01/09/2008 18 000 square meters
After 2 and a half months of no interest we have a cut of R300 000, just short of 25%...
Smallholding in sought-after village of Baardskeerdersbos Price: R 1,000,000 Date Listed: 18/11/2008
Almost a month later and still no takers...
Plot in sought-after village of Baardskeerdersbos Price: R 1,000,000 Date Listed: 14/12/2008
Whilst some/most sellers are "desperate", you must realise that not all sellers are desperate. Your attitude needs to change (and I am glad that the seller refused your rent offer - proves my first point above).
Dont make the assumption that the seller is desperate or that they dont have money... obviously the sellers actions proved you wrong ;)
the seller thought we were bluffing when we told him we were not going to stay and pay rent at his house until transfer day as we could stay for free at our friends house. He thought that there would be a delay of a few days in the transfer date but it now looks like one month. He also thought that by law we had to pay him rent even if we did not move in. It seems he was mislead by his conveyancing attorney. So now he is stuck with a house that will stand empty for one month, he will be responsible if squatters move in and he has all the bills to pay until transfer (water rates, sewer rates etc...).
Anon, unless you are moving into a place in Kyaletshia or Guguletu, I'm pretty sure that squatters wont be moving in, ever!!! And for the rental amount mentioned initially, I think its a pretty decent area!!! Even IF squatters moved in, they'd be removed faster than they moved in ;) We have laws that will take care of that ;)
Ummm... I was a seller before and as long as its a done deal, one month wont hurt that much. One month really wont make or break a person, their budget or their bank account. So all those expenses, for any seller, will be fine. Hehe!
You come across as sounding bitter. Maybe because you were hoping to stay for FREE in your new "to-be" home? Just my opinion!
no we were not going to stay for free in our new home. We are already living for free in a friends house in Camps Bay as he is living in our home in Germany so we both live rent free. our seller has 2 bonds to pay, one on his house and on the house he has already bought. Furthermore we are getting a very good interest at 10.25% on our deposit as we bought the house for cash so the longer the transfer takes, the better it is for me. but we have been told by our attorney that the seller was counting on rent money from us as he is short of over R10000 already with the delay in transfer.
Most offer to purchase clearly state that if the buyer were to occupy the property prior to transfer, there would be occupational rental.
I fail to understand how the seller could confuse the term ''occupational rental''. If the seller tried to extort money from the buyer because he had two bonds is downright dumb.
The buyer is within their rights not to occupy the property until transfer takes place.
Ummm, just btw people, the SELLER dictates what occupational rental they expect and the BUYER says either YES/NO. Thats it!
So the fact that the SELLER dictated a higher rental tells me that he was not settling for "quick money" (as he could have made it cheaper).
Anyway, Anon, you will never get it when I say (again) "One month wont make or break a person or their bank account". Especially when you are dealing with houses at such high prices (cause people of certain calibre could afford that) *wink*
And if the house is sold/a done deal... trust me, any bank would give him the R10k *wink again* I was offered the same deal from the bank (with normal interest off course) and they would deduct the loan amount (and interest for 1/2 months) when the deal is through.
the seller has done a u-turn and said he would accept half of the occupational rent he requested at the first place but we refused. his loss!! our gain as we live rent free until transfer takes plaemountce.
the house was for sale for R3.2M but as he was desperate it dropped the price by almost R1M. he is in financial trouble and is borrowing money from his family so do not say (again) that "One month wont make or break a person or their bank account".
Do let your friends back home there are plenty more property bargains to be had in South Africa.
Yes, I am trying to sell my last remaining house in the beloved country! And for a lot less than 2 mil.
But welcome to the wacky world of South African property dealings.
Some points :
1. Property transfers in S.A. always take longer than you think they will.
2. 2 January 2009, as a transfer date is nonsensical, other than to indicate the seller wanted to receive funds after the first of the year. But you cannot have a transfer done on the 2 January ... everybody's on holiday. Even if the Deeds is open, the bond canncellation attorney is not going to appear this week nor do I think the conveyancing attorney. The conveyancers may have to wait until 5 January 2009 just to get valid rates clearances.
3. Once you get your settlement statement from the conveyancers on transfer which will list among other things how much interest you actually earned after they took their cut, will you please come back and tell us the breakdown from the seller's side. In other words, how much was paid to settle his bond? Now if the bond was settled for more than what you paid, i.e. the seller had to bring funds to closing, that's what I call financial distress!
4. Trying to get you to pay occupational rent for non occupation before transfer is a pretty funny gambit. Taking a chance.
5. Usually it's the buyers who stall to complete transfer but here's it's the other way around. Does this sound like a cc transaction? The tax year for individuals begins March 1, so why would the seller delay to 2009, unless his cost basis is below R 500 000 (not his level of indebtedness but what the value of the property would have been in October 2001 if the seller had owned it since or before then.)
6. Make sure you inspect the property with witnesses before transfer to make sure you're getting everything you paid for! Some people have a very "loose" interpretation of "fixtures".
7. Please let us know how much you paid per square metre of living space and in what general area.
In South Africa, are bathroom cabinets or shelves part of the fixtures? Do they have to be left by the seller? What is exactly the interpretation of "fixtures"?
I will say this again "One month will not make or break a person". A sensible person that is!!!
How convenient that now your plans have changed and he accepted your offer.
And you seem to know alot about his financial troubles (borrowing from family). Sure you also dont know what size shoe he wears?
And if you are staying at a friends for FREE, why on earth would you want to pay rent for a month?!!!! I mean, that one month can break you (according to you).
Sakkie, whose fault is it if the seller has chosen a bad conveyancer who has told us his financial situation? I am sure i could find out his shoe size through the conveyancer but quite frankly i am not interested. At the end of the day I am buying a house paying R1M less and pad cash for it. I am already planning to buy another house i saw at the weekend and again made an offer of R1M less. I shall hear tomorrow if it is accepted. Remember that cash is king!!
All it costs a bank to finance a house is to allocate 10% of your bond from their capital, the rest is created by your promise to repay the loan. This is called fractional reserve banking. Once you have paid that 10% through interest the bank has broken even, even if you and the house disappeared off the face of the earth.
They can accept whatever they like for their notes (actually its your promissory note) because 90% of it didn't actually exist until you came along and created it.
Perhaps you have heard of the economist John Kenneth Galbraith who said " The process by which banks create money is so simple that the mind is repelled."
when you save a total of R2M buying 2 properties i think i have to conratulate you. You have done very well especially when you paid cash and have no bond.
19 comments:
We have bought a house. The seller asked for the transfer to be on 2nd January 2009. We agreed as we were cash buyers and always had a place to stay for free. Anyway the seller thought that if the transfer did not take place on time, we would still move in and pay him R16000 a month rent to until the transfer. However we have told him, we are not moving before the transfer as we can stay rent free at our friends house. The seller is upset as he has been penalised on his bond and also has to pay the new bond for the house he already has bought, had R10000 expense for the electricity repair etc... As we felt sorry for him, we decided to offer him R8000 rent for the month instead of R16000 (we lose that money as we live rent free at the moment).
To our surprise, the seller refused our offer. So now he is going to have another month of expenses as the transfer we are being told will not be for another full month. And to think that the seller works in finances....it makes you laugh!
Holiday homes and smallholdings/ farms around Cape Town are also coming in for long overdue corrections. Here is the story of a smallholding of 18ha on Gumtree...
1st of September....
Beautiful smallholding in Baardskeerdersbos
Price: R 1,300,000
Date Listed: 01/09/2008
18 000 square meters
After 2 and a half months of no interest we have a cut of R300 000, just short of 25%...
Smallholding in sought-after village of Baardskeerdersbos
Price: R 1,000,000
Date Listed: 18/11/2008
Almost a month later and still no takers...
Plot in sought-after village of Baardskeerdersbos
Price: R 1,000,000
Date Listed: 14/12/2008
Time to shave a little more?
To Anonymous #1:
Sounds to me like the seller was using a sneaky way to increase the price of the house or recuperate some of his costs.
You shouldn't even have offered the R8 000 in the first place. You're under no obligation.
To Anonymous 1:
Whilst some/most sellers are "desperate", you must realise that not all sellers are desperate. Your attitude needs to change (and I am glad that the seller refused your rent offer - proves my first point above).
Dont make the assumption that the seller is desperate or that they dont have money... obviously the sellers actions proved you wrong ;)
All the best with your move!
the seller thought we were bluffing when we told him we were not going to stay and pay rent at his house until transfer day as we could stay for free at our friends house. He thought that there would be a delay of a few days in the transfer date but it now looks like one month. He also thought that by law we had to pay him rent even if we did not move in. It seems he was mislead by his conveyancing attorney. So now he is stuck with a house that will stand empty for one month, he will be responsible if squatters move in and he has all the bills to pay until transfer (water rates, sewer rates etc...).
Anon, unless you are moving into a place in Kyaletshia or Guguletu, I'm pretty sure that squatters wont be moving in, ever!!! And for the rental amount mentioned initially, I think its a pretty decent area!!! Even IF squatters moved in, they'd be removed faster than they moved in ;) We have laws that will take care of that ;)
Ummm... I was a seller before and as long as its a done deal, one month wont hurt that much. One month really wont make or break a person, their budget or their bank account. So all those expenses, for any seller, will be fine. Hehe!
You come across as sounding bitter. Maybe because you were hoping to stay for FREE in your new "to-be" home? Just my opinion!
no we were not going to stay for free in our new home. We are already living for free in a friends house in Camps Bay as he is living in our home in Germany so we both live rent free.
our seller has 2 bonds to pay, one on his house and on the house he has already bought. Furthermore we are getting a very good interest at 10.25% on our deposit as we bought the house for cash so the longer the transfer takes, the better it is for me. but we have been told by our attorney that the seller was counting on rent money from us as he is short of over R10000 already with the delay in transfer.
Most offer to purchase clearly state that if the buyer were to occupy the property prior to transfer, there would be occupational rental.
I fail to understand how the seller could confuse the term ''occupational rental''. If the seller tried to extort money from the buyer because he had two bonds is downright dumb.
The buyer is within their rights not to occupy the property until transfer takes place.
Ummm, just btw people, the SELLER dictates what occupational rental they expect and the BUYER says either YES/NO. Thats it!
So the fact that the SELLER dictated a higher rental tells me that he was not settling for "quick money" (as he could have made it cheaper).
Anyway, Anon, you will never get it when I say (again) "One month wont make or break a person or their bank account". Especially when you are dealing with houses at such high prices (cause people of certain calibre could afford that) *wink*
And if the house is sold/a done deal... trust me, any bank would give him the R10k *wink again* I was offered the same deal from the bank (with normal interest off course) and they would deduct the loan amount (and interest for 1/2 months) when the deal is through.
the seller has done a u-turn and said he would accept half of the occupational rent he requested at the first place but we refused. his loss!! our gain as we live rent free until transfer takes plaemountce.
the house was for sale for R3.2M but as he was desperate it dropped the price by almost R1M.
he is in financial trouble and is borrowing money from his family so do not say (again) that "One month wont make or break a person or their bank account".
Dear Anon aus Deutschland!
Do let your friends back home there are plenty more property bargains to be had in South Africa.
Yes, I am trying to sell my last remaining house in the beloved country! And for a lot less than
2 mil.
But welcome to the wacky world of South African property dealings.
Some points :
1. Property transfers in S.A. always take longer than you think
they will.
2. 2 January 2009, as a transfer date is nonsensical, other than to indicate the seller wanted to receive funds after the first of the year. But you cannot have a transfer done on the 2 January ... everybody's on holiday. Even if the Deeds is open, the bond canncellation attorney is not going to appear this week nor do I think the conveyancing attorney.
The conveyancers may have to wait until 5 January 2009 just to get valid rates clearances.
3. Once you get your settlement statement from the conveyancers on transfer which will list among other things how much interest you actually earned after they took their cut, will you please come back and tell us the breakdown from the seller's side. In other words, how much was paid to settle his bond? Now if the bond was settled for more than what you paid, i.e. the seller had to bring funds to closing, that's what I call financial distress!
4. Trying to get you to pay occupational rent for non occupation before transfer is a pretty funny gambit. Taking a chance.
5. Usually it's the buyers who stall to complete transfer but here's it's the other way around.
Does this sound like a cc transaction? The tax year for individuals begins March 1, so why would the seller delay to 2009, unless his cost basis is below
R 500 000 (not his level of indebtedness but what the value of the property would have been in October 2001 if the seller had owned it since or before then.)
6. Make sure you inspect the property with witnesses before transfer to make sure you're getting everything you paid for!
Some people have a very "loose" interpretation of "fixtures".
7. Please let us know how much you paid per square metre of living space and in what general area.
Good luck!
In South Africa, are bathroom cabinets or shelves part of the fixtures? Do they have to be left by the seller?
What is exactly the interpretation of "fixtures"?
" ... are bathroom cabinets or shelves part of the fixtures?"
Yes.
"Do they have to be left by the seller?"
Yes, unless excluded in the purchase/sale agreement.
What is exactly the interpretation of "fixtures"?
If it's nailed in or screwed in, it's "fixed"!
There are certain grey areas :
1. Gun safes (ubiquitous in South Africa) must be bolted in by law but are almost always removed by the seller.
2. Sat. dishes also should remain but almost always go upon transfer.
3. Interpretations vary between provinces : in the Western Cape, the stove always stays. Elsewhere, not always so.
Anyone else want to join in?
Anon,
I will say this again "One month will not make or break a person". A sensible person that is!!!
How convenient that now your plans have changed and he accepted your offer.
And you seem to know alot about his financial troubles (borrowing from family). Sure you also dont know what size shoe he wears?
And if you are staying at a friends for FREE, why on earth would you want to pay rent for a month?!!!! I mean, that one month can break you (according to you).
Get outta here and stop being a sour-puss! LOL
Sakkie, whose fault is it if the seller has chosen a bad conveyancer who has told us his financial situation?
I am sure i could find out his shoe size through the conveyancer but quite frankly i am not interested.
At the end of the day I am buying a house paying R1M less and pad cash for it. I am already planning to buy another house i saw at the weekend and again made an offer of R1M less. I shall hear tomorrow if it is accepted. Remember that cash is king!!
C'mon Anon, why are you holding back on what you paid for?
Paying a million less than the "ask" price is meaningless in today's and yesterday's market in South Africa.
What has some meaning are the reports from the auctions detailing that the banks are now willing to take a million less than their notes!
Sakkie,
All it costs a bank to finance a house is to allocate 10% of your bond from their capital, the rest is created by your promise to repay the loan. This is called fractional reserve banking. Once you have paid that 10% through interest the bank has broken even, even if you and the house disappeared off the face of the earth.
They can accept whatever they like for their notes (actually its your promissory note) because 90% of it didn't actually exist until you came along and created it.
Perhaps you have heard of the economist John Kenneth Galbraith who said " The process by which banks create money is so simple that the mind is repelled."
And another quote...
"The few who understand the system, will either be so interested in its profits, or so dependent on its favors that there will be no opposition from that class, while on the other hand, the great body of people, mentally incapable of comprehending the tremendous advantages...will bear its burden without complaint, and perhaps without suspecting that the system is inimical to their best interests." Rothschild Brothers of London communiqué to associates in New York June 25, 1863
If everyone in this country understood basic economics there would be riots in the streets
when you save a total of R2M buying 2 properties i think i have to conratulate you. You have done very well especially when you paid cash and have no bond.
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