The stages of a purchase
- Search and initial investigation of the property.
- Due diligence on title, encumbrances, approvals and outgoings.
- Negotiation and execution of the sale agreement.
- Payment of the deposit and satisfaction of any conditions.
- Completion: payment of the balance and exchange of completion documents.
- Transfer and registration of the interest in the buyer's name.
Why due diligence is the critical stage
Most property problems that reach a lawyer are problems that would have been visible during a proper investigation. Verifying the registered proprietor, the nature of the interest, encumbrances, and whether the person selling has the capacity to do so is not a formality.
Where the property forms part of an estate, is jointly owned, or is held by a company, additional verification is needed regarding who may lawfully authorise the sale.
Costs to expect
- Legal fees for the conveyancing work.
- Statutory payments and registration costs associated with the transfer.
- Search and disbursement costs.
- Any outstanding rates, rent or service charges to be apportioned.
Common buyer mistakes
- Paying a deposit before any investigation is carried out.
- Paying money to a party other than as directed in the agreement.
- Relying on copies of documents provided by the seller without verification.
- Agreeing to a completion date that does not allow for realistic processing time.
- Treating completion as the end of the matter and not following registration through.
What to do next
Instruct an advocate before you commit funds. The cost of investigation at the outset is small relative to the value of the transaction and the difficulty of unwinding a defective purchase.