Attorney fees, This is what you’re paying for
The home buying process doesn’t end with buyer and seller signing the contract. There are still a few steps after that, including the legal process of transferring ownership of the home to the buyer. Here, we explain what the process involves, and what you can expect to pay for it.
What are Attorney fees?
Conveyancing is the process of transferring ownership of the property from one person to another, or a company or trust; and the conveyancing fees are what the buyer pays the attorney who conducts this legal process. The fees form part of the extra costs that come with purchasing a property, but are worth every penny, as they cover a range of services.
Conveyancing fees vs transfer duty
Note that 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. As of March 2019, transfer duty is exempt for sales below R1 000 000 and is on a sliding scale thereafter.
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 2019.
For example, a property that is sold for between R800 000 and R1 million attracts a conveyancing fee of between R15 780 and R18 860 (source), exclusive of VAT, while bond registration fees for the bond registration attorney will be in the region of R17 320 exclusive of VAT, assuming a bond of R900 000.
Add to that, the conveyancing attorney will charge additional fees for every service they complete, from requesting cancellation figures to preparing relevant documentation, applying for rates clearance, transfer duty, and conducting deeds office searches.
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 the registration of the sale once it is lodged with the Deeds Office.
The information they will request includes details 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 have to file a declaration of marital status and solvency of both parties, noting each of their identification 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 their name.
Of course, conveyancing fees are something that occurs later in the home buying process. If you’re still at the stage of buying a property, bear in mind that Sourcemarts offers a range of tools that can help.