 Good evening and welcome to episode 344 of the Private Property Podcast. I'm your host, Uzaman Dhomwa Kumalo. It's a Monday edition of the Private Property Podcast. If you join us for the first time, welcome to the family. You're attuned into the only daily property podcast in South Africa, helping you in your property journey, and certainly helping you make better property decisions. And of course, to many of our viewers, whether you're watching Facebook, on YouTube, or of course on Instagram, welcome back. You know how we do it. Every single weekday, you and I have an appointment at 7pm, where I'm always in conversation with a property expert who helps us navigate our property journey. Doesn't matter where you are on your property journey, whether you're looking to buy, to sell, to build, or you're still a tenant and want to best navigate your tenant journey. This is your one-stop shop on both things relating to property. And talking about all things relating to property, you can of course catch amazing shows across private properties, social media platforms, every weekdays at 8pm. As it is on Monday, you can catch Chad on the Home Shoppers show. And that comes to your screens every Monday and Thursdays at 8, Mondays and Fridays rather, at 8pm. And every Tuesdays and Thursdays, award-winning farmer Unbalunogot brings you the farming podcast, where she tackles all things agriculture. And on Wednesdays, Esti Klassen brings us the first time Home Buyers show, which is always in conversation with people who not only walked that first time buying journey, but have gone on to grow their property portfolios from strength to strength. But those are the great shows that you can look forward to every single evening, all right here on Private Property, at 8pm. Be sure to tune in, engage with us, especially on our social media platforms. If many of you know, we are of course running a great competition on our Facebook page, where you can send a chance of walking away with 500 grand cash every single evening. And all you have to do to send a chance of walking away with that cash is to firstly, you know, engage with the pinned post on our social, on our Facebook page, where we set a bold goal of reaching 20,000 comments. And if we call your name during the live show right here, with myself as Amandumwa Kumalode, you have to drop us a message down here below to claim your prize. You have to claim a prize while we are live on air. And if you don't, the money goes into the money bag and rolls over to the following day. That's how you can send a chance of walking away with cash prizes right here on Private Property. And of course, we absolutely love hearing from you. So do keep the love coming, drop those green hearts down here below, especially on Facebook. And of course, share the lab with your friends and family across your social media platforms. I can already see some of our top 10 gang members, Mother Shivane is watching, Wangani, Queen Bee, Mahbonda is watching, Glechurinda is watching, Moe Rosentwane is watching, Gloria, Mumboise is watching, Tasmin, Abdullah, Nelda, Everton, Michelle, Bomerance, Vanessa, Nell. I see you all on Facebook. So certainly do keep those messages coming on our Facebook page. Now, this evening's conversation is one that I think so many of us, especially first time home buyers, who are not very familiar with the home buying journey, the different steps, and really being mindful of what you need to know along the way. This is a conversation that you're going to find very useful. We're looking at understanding the bond registration process. Basically, we'll be looking at what is it? I think many of us, and I always share the story because it happened to me who did all her research. We tend to not know that there's the bond registration process, A, what it means, if there are any financial implications, and if there are typically, what does it amount to, and who does the payment, and who's the payment made to. And one of some of the do's and don'ts when it comes to the bond registration process, that as viewers at home, we need to be mindful of. That's some of what we'll be tackling this evening, and to help us get a bit of sense of the bond registration process, and everything we need to know when it comes to them joined by a founder and managing director at Innisfull, Incorporated. No, good evening. And thank you so much for joining us again on the show. Thank you so much for having me. And hey, hello to all your viewers. Glad to see that a lot of your viewers keep coming back onto your podcast, I guess, when you are doing something right. We certainly are doing something right, and I think the viewers at home keep asking us for more, and we're definitely going to keep giving them more. And part of the right things that we're doing is helping people better understand their home ownership journey from beginning to end. And I think it's one of those things that we can never tire talking about, because there's just so many different components, and sometimes situations are slightly different, and we really want to empower the viewers at home to be able to make better decisions armed with all the facts, and of course, be able to also negotiate whether it's with attorneys or the purchase price, and all sorts of things. But of course, this evening, when we were looking at the bond registration process, before we even look at the do's and don'ts and the interpreties, when we talk about the bond registration process, what exactly are we referring to? Okay, so let's say I'm buying a property from you, Simon, and your property is worth 3 billion yen, okay? And I do not have 3 billion yen in my bank. Not all of us have, you know, those kinds of funds in our bank account. I would then have to apply to a bank or find somebody who's willing to borrow me that money in order for me to secure your purchase price of 3 million yen. So you would then enter into a mortgage bond, meaning that a certain party gives you funds, and that creditor will then, again, security or the security of the purchase price from the property that you will own. Very important step to note, you cannot enter into a mortgage bond for a property that does not belong to you. So the property has to be registered in your name. So that's why if you are wanting to buy a mortgage bank, normally you would approach your bank and they would give you these funds in order to secure the purchase price and as security for that debt, they will be registered in your name. So your question was then, what is a mortgage bond? How does it help with the bank? Basically, after the bank gives you the funds, they need security for the funds that they will actually get the money, their money back. So what the registration of a mortgage bond with the two things that they have, number one, they give the bank or the creditor any third party who's been able to enter this money, a preference of any other creditor that you may have. So they would then have a real right of execution or a real right to sell your property in order to get their money back. And secondly, I just restrict the data. So being me who bought the property with the money that was borrowed from the bank or from a third party, it restricts me from selling that property without you knowing. So yeah, basically it pays that role, that is essentially what a mortgage bond is. Typically a bank will enter into an agreement for the bank for a period of about 20 years. So that that home loan agreement then is signed with the conveyance of the lawyer that's been instructed by the bank before the mortgage bond breaks in the end of. So let's just take a step back. How would you even get to that point of registering the mortgage bond in the end office in favour of the lender being the bank or any other third party? So Rama, I see your beautiful property, it's for sale, it's million rand and I don't have million rand but I know that I can afford to pay this money over a period of 20 years or even maybe less. Maybe I don't have it right now but I'll have it even maybe in five years time. I would have paid off the whole day. So but I don't have it right now and you are selling it a property to me right now. So we then typically enter into a sale agreement, you and I, where we both agree that I am buying your property for a certain price and even number one, I'm going to pay you with a certain deposit. Maybe I have a deposit of maybe a $0.18 of the three million rand or I don't and yeah after we've signed that sale agreement, I then approach my bank or also what typically happened and I know a lot of people have experienced this and maybe they didn't understand it or they've heard of it, where you've approached an estate agent and you know the property is on the market and the estate agent is advertising it on half of the seller and the estate agent tells you, often told that the estate agent doesn't actually have the cash on hand that you're wanting to secure a mortgage fund, they will be able to refer you to a bond originator and a lot of my bond clients always ask me, no, I'm not using a bond originator, I have to pay for that, I'm going to increase the monthly repayment that I'm going to have to make to the bank, very, very important to know you are not going to pay that mortgage bond originator, the mortgage bond originator is paid for by the bank as well. Okay, so it's a commission that the bond originator gets from the bank once they have basically secured the client for the bank, it basically eliminates a whole lot of marketing for the bank, so they basically have met your application to maybe up to like nine different banks and whichever bank gives you the best interest rate or the best repayment term you typically go with them, so I think it's very important. I want to just come in and interrupt you there for a moment, of course, to our viewers at home, I want to find out from you, when you started your home ownership journey, during your home ownership journey, did you know about the bond registration attorney? Because I think Ndungu Milaleu has highlighted so well, firstly just what a bond is and of course that you'd be working with a convencer, that would typically be called a bond registration attorney and as she highlighted, they're the ones who would be, they'd get the instruction, they'd be, I would say hired by the bank or the instruction would be coming from the bank side, they appoint the bond registration, so the bank makes that appointment, so you're not going to say, I know who's been by me, I want them to be the person handling the bond registration side, that would typically be coming from the bank, they use attorneys that are part of their panel and they're different kinds of attorneys that are on their panel, they're depending where you are in the city, where you're buying, they try to actually get you as close as to that part of the world as possible, so they really do have a wide variety of different firms that they work with when it comes to the bond registration side, so Ndungu Milaleu, I think when we then look at the cost factor of this, because a lot of first-time home buyers tend to not budget for this, many viewers at home who watch the show very regularly know the story I share about my own home ownership journey when I was a first-time home buyer and how I had done all my research, read up all sorts of things and as far as I knew, I knew there was an attorney who handles, we'll call it the overall transfer, because I looked at it as one umbrella thing, so I knew I had to budget to pay lawyers and unfortunately at the time I thought I only had to pay one lawyer per property, not knowing that if your property is going to be bonded, you essentially have to budget for two attorneys, the bond registration attorney, the transfer attorney and at the time I was buying two properties at the same time, and so when the third invoice came and hit me, I was beyond shook, I thought I was being scammed, I honestly thought somebody had cloned my identity or gotten my details and I'm getting this invoice, then a fourth invoice comes in and I go to myself what is going on, because this is now also another attorney, I don't know who these people are, and it really took one of the attorneys sitting down with me and explaining that well, this is actually what's happening, this is why you're getting a third and a fourth invoice and I also had to make the payment, so I think a lot of us tend to not budget for this one and I think I was fortunate that I was able to cover that bill, but I think not everybody at home will be able to do so and it's important that then from the onset we're able to budget accordingly. When we look at the costs associated with the bond registration attorney, what kind of figures are we typically looking at? Because I think people also don't quite have a sense of how they should go about budgeting for that line item. Okay, so I'm just going to take a step back on what you said on my initial spoke about the fact that the bond attorney, the bond registration attorney is instructed by the bank because those attorneys would be on the bank sitting on the bank's channel, so the bank will facilitate that process and they'll typically instruct an attorney that is closest to you. Also, very, very important for us to know that if there is a grant, there is a certain attorney that is sitting on that bank's channel that you are going to be getting a bond. It is well within your control to the bank, remember that. And thank you very much sir. I've used NX to do NX before and I'm very, very happy with using NX for my bond registration process. Can you please just check if she's on the panel? Because that is the conventional bond registration attorney that I would like to work with. You typically find that maybe you would have a certain relationship with that certain attorney that you've been cruising in for a very long time and the cost, maybe there'll be a bit more favorable, maybe they'll give you a nice discount. So please always make sure that you inquire with your bank whether a certain attorney, if you'd like to use them, is on that channel because it is well within your right to assist in chess and just ask the bank to instruct them that specifically. So now let's move on to the cost factor, how much are you going to pay? So there are typically three attorneys in a normal convention thing, a transfer of an bond person. So I'm just going to break it down quickly. So it would be the one cancellation attorney, but that's paid for by the seller. So it was the purchase, so you don't have to worry about that cost. So and then it would be the transfer attorney. Transferring attorney is the attorney that has basically been instructed to attend to the transfer of the property. So it's a transfer of the property from Usana to me because I bought the property from you. Now because I did not have the fund and I have gone to the bank approached the bank to get a mortgage bond in a third attempt to get constructed being a bond registration. So if I had those funds and I did not approach the bank or any other third party for the mortgage bond, the bond registration team wouldn't be in the email thing, but now they are. So how the bond registration fees would be calculated, their fees are based on a tariff. Now that tariff has been paid by the Law Society of South Africa. So depending on how much you are wanting from the bank, that will then tell you, you will then know how much you are going to pay, you are more or less how much you are going to pay. So just like your typical transfer fees, your bond fees are also dependent on, it's not just one set fee, it will just depend on what the amount you are looking to borrow is and that is how much you are going to pay. So you will pay for the bond registration cost, the cost at the needs office to register the bond, the electronic instruction fees you have to pay for, because they are generally constructed by the bank, it's a system that the bank sends it to the museum. So all of those costs will have to be bought. And I saw that Unupamila Law also didn't directly answer it in terms of your budget between 5,000 and 10,000 and I think the reason is as she's put out that it isn't a blanket answer, there are various line items and it also does depend on how much the bond amount typically is. So this is a cost that you're able to negotiate. I know that on Private Property's website, so you can go to www.privateproperty.co.za and one of the calculators that you're able to use is around looking at from the legal side, what kind of costs are you looking at for the transferring side and for the bond registration side. So definitely make use of these free tools, they are there so that you're able to base the budget along your home ownership journey. We're going to go for a quick break and when we come back, we're going to then be looking at who, we already know that you as the purchaser are the one who's going to be making this payment, who are you making it to and what are some of the do's and don'ts when it comes to the bond registration attorney. We're going to go for a quick break and see who the lucky winner is this evening on our daily competition and I hope they're watching so that they can claim their price. Let's see who's going to walk away with that. I think it's 1,000 around this evening in the money box. We'll see you in just a moment. And the winner this evening of the daily cash prize goes to Amaze Mopi. Amaze Mopi, you are this evening's winner. I hope that you are watching us live and if you are then do drop us a message down here below to claim your prize. I think I'm going to wait for my colleague girl to let me know what amount is in the money box. I don't want to say it's 1,000 but it was actually 500 rounds. Yes, it is 1,000 rounds that is in the money bag. So Amaze Mopi, if you are watching us then do drop us a text down here below to claim that 1,000 rand cash prize. And of course this evening we are in conversation with Unumbo Malelo, who is the founder and managing director at Ines Tulu Incorporated. And we're looking at understanding the bond registration process. So if you want to avoid the mistake that I made when I started off on my own home ownership journey of not adequately budgeting for the attorney fees and this is holistic from your transferring attorneys to your bond registration attorneys, this is certainly the episode that you want to make sure you don't want to miss out on. Then really just getting a better understanding of what the process entails and who does what. And of course what are some of the do's and don'ts when it comes to all things bond registration process. And Unumbo Malelo, I want us to then look at now clear that it's a purchaser who makes this payment and as you're explaining before the break, who are they making it to? Because as I was saying earlier when I was showing my own mistake when I was starting off was that when I got that third invoice and when I got that fourth invoice, you're obviously getting this invoice, you've got the bank details and as a part of you that is also a bit wary because you're thinking okay who are these people. But now even if you're clear that this is an invoice that's coming, who are you making the payment to? Are you sending the payment directly to the bond registration attorneys or is this a payment that you would put to the transferring attorneys who then pay the bond registration attorneys? Okay, so you make that payment to the bond registration. So the transferring attorney will give you their own invoice for the transfer that they're attending to for you, which you will pay directly to the transferring attorney. You will then get a second invoice from the bond attorneys, the bond registration attorneys and you will pay those costs directly to them. As we stated earlier and that those costs like you can never give a client a exact figure of how much they're going to pay because the guideline that is used to determine those costs changes almost really, so you need to be cognizant of the fact that it changes, the guideline changes all the time and you're going to have to make those changes at the front before the transfer and bond are registered in the lease office and this is what touches a lot of people of God because a lot of people think oh okay yeah so I think I'm going to arrange for my bond and maybe fall into the bond repayment bank or I'll pay it sometime after after you know the bond is registered. No, you have to pay it before so you're going to have the transferring attorney calling you up like hey what's going on you know the seller wants to register this property and you're like you know I still have one bond attorney cost to pay for so like you said before the break is on a piece piece piece a lot of a lot of a lot of the 20s have have the have the condensing cost calculators on the on the website I have it on mine private property has the conveyance and cost calculators and what's nice even on on your private property website summer I've noticed that even on a on a sectional property you guys go even further you know and we talk about what they're going to pay more less for a specific amount and then you go even further and you tell them and for ladies you are looking at paying you know this amount for ladies and and for rates you're looking at paying more less this amount so that you know that okay over and above the repayment amount that I'm going to be paying to the bank every month I've also got ladies to pay for office of this amount and I've also got um and then you think again maybe the utility the electricity and water will probably be around this much and also if you're not sure if you can't find that I'll just ask a transferring attorney or ask the the the bond registration attorney because the transferring attorney and the bond registration attorney they work together um you know ask them you know make those inquiries you know but the managing agents even like you know ask them how much how much am I looking at paying a lady so that so that you know you know you you you have to know okay so you'd rather be safe than sorry because when those when those fees are required it's normally at a time when you don't very very stressed it's quite difficult to concentrate you've lost a whole lot of money and now you're thinking to yourself oh my goodness what have I done I did not realize that I would have to take so much money like within a space of two months even or even a month and a half you know you've had to you know part of the deposit you've had to part with the transferring cost you had to part with the bond can over the bond registration cost you know it's just so much you've had to part with a rate uh a clearance assessment figures you know for some municipalities where the purchase I would have to pay upfront you know so you end up paying so much money that you didn't even budget for um so just to go on to this uh convenient cost indicators look at what you would pay more or less for that more and what you would pay more or less um for that transfer so that you know also another thing that I have to state that I see with a lot of my clients so if you if the purchase price is worth a million right but you have a deposit of 400,000 dollars so you then approach the bank for uh a loan of 600,000 okay the mortgage bond costs okay are not going to be for a million because that is not the amount that is being registered uh for the mortgage you're going to pay mortgage one plus one 600,000 and paying the the money that you have borrowed from the bank so the bank security will be for 600,000 right so they're not going to charge you uh so you're not going to be paying costs uh that are above for an amount above what you have borrowed or what you have borrowed from the bank or from any other third party okay so when you're looking at the convincing cost calculator please bear that in mind because a lot of people say they're thinking sure you know and they end up even not even buying a property thinking yo I kind of bought this not knowing that no you're only paying um cost the bond registration cost based on the amount that you bought okay and I think and I think you know the the the big thing there then becomes uh also budgeting well ahead of uh when you make that purchase because as you are rightfully pointing out that there's so many costs and they stack up right and they come uh at a time more often than not when you're not ready the amounts are such that it's not the kind of money that you would you know have just lying in your bank account unless you are deliberately saving towards it so it becomes very important to be intentional when you sit out to buy a property is one of those things that to wake up one day and say okay I want to go sign an offer to purchase and secure the financing and and you really do not want to do that at all I'm going to slip in a comment here from Umeens Bouteliz on our Facebook page saying G's the bond registration attorneys add some unnecessary items in the cost they might as well add money for their shopping screen and I'm actually saying net you look at some line items and you go like really I mean though I and I've I've looked at from both sides right the transferring attorneys and the compensation attorneys and some of the line items I think too many of us we think oh my word like why why is the postal you know amount why why all this money like we can exclude all of this money and stuff but as the nature of the business I guess for a lot of attorneys or part two financial saying it's a lot of money just for registration and it's it's something that we need to bear in mind because you don't want to make the mistake of not having adequately budgeted because more often than not by the time we're getting to bond registration stage the the the matter is so far in that if you then decide to pull out the you're still going to have you know financial complications and implications so rather have the money upfront that you have saved up for so that you don't find yourself further down the line unable to make some of these payments now before I let you go with running out of time what should we not do because I think we've done such a great job with some of what you should be doing what you can look out for what should we not do and during the bond registration process that could potentially jeopardize you know either us getting the the home loan ultimately um or just jeopardize the process in itself okay so um as you mentioned earlier on is that once you've signed that settlement right the bank um then looks at that settlement and then they weigh up your credit readiness and they check your affordability um then look at everything basically when it comes to your your assets of your assets and liabilities so you need to make sure that you do not now go out and get more liabilities on or more big things no loans okay no panicking thinking oh my god i'm going to move into my brand new house let me go on the shopping spree i need a brand new huge tv and a huge uncredits yeah on credit yeah you do not want to do that so many kinds have found themselves or my kind has found themselves in that situation and it has not turned out well for them so please please please do not go out to get any kind of loan anywhere and or or go on major shopping sprees on credit like you said grandma it's the worst thing you could possibly do for yourself do not add on to that expensive list because the bank has haunted you that loan based on your assets and liabilities and if you increase those liabilities um you're more likely uh you know to not be able to repay the the the to repay the bank the the money that they that they want from you every month in terms of the loan that they think so no loans please nothing on credit just the types and wait for it to wait for your transfer and what you want to register and then and go on a major shopping spree yeah and and and we're going to leave it there this evening non-promenia that was absolutely a great great insight and also great tips i think i want to echo that last one because i've also heard of far too many instances where somebody's in the middle of a transaction and as you say you know they excitedly sometimes take up credit whether it's for items that they want to put in the new place or sometimes they hadn't budgeted well and then they want to take an additional line of credit to you know cover whatever shortfall they fund themselves in and unfortunately that does jeopardize the the you're you know getting the home loan so you don't want to put yourself in a difficult position during that process because more often than not when a bank gets wind of it perhaps at the time you had a hundred percent ltv and they realize that wait this person has gone on and taken a hundred k with of you know credit and they can come back and review and say no based on the new availability and the new facts you've got it maxed out that a hundred k you now we can now only you know extend let's say 80 ltv so you really want to be careful of that as much as possible we are going to leave it there this evening thank you so much for joining us on the show thank you so much for having me and thank you so much and that is who's the founder and managing director at Innis Incorporated wrapping up the Monday edition of the private property podcast with myself I don't leave you alone it's a Monday so you can catch the the home shopper's show I need to set the first time home by so the home shopper's show with child at 8 p.m I'll be back on your screens tomorrow evening at 7 p.m until then hope you stay home and stay safe