 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 really watching us on 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. We're always in conversation with a property expert who helps us navigate our property journey. Doesn't matter where you are in 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 all 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 a Monday, you can catch Chad on the Home Shoppers Show and that comes to your screens every Mondays and Thursdays at 8, Mondays and Fridays rather at 8pm. And every Tuesdays and Thursdays award-winning farmer Unbalunogot brings you the farming podcast that she tackles all things agriculture. And on Wednesdays, Esti Klassen brings us the first time Home Buys 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 or IT 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 rounds 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 I'm going to do more tomorrow then 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 watching. Glacierinda is watching Mo Rosentwane is watching Gloria, my boys is watching Tasmin Abdullah and Elder 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. You know, 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 what are some of the do's and don'ts when it comes to the bond registration process that as you know 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 Anupumila Lokulu, who's a founder and managing director at Ines Kulu Incorporators. Anupumila, good evening and thank you so much for joining us again on the show. Hello, Gramma. Thank you so much for having me and hey, hello to all your viewers. We are 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, you know, 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, you know, the purchase price and all sorts of things and but of course, you know, when we're looking at the bond registration process before we even look at the do's and don'ts and, you know, the the nitocrates 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 use and your property is with three billion rents. Okay. And I do not have three million rents 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 three million rents. So you would then enter into a mortgage bond meaning that a certain party gives you funds and that predator will then again security or the security of the purchase price from the property that you will own. A very important step to know. 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, you would approach a bank. Normally, you would approach your bank and they would give you 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 and how does it help the bank? Basically, after the bank gives you the funds, they need security for the funds that they will actually get the money they money back. So with the registration of a mortgage bond with the two things that they have the number one, they give the bank or the credit card of any third party that you've been able to enjoy this money preference or that any other credit card that you may have. So they would then have a real right to execution or a real right to sell your property in order to get their money back. And secondly, I mean I just restrict the data. So being me who bought the property with money that were 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 potentially what a mortgage bond is. Typically a bank will enter into an agreement with the bank for a period of about 20 years. So that that home loan agreement then is signed with the convent at the end of the lawyer that's been instructed by the bank before the mortgage bond reached 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 I see your beautiful property as to the 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. You know I would have paid off the whole debt. So I don't have it right now and you are selling it the 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 an 18 million 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 typically happen and I know a lot of people have experienced this and maybe they shouldn'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 then tells you often told the estate agent that you don't actually have the cash on hand that you're wanting to secure a mortgage bond they will be able to refer you to a bond originator and a lot of my bond clients always ask me, ah no you know I'm using a bond originator I have to pay for that or increase the monthly repayment that I'm going to have to make to the bank is 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 itself. 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 submit 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 who are viewers at home I want to find out from you you know when you start to be a home ownership journey or during your home ownership journey did you know about the bond registration attorney because I think Ndungu Mililo has highlighted you know so well the first you just what a bond is and of course that you'd be working with the convencer that would typically be called the bond registration attorney and as she highlighted they're the ones who would be and you know they'd get the instruction they'd be uh 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 you know that appointment so you're not going to say I know who's running by me I want them to be the person handling the bond registration side that would typically be coming from the bank they you know they use attorneys that are part of their panel and their different kinds of attorneys that are on their panel they depending where you are in in the city where you're you know buying they try to actually get you as closest to that part of the world as possible and so they really do have a wide variety of different and you know firms that they work with when it comes to the bond registration side so I think when we then look at the cost factor of this because I think a lot of first time home buyers tend to not budget for this I mean many viewers at home who watch the show very regularly know the you 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 will call it the overall transfer because I looked at it as it's it's one umbrella thing so I knew I had to budget to pay you know lawyers and unfortunately at the time I thought I only had to pay you know one lawyer per 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 the you know 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 you've gotten you know my details and I'm getting this invoice then a fourth invoice comes in I go to myself what is going on because this is not also another attorney I don't know who these people are and it really took one of the attorneys you know 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 for that line item okay so I'm just going to take a step back on what you said about 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 panel so the bank will try you know that well the bank will facilitate that process and you know they'll typically instruct an attorney that is closest to you also very very important for um uh uh viewers to know that if there is this uh a conference there was a certain attorney that is sitting on that bank's panel that you um are going to be getting a major bond it is well within speak to your consultant or to the bank remember and say to them listen um I I used an exclusive info and I'm very very happy with using non-committal polo um for for for my bond 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 um you typically find that maybe you would have a certain relationship with that certain uh uh attorney maybe you've been cruising in for a very long time and you know the the the cost maybe there'll be a bit more favorable maybe they'll give you a nice discount you know um so please always make sure that you inquire with your bank whether we're sitting at any if you'd like to use them as on that panel because it is well within your right system just and just ask the bank to instruct that specific okay um okay so now let's move on to the cost factor to how much are you right so there are typically three attorneys in and in a normal uh a convention thing uh a transfer and bond person okay so I'm just going to break it down quickly so first would be okay so it would be uh 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 right so and then it would be the transferring attorney transferring attorney is the attorney that uh has basically been instructed to attend to the transfer right um of the property so it's a transfer of the property from username to me because I bought from you okay 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 a bond registration fee so if I had if I had those those funds um and I did not approach the bank or any other third party for the mortgage bond the bond registration team wouldn't uh uh uh in in in the email things but now they are so um how the bond registration fees would be calculated um their fees are based on the tariff now that tariff okay has been paid by the law society of South Africa so depending on how much you are one from the bank okay um that will then uh uh uh tell you you will then know uh how much you are going to pay you're more or less how much you're going to pay so just like your typical transfer fees your bond fees are also dependent on it's not just one state fee okay it'll just depend on uh uh uh what the amount you are looking uh uh to borrow is and that is how much you're going to pay for the bond registration cost the cost um at the needs office to register the bond uh the electronic instruction fees fees you have to pay for because they are trained and get constructed by the bank with the system that the banks and their teams use so all of those costs will have to be bought and and and I saw that you know Pomela law also didn't directly answer it in terms of you know 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 um and it also does depend on how much you know the the bond amount you know typically is so this is a cost that you're able to to negotiate I know that on private properties uh 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 the 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 uh 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 you know who we already know that you as the purchaser are the one who's going to be making the 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 have 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 uh in the money box we'll see in just a moment and the winner this evening of the uh daily cash prize goes to Amaze Morpee Amaze Morpee 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 yen yes it is 1,000 that is in the money back so Amaze Morpee 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 uh with Ulu Bumilelo Ulu 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 holistically 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 Ulu Bumilelo I want just to then look at I mean we now care that it's a purchaser who's you know who makes this payment and as you're explaining before the break who are they making it to because as I was saying earlier and I was showing my own uh you know mistake and when I was starting off was that I when I got that third invoice and 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 um but now even if you're clear that this is an invoice that that's coming who are you making the payment to are you you know say I'm sending the payment directly to the the bond registration attorneys or is this a payment that you would you know put to the transferring attorneys who then pay the bond registration attorneys okay so you make that payment to the bond registration the 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 transfer attorney you will then get a second invoice from the bond attorneys the bond registration attorneys and you will pay those costs that we to them um as we stated earlier um that those costs like you can never give a client you know an exact figure of how much they're going to pay because the guideline that is used to determine those costs um changes almost really um you know so um you need to be cognizant or you need to be cognizant of the fact that um it it it changes the guideline changes all the time um and um they you're going to have to make those payments before the the the transfer and bond are registered in the deed's office and this is what catches a lot of people of God because a lot of people think oh okay yeah so I think I'm going to register 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 this this property and you're like you know I I still 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 their on their website I have it on mine private property has the condensing cost calculators and what's nice even on on your private property um website somehow 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 my office amount and I've also got um and 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 your 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 asking you know to make those inquiries you know with the managing agents even like you know and 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 uh 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 um and now you're thinking to yourself oh my goodness what have I done I did not realize that I would have to pay 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 with 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 purchaser 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 convention cost calculators look at what you would pay more or less for that more for more return 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 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 is 600,000 and paying the the the money that you have borrowed from the bank so the bank securities will be four then 600,000 right so they're not going to charge you uh so you're not going to be paying costs uh 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 shame 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 it no you're only paying um cost the bond registration cost and based on the amount that you bought okay and I think 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 set 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 Boutelez 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 looked at from both sides right the transferring attorneys and the bond registration attorneys and some of the line items I think too many of us we think oh my word like why why is there a postal you know amount why why all these money like we can exclude all of this money and stuff but it's the nature of the business I guess for a lot of attorneys or part two financials are 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 if the the matter is so far in that if you then decide to pull out 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 before I let you go it's 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 during the bond registration process that could potentially jeopardize you know either us getting the the home loan ultimately or just jeopardize the process in itself okay so as you mentioned earlier on is that once you've signed that settlement right the bank and then looks at that type of agreement and then they weigh up your credit readiness and they check your affordability and then look at everything basically when it comes to you your assets of your assets and liabilities so you need to make sure that you do not now go out and get more liabilities or more big things no loans okay no panicking thinking oh my gosh 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 on credit 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 go on major shopping sprees on credit but you sit grandma it's the worst thing you could possibly do before yourself do not add on to that expensive list because the bank has granted you that loan based on your assets and liabilities and if you increase those liabilities you're more likely you know to not be able to repay the to repay the bank 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 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 messed up that a hundred k you now we can now only you know extend let's say 80 percent 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 shoppers show i need to say the first time home buys with the home shoppers show with chad at 8 p.m i'll be back on your screens tomorrow evening at 7 p.m until then hope you stay at home and stay safe