Would you buy a house in your pyjamas? It's actually a serious question for the property industry to grapple with as it automates some of the most complicated documents and most expensive transactions most of us will ever deal with.
The idea that homebuyers could file mortgages and transfer their homes while sitting at a PC is not just an intriguing concept: it's one that could deliver major cost savings to an industry -- including the government aspect of that industry - that is still incredibly paper bound, despite technology's impact on documents, forms and workflow.
While the "easy stuff" is being done electronically - such as mortgage applications and matter tracking, selling a home is still difficult to do electronically.
Technology, standards and laws
Technology, standards and legislation are converging to make the process more seamless than ever with the use of document-generating software, electronic signatures for security, workflow planning, and integration tools. Legal barriers to transactions involving electronic documents have fallen in recent years with the passing of legislation such as the Electronic Communications and Transactions Act 25 of 2002.
Fewer employees
The benefits of automating a property transaction are self-evident and include:
- faster processing;
- lower costs;
- improved productivity;
- fewer data entry errors;
- fewer problems with document fraud, and
- less worker injury arising from carpal tunnel syndrome.
Reader Comments:
Your “GhostDigest” is excellent. It is very beneficial to read overall. Congratulations ! Some of what you publish there however can only harm your excellent business name. The one article “Buying a house in pyjamas” dated 11th November 2004 is so reckless as to be the grossly misleading to the reader. Hopefully the reader also notices the article “E-System by 2006” relating to the English System under the E-conveyancing heading on your website. That system would be excellent but the one dreamt up by yourselves under “Buying a house in pyjamas” is so unrelated in general to commercial reality that it is absolute rubbish.
First of all, it mixes up the purchase with the subsequent transfer process during which the Title Deeds get registered in the Purchasers name in the Deeds Office. The article is vague and impractical. The entire mortgage and lending system is based on the inviolate security of the Title Deed registered in the Deeds Office. This conveyancing process is backed up by Trust accounts, Fidelity Fund cover and independence of the conveyancer etc etc. Naturally we are all in favour of the actual process of transfer after the sale to be electronic but certainly not done by each Purchaser in his pyjamas.
He is not an independent person and just the thought of that indicates that the writer of the article has no grip whatsoever on the commercial disasters which the different transfer and bond registration processes alluded to there would create. The view already accepted by the Task Team and presented to the Minister of Justice is that it is in the interests of the public that conveyancing continues to be reserved to attorneys in private practice. The core of the successful argument put forward was our independence.
That is why we as an organization and the Law Societies will not rest until the minority of attorneys giving bribes for conveyancing work (whether directly or indirectly) are brought to book. Those bribes are crimes in terms of the Corruption legislation. Those receiving the bribes will also be criminals.
Thank you for your compliment about the GhostDigest. Yes, in retrospect the article is muddled, misleading and indicative of loss of grip, unrelated to commercial reality and etc. The object of this site is and will continue to be to posit the conveyancing attorney at the centre of the conveyancing process where he rightly belongs, and to promote his interests and vital role in the land registration system in South Africa. - Editor.
Oh my goodness!! Please keep this idea on hold until I reach retirement age, when I can sit back and watch and be entertained by the result. If it happened before I retire I'd be among those trying to fix the chaos that would ensue.
Conveyancing is already a high stress job,and made more so right at the first step, when estate agents complete Deeds of Sale with conditions which are impossible for the conveyancers to meet, (e.g., registration of transfer before the date by the which the bond must be granted), or conditions which the parties don't like but sign anyway and then expect the conveyancers to somehow change.
It's precisely because it's the most expensive purchase we ever make, that we need experts to take care of it. If you want to send money to your daughter in Peru you don't bundle banknotes up in an envelope and post it, you go to the Forex department of your bank and get a draft.
I've come across only 2 or 3 incidences of document fraud in over 25 years, but imagine your drug addict son selling your house out from under you, transferring it, and taking the money, or passing a bond over your home, all from your handy home PC. You can give instructions for payment to be made to anyone you like, and if you're doing so by PC there are no signatures to check.
Fewer data entry errors? Excuse me, but the people who do conveyancing documents are trained typists, everything they do is checked by the Deeds Office and rejected for errors, and the Deeds Office uses data capturers. There actually aren't many errors in Deeds Office data, but if that large mass of people who who barely know how to turn on a PC were doing their own transfers and bonds ........
One hears constant complaints that buying by credit card on the internet isn't safe. You may lose a few thousand that way, although I've personally never had a problem. But, you could lose your home by doing transfers, bonds, etc., on your home PC. Without signatures, anybody can do anything and who will believe you when you say "But I didn't do it." ? I don't believe Deeds Offices cost the government a cent, because of the enormous transfer duties paid. On top of transfer duty, you also pay a Deeds Office registration fee.
More and more duties are being delegated to the conveyancers by both the banks and the government, (e.g., FICA) but the largest part of the costs which the client pays go to the government, i.e., transfer duty, VAT, Deeds Office fees, rates.
All the paper is there for a reason - basically to ensure that the correct property is registered in the correct name, and the correct person gets paid for the property. There is, however, a lot of work involved in achieving this end. Preparing documents, having them signed, and submitting them to the Deeds Office, takes no time at all and is the easy part. What takes the time is getting ID's, etc., from parties, getting costs and balance purchase prices from purchasers, getting beetle and electrical work done so that certificates can be issued, waiting on banks to instruct for bonds, waiting on banks to provide title deeds and cancellation figures, waiting on Municipalities first for rates figures and then for clearances, waiting for purchasers' sales to be ready for the deeds office so that their funds will be available, etc., etc., There is nothing simple about conveyancing.
Who cares... my wife and I are 25/26, have a combined income of a 5-figure sum monthly, and we can't even buy a shack. Even if I earned R20,000 a month, I can buy a flat in town if I'm lucky, and I'm not talking Sandton, we're only in Pinetown KZN! If we can't afford a place to live, and we're lucky that our rent is half of the going rate, then what hope do SA youngsters have???
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