"I find it interesting that the costs of the mortgagee is shown as being so little! It obviously ignores the income the bank stands to make over the term of the loan.
I further find it of interest that the conveyancer's costs are then the least in the process, despite the critical role played by the conveyancer and the registration system, which affords security of title to the purchaser. While the conveyancer is constantly under assault by the public and the banks to reduce his cost! Which he finds ever more difficult to do in view of the erosion that has taken place over the last number of years.
There is no surprise that the agents reap the most benefit. And are seldom squeezed for reduction. But are quick to suggest to purchasers that they should negotiate reduced costs with the conveyancer!" ..........
"Instead of abolishing transfer duty in toto, why not just on the primary residence as with capital gains tax. Second and third properties are a luxury, and can attract tax as normal.
Could the primary residence not be exempted from the NCA as well - I understand that it is to protect consumers, but every person needs a place to stay.
If the consumer does not qualify for a bond on a primary residence, he is no better of because he still needs to rent a property, so it is not as if he is protected from overextending himself - he either pays a bond or rental. He needs to lay out the money anyway." ......
"The banks of course, besides the initial fees they charge for the bond , receive interest, so its just us poor attorneys who do ALL the work and receive a pittance. Not only that, but before, where it would take one letter or one phone call to receive cancellation figures, or clearance certificates , or whatever, now we have to make five phone calls, or write innumerable times and we STILL are obliged to charge the same fees. Its no use saying the fee is only a a suggested one; if other conveyancers charge that we all feel we have do.
And for an estate transfer, well, try obtaining (a) Letters of Executorship (b) or the Master's approval to a 42(2) endorsement. The time my staff spend on the phone to the Master to obtain anything is unbelievable and quite shocking!" ..........
"Your breakdown of costs at least clearly shows who is the biggest shark in the water when it comes to the costs for purchasing a home - the estate agent. The State is not the biggest culprit in our property market.
You've not included the second commission being earned by the estate agent - that being the commission on the bond.
A first time buyer should also bear in mind that an estate agent never ever "discount" the commission - least of all when the times are tough.
The conveyancer gets squeezed to discount fees. It is never disclosed to the purchaser that the big 5 [banks] have passed the bucket to the conveyancer who must now also do the lion's share of the bank's paperwork. The conveyancer therefore now carries the biggest responsibility.
What a first time buyer should do is:
1. Look at the commission of the estate agent, bearing in mind that the commission is included in your purchase price and you'll therefore end up paying 25 - 30 years interest on a commission which should never have been made part and parcel of the purchase price. Should the estate agent refuse to disclose the commission, then you move on there are always other properties to buy;
2. bear in mind that the estate agent also gets a second commission - your bond.
The estate agent therefore could end up earning approximately R100 000,00 commission [p/price R1mil and bond R800 000.00]. Who is now laughing all the way to the bank?
We should never have allowed a system whereby the commission becomes part and parcel of the purchase price - this should be dealt with separately between the seller and estate agent. The purchaser will then at least only repay the actual purchase price, especially on a 100% loan."
Finally the issue of VAT on residential developments was also raised.