PROCESS FLOW OF A INSTALLMENT DEED OF LAND SALE ("IDOLS")
1. Marketing & Sale of Residential Property
This part of the process to be undertaken by the Agent.
The marketing and sale process is similar to a conventional sale but is largely dependent on whether the seller is prepared to sell the property and receive payment of the purchase price and interest in installments over a period of time.
Thus, enquire from Seller as to whether IDOLS may be an option and if so the terms thereof ie. deposit, installments and repayment term.
Potential Sellers may include:
i. Distressed sellers for financial or other reasons ie. “buyers market” or property in poor condition.
ii. Sellers prepared to sell property and take purchase price plus interest (12% - 18% p.a) in installments over a period of time.
iii. “Bond Take Over” situation.
iv. Divorces whereby one spouse acquires the half share of the other, no bond or formal transfer until last installment.
v. Sellers interesting in selling to a purchaser that has a reasonable deposit, the balance to be paid in installments.
Once the agent identifies potential Seller and Purchaser (following a detailed inspection of the property by the Purchaser) the Agent may either negotiate and structure the deal, complete the Offer To Purchase and facilitate signature thereof, or request assistance from Crafford Inc. It is strongly recommended that Crafford Inc. be involved in the negotiation and structuring of the deal, so as to identify whether all legal requirements of Alienation of Land Act and are fully complied with, before signature thereof.
2. Negotiation and Structuring Component
This part of the process to be undertaken by or in conjunction with Crafford Inc. so as to ensure that all legal requirements of Alienation of Land Act and National Credit Act are fully complied with, before signature of the IDOLS Offer To Purchase.
This process involves a number of legal aspects that would normally be attended to by the transferring attorney:
i. Whether the National Credit Act is applicable or not, affordability and creditworthiness of the purchaser must be assessed.
ii. Deeds search to confirm ownership and any interdicts, also to determine whether the property is the subject of a separate title deed and any mortgage bond.
iii. Procure bond statement, rates account and levies statement, including details of any special levies.
iv. Ensure that the purchase price and interest is correctly calculated over the term of the repayments and identification of the date of the final installment.
v. If the National Credit Act is applicable, then ensure that the IDOLS Offer To Purchase includes the requisite terms, including the deemed offer and costs.
vi. Crafford Inc. to compile a costs quotation.
vii. Agree on a date of occupation and possession.
3. Signature of the IDOLS Offer To Purchase by the parties
Once the IDOLS Offer To Purchase is complete in every respect the parties may sign the agreement electronically.
4. Legal and Administrative requirements
Following signature of the IDOLS Offer To Purchase, Crafford Inc. to ensure that the agreement is properly and timeously implemented.
Crafford Inc to attend to the following:
i. Provision of COC (compliance certificate) by Seller.
ii. Payment or arrangements for payment of any outstanding rates, levies & services.
iii. Payment of deposits and commission.
iv. Ensure that all parties are notified and provided with a copy of the IDOLS Offer To Purchase.
v. That the mortgagee bank is notified and supplied with a copy of the IDOLS Offer To Purchase and the original title deed requested for endorsement purposes.
vi. That the purchaser is provided with a mortgage bond statement not older than 4 months from the date of sale.
vii. Endorsement of the title deed within 3 months from date of sale.
viii. Return original endorsed Offer To Purchase to the mortgagee bank.
ix. Ensure that the Seller provides Purchaser with annual statement of account.
x. Attend to transfer upon payment of final installment, or prior thereto if the property is sold by Purchaser.