Selling a House That Still Has a Bond

The short version

1. Give your bank notice that you intend to cancel the bond — as early as possible.
2. Sign an Offer to Purchase with your buyer.
3. Your bank appoints a cancellation attorney and issues the amount needed to settle the loan.
4. The buyer's bank (or the buyer) provides guarantees for the purchase price.
5. On registration day, your bond is paid off from the proceeds and you receive the balance.

Give 90 days' notice

Banks generally require 90 days' written notice before you cancel a home loan. If the property transfers before the notice period has run out, the bank may charge interest for the rest of the notice period — on a large bond that can be thousands of rand.

Because transfers typically take two to three months after the Offer to Purchase is signed, the simplest way to avoid the penalty is to give notice as soon as you decide to sell. Ask your bank how it handles notice if the sale takes longer than expected or falls through.

Three attorneys, one registration day

A typical sale with a bond on both sides involves three sets of attorneys:

• Transferring attorney — usually appointed by the seller; registers the property in the buyer's name.
• Bond cancellation attorney — appointed by your bank to cancel your bond.
• Bond registration attorney — appointed by the buyer's bank to register the new loan.

All three lodge their documents at the Deeds Office together, so the transfer, the cancellation of your bond and the registration of the buyer's bond happen on the same day.

What it costs the seller

• Bond cancellation fees — the cancellation attorney's fee, typically a few thousand rand, deducted from your proceeds.
• Penalty interest — only if you gave less than 90 days' notice.
• Interest until registration — your bond keeps running, so keep paying instalments until the transfer is registered.

These come out of the sale price along with any outstanding rates. What you don't pay when selling privately is agent commission — see how much that saves with the commission calculator.

Guarantees: how you know you'll be paid

Before transfer, the buyer must secure the price. If they're financing, their bank issues guarantees to your transferring attorney; a cash buyer pays the money into the attorney's trust account. On registration, the amount owed on your bond goes straight to your bank and the balance is paid to you — usually within a few days.

What if I owe more than the selling price?

The bond must be settled in full before the property can transfer. If the sale price won't cover what you owe, you need to pay the shortfall from other funds or agree an arrangement with your bank before you sign an Offer to Purchase. Talk to your bank early.

Selling and buying at the same time

If you're buying your next home, you can make your offer subject to the sale of your current one, or ask about bridging finance to access your proceeds before registration. Our Offer to Purchase guide explains suspensive conditions, and the seller's guide covers the full transfer timeline.