Understanding South African Property Terms - Made Simple by LWP Properties
Buying, selling, or financing a home is one of life’s biggest milestones - but the process often comes with confusing terminology.
At LWP Properties, we believe knowledge builds confidence.
This guide breaks down the most common South African property terms, helping you understand every step - from applying for a home loan to signing your Offer to Purchase.
Home Loans & Bonds Explained
Bond / Home Loan
A loan from a bank or financial institution is used to buy property. The property itself serves as security for the loan until fully paid off.
Principal Debt
The original amount borrowed, before interest is added.
Interest Rate
The percentage charged by the bank for borrowing money. Your monthly repayments depend on this rate.
Prime Rate
The base lending rate set by the South African Reserve Bank influences what banks charge on home loans.
Deposit
An upfront payment made by the buyer, usually 10-20% of the purchase price, which reduces the loan amount.
Access Bond
A flexible home loan that allows you to deposit extra funds into your bond and withdraw them later. However, the borrower will need to reapply before they will be able to withdraw amounts, facing affordability checks and possibly new loan terms.
Pre-Approval
A written confirmation from a lender that you qualify for a specific loan amount, giving you confidence when house hunting.
Repayment Term
The period over which the bond is repaid is commonly 20 – 30 years in South Africa.
Amortisation
How your loan is gradually paid off over time through scheduled repayments.
Fixed vs Variable Interest Rate
- Fixed Rate: Interest stays the same for a set period.
- Variable Rate: Interest changes with the prime rate.
Early Repayment
Paying extra into your bond to reduce the total interest and settle your loan sooner.
Transfer & Bond Costs
Attorneys' fees to be paid in order for them to attend to the registration of ownership in the Deeds office, which consist of the legal fees and transfer duty payable to attend to the transfer, and bond registration fees, which include the legal fees due to the attorneys to attend to the bond registration process.
Initiation Fee
A once-off administrative fee charged by your bank when registering a new bond.
Property Sales & Listing Terms
Mandate
A contract between a seller and an agent giving permission to market and sell the property.
Sole Mandate
A contract in which a property owner appoints a single estate agent as the only authorised party to market and transact the property for a specified time.
Open Mandate
Multiple agents can market the property at the same time with the seller’s authority
On Show / Show Day
When a property is open for public viewing, often on weekends.
Offer to Purchase (OTP)
A written legal agreement from a buyer offering to purchase a property under specific terms and conditions.
Acceptance
When the seller signs the OTP, creating a fully concluded agreement subject to the specific conditions.
Suspensive Condition
A clause that makes the sale conditional on something happening, for example, the buyer obtaining bond approval, upon fulfilment of which the OTP becomes a legally binding contract between the parties.
Deeds Office
A government office that records property ownership, bond registrations and Notarial registrations across South Africa.
Transfer Duty
A government tax payable on the purchase of property above a certain price threshold.
Sectional Title
Ownership of a unit within a complex or building, along with shared ownership of communal areas.
Full Title / Freehold
Ownership of both the building and the land it sits on.
Body Corporate
A management entity made up of sectional title owners that oversees maintenance and rules of the complex.
Buying & Selling: The Process Simplified
Valuation / Appraisal
A professional estimate of your property’s market value by a certified valuer.
Comparative Market Analysis (CMA)
An estate agent’s report compares recent sales of comparable properties to determine a realistic listing price.
Commission
The agent’s professional fee is typically a percentage of the final sale price.
Conveyancer
A specialist attorney who oversees the legal transfer and registration of property ownership and bonds.
Bond Originator
An expert who compares multiple banks to secure you the best possible home loan terms at no cost to you.
Voetstoots Clause
An “as is” condition means the buyer accepts the property in its current state, including any hidden defects, unless misrepresented.
Compliance Certificates
Official certificates verifying that the property meets electrical, gas, backup systems/solar installations, plumbing, and pest-control standards required before transfer.
The Property Industry - Key Concepts
Listing
The process of advertising a property for sale or rent through an agent or online platform.
Showhouse
A property open for viewing, typically on weekends, to attract potential buyers.
Rates & Taxes
Municipal charges for property ownership and local services like water, refuse removal, and sewage.
Title Deed
The official legal document proving property ownership, held by the bank if a bond is registered over the property or by the owner of the property if the property is not bonded.
Capital Gains Tax (CGT)
Tax payable on the profit made when you sell your property, subject to the relevant thresholds as updated by SARS.
Private Sale
A property sale managed directly by the owner, without using an estate agent.
Common Industry Abbreviations
Abbreviation | Meaning |
OTP | Offer to Purchase |
CMA | Comparative Market Analysis |
PPRA | Property Practitioners Regulatory Authority |
HOA | Homeowners Association |
FNB / ABSA / Nedbank / Standard Bank | Common home loan providers |
Final Thoughts from LWP Properties
Understanding these terms will help you make informed, confident decisions throughout your property journey. Whether you are buying your first home, investing in property, or selling to upgrade, our experienced agents at LWP Properties are here to guide you Beyond the Sale - with clarity, professionalism, and care.
📞 Contact LWP Properties
Tel: +27 11 468 5900
Email: info@lwp.co.za,
Regulatory Authority (PPRA).
