Comparative financials covering a trading or working period of the latest two years;
A letter from their auditor confirming personal income;
If their financials are more than six months old, the bank will need up-to-date signed management accounts;
A cash-flow forecast for the ensuing 12 months;
A personal statement of assets and liabilities;
Personal and business bank statements;
Their latest IT34, which is confirmation from SARS that their tax affairs are in order;
Their company, closed-corporation (CC) or Trust statutory documents;
The ID documents of all their business’s directors, members or trustees;
Depending on the complexity of their application, it may also be useful to provide a short CV.
She cautions that its prudent for self-employed buyers to ensure that their financial affairs are in order well before making an offer on a property as it will not only improve their chances of approval it will also avert costly delays.
After the Offer to Purchase
“Once an offer to purchase has been made, time really becomes of the essence and mistakes are easily made in haste. Some errors are quickly remedied but others can’t be fixed overnight and this is when costly delays can occur.”
She adds that potential pit-falls for self-employed applicants are where their financial statements are out-dated and they do not have up-to-date management accounts; where they have not kept their personal expenses separate from their business expenses; where their financial and tax affairs are not in order.
Melissa Webb, a Partner and Conveyancer at Guthrie Colananni Attorneys, says: “In the event that the purchaser submits an incomplete or incorrect application, the bond will either be declined or granted with incorrect information which is then sent to the attorney attending to the bond registration.
“In the event of a grant on the incorrect information, the bond attorneys would need to apply for an amendment which could potentially then delay the bond registration and transfer process.
“In some cases, the seller may even elect to place the purchaser in breach for non-performance if the bond has been granted but is now being amended and the amendment causes a delay in transfer.”
Webb adds that in the event that the agreement of sale contains a 72-hour meet or beat clause, the purchaser needs to be even more mindful of ensuring that their finance is granted promptly.
“With a 72-hour clause the seller may continue to market the property until such time as the suspensive conditions in the agreement are fulfilled.
“The purchaser therefore has to deal with the possibility of another purchaser putting in an offer to purchase which is more favourable to the seller, which the seller can accept, subject to the first purchaser not waiving or fulfilling the suspensive condition within 72 hours of the new offer.”
Visser concludes: “The additional criteria for self-employed buyers is understandably daunting, however, with the guidance of knowledgeable and experienced property finance specialists and estate agents it’s possible to seamlessly navigate the potential administrative minefield. that acquiring your dream home entails.
Avoid the disappointment of losing your dream home through a declined bond application – or even being pipped to the post by another purchaser who is more organised by having all their ducks in a row and their finances sorted timeously.”