While agent’s commission is often one of the first cost considerations that sellers think of when it comes to selling their home, there are other costs that sellers and buyers need to keep in mind as well.
Trevor Sturgess, MD of Seeff Kibler Park, always encourages his clients to look carefully at the other costs involved with selling. He says besides agent’s commission, usually set between 6% and 8% plus VAT of the selling price, sellers will also need to pay the following:
1. Bond cancellation
This is the cancellation fee payable to the home loan attorneys representing the bank that is used. Sellers can save costs by letting the bank know that the property is for sale as soon as the property is listed. Your agent will be able to advise how.
2. Compliance certificates
These include the Electrical Certificate of Compliance (COC) and can cost anything from R1 200 upwards, depending on the amount of work that is needed. Also keep in mind that an electrical COC expires after two years.
Another certificate that the seller is required to provide is an Electric Fence Certificate that costs around R2 000 or more, depending on any work that needs to be done. If you received a certificate when the electric fence was installed this will suffice.
A Plumbing Certificate and Beetle Certificate are also required in some instances. These are to ensure that the plumbing is in order and that there are no insect infestations in the home. Cost is to be quoted for.
Calculate bond and transfer costs when buying a new home
3. Municipality final figures
As the seller you will need to pay around four months extra on your rates and services. You can, however, claim back a portion of this after the property has been sold.
4. Relocation costs and administration
Moving trucks, breakages, the administration of informing people of your change of address and taking days off work to co-ordinate the move should also be considered. Moving can add to your stress levels significantly.
5. Sectional title clearance figures from the body corporate
This could be a special levy which needs to be fully paid before the body corporate will issue a clearance certificate.
The followings costs are to be covered by buyers:
1. Transfer costs to the transferring attorney.
2. Transfer duty this is a tax to the government on properties over R900 000. For example, buying a property of R1.5 million with a 100% home loan will attract transfer fees of around R88 000.
3. Bond attorney fees - the buyer must pay the lawyers handling the mortgage finance for the bank.
4. A bond initiation fee of around R6 000 plus VAT that is payable to the bank granting the home loan. “Banks often add this figure to the bond amount. My advice is to pay extra into your bond every month to bring it down faster,” says Sturgess.
5. A municipal deposit payable to the municipality when opening the account. You should open the municipal account as soon as possible - usually between one and two months after registration.
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