Selling your home will cost you more than just the agent’s commission, but sellers frequently expect to get more out of the sale of their property than they actually do.
“Knowing what costs are involved in a property transaction will give sellers a far more accurate picture of what they can expect to get once the sale has been finalised,” says Jansen“Often sellers take into consideration the balance on their bond and the estate agent’s commission, but very little else.” says Cameron Jansen, Broker/Manager of RE/MAX Central. “However, there are several other costs that need to be taken into account when determining the final amount that the seller will receive after the conclusion of the sale.”
He says while the buyer pays a lot of the costs involved in a property sales transaction, there are a number of elements the seller is responsible for as well. “One of the costs that sellers need to be aware of is the administration fees that are charged to cancel their existing bond account.”
Jansen gives insight on eight extra costs sellers may need to account for:
1. Bond cancellation
Even if there is only one more repayment left on the bond account, a cancellation attorney will be used to cancel the bond. Generally the bond cancellation fee will be between R3 000 and R4 000, which can be quite a shock if the seller is not expecting it.
Although it is not commonplace, some sellers may decide to have a home inspection done so that they are aware of any issues before they place the home on the market. If a seller decides to go this route, it will cost them around R3 500 depending on the service provider they use.2. Rates and taxes clearance certificate
The attorneys will require a rates and taxes clearance certificate from the local council, the seller will need to put money upfront to get the certificate. In order to provide the clearance certificate the council can ask between three and six months of future-dated payments, which can add up to a fair amount of money.
If the home happens to be registered within a shorter time frame, the council will pay back the additional money which the seller has paid. However, this does take some time. In some cases sellers have only received the money owed to them by the council a year after the date of sale – so they will need to be prepared to wait.
3. Levies
In the instance where the seller is in an estate or sectional title property, similarly to the rates and taxes clearance certificate, the homeowners’ association or body corporate may request that the seller pays for their levies a few months in advance to ensure these costs are covered until transfer takes place.
“In the case where a homeowner has sold their property for R1 million, even if they had the entire equity of R1 million in the property, after all costs have been taken off they could probably expect to walk away with a figure fractionally over R900 000, dependent on the commission charged.4. Electrical Certificate of Compliance
Another cost that most sellers should be aware of is the Electrical Certificate of Compliance or ECOC, which according to the current legislation is only valid for a period of two years. If the seller has an ECOC that is older than this, or any electrical alterations have occurred during the two-year period, the seller will be required to obtain a new ECOC by enlisting the services of a certified electrician.
Provided there are no faults found, this can cost anywhere from R500 to R1 000 depending on the size of the property and the call out fee. If the electrician does find faults, the cost will escalate depending on the work that needs to be done to get the home compliant.
5. Electrical Fence System Compliance Certificate
If a homeowner has opted to install electrical fencing as a security measure, an Electrical Fence System Compliance Certificate is now also required where applicable. It is vital to note that an ECOC and Electrical Fence System Compliance Certificate are two separate and different documents.
6. Certificate of Conformity
With the energy crisis experienced throughout the country, many households have installed gas lines to supplement their electricity usage. These homeowners will be required to obtain a certificate of conformity, which indicates that the installation has been done by a qualified technician.
Selling your home will cost you more than just the agent’s commission, but sellers frequently expect to get more out of the sale of their property than they actually do.7. A beetle-free certificate
While not compulsory, homeowners who are selling their property in the Western Cape and KwaZulu-Natal regions will generally need to provide the purchaser with a beetle-free certificate.
Usually the beetle certificate is required only in respect of two types of borer beetles that have found their way to South Africa shores through imported timber. In certain cases a beetle-free certificate will be required before the bank will grant finance to the buyer.
8. Home inspection
Although it is not commonplace, some sellers may decide to have a home inspection done so that they are aware of any issues before they place the home on the market. If a seller decides to go this route, it will cost them around R3 500 depending on the service provider they use.
“In the case where a homeowner has sold their property for R1 million, even if they had the entire equity of R1 million in the property, after all costs have been taken off they could probably expect to walk away with a figure fractionally over R900 000, dependent on the commission charged.
“Knowing what costs are involved in a property transaction will give sellers a far more accurate picture of what they can expect to get once the sale has been finalised,” says Jansen
