THE HIDDEN EXPENSES IN BUYING AND SELLING PROPERTY
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THE HIDDEN EXPENSES IN BUYING AND SELLING PROPERTY
When buying or selling a property, it can be all too easy to overlook some of the hidden expenses, which if not considered, can make for a rather unpleasant surprise, potentially spoiling the excitement of buying your new home.
Buyers
In general, when buying a property, it is advisable to allow for between 8%-10% of the purchase price to cover the additional expenses. This is excluding the deposit which is paid to secure the purchase of the property.
Transfer Duty
Property buyers will be liable to cover the cost of the property transfer duty, which is calculated according to the value of the property. The good news is that properties that are currently valued at R1,000,000 or under, are exempt from transfer duties.
Rates
In addition to this, the buyer is also responsible to pay for a rates clearance certificate of roughly R380, as well as a levy clearance certificate of approximately R1800 if the property is sectional title, as well as levies and rates from the date of transfer.
Conveyancing
Then there are also the legal costs involved, these include the tariffed conveyancing fee for the registration of the transfer, as well as the lodging agent's fee of 15% of the tariff fee, which pays for the attendance to the registration by the correspondent attorneys at the deeds registries.
If the property is being bought from a deceased estate, the buyer is also responsible for the estate registration certificate fee of R335 and the application in terms of Section 42(2) of the Administration of Estates Act 66 of 1965, at a cost of R2500.
Additionally, the conveyancing attorneys will charge a postage and petties fee to cover the miscellaneous costs incurred such as any travelling that is required, telephone calls, postages, bank charges etc. in the handling of the matter.
Sellers
Agent's Commission & Certificates of Compliance
While most of the property transfer costs incurred are generally incumbent on the buyer, the seller is responsible for certain expenses as well. These include paying the agent's commission and the relevant certificates of compliance such as an electrical certificate of compliance, borer beetle certificate, gas certificate and electric fence certificate.
Rates and Bond Cancellation Fees
Also payable by the seller are their share of the rates and taxes and levies up until date of transfer as well as bond cancellation fee of approximately R5200. If the bond is cancelled in less than 90 days from the date of sale, interest on this amount will be accrued. To avoid this, it is suggested that sellers provide written notice to their bank that they are intending to sell the property and cancelling their bond. This way the 90-day notice period begins when your property is marketed rather than once the offer to purchase has been signed.
To make the whole process easier for you, Home & Hectare have an online calculator to help you estimate and prepare for all the additional expenses involved in buying or selling your property.
For more specific advice on all matters relating to buying or selling property, contact us here and let one of our knowledgeable property specialists advise you. You can also email us at info@homeandhectare.com or give us a call on 041 581 1744.
Author: Home & Hectare
