on 23 Jan 19
Categories: House hunting Finance & Budget Real Estate Market Renting Selling
As counter-intuitive as it might be, selling a property can be quite an expensive exercise. While some of these expenses can be offset against the final sale price, others will need to be settled before the sale can go ahead.
“Apart from the agent’s commission, sellers are sometimes caught off guard by the various costs involved in selling a property. To protect against being left with less than what had been budgeted for, sellers should speak to their real estate professional and work out how much these expenses will add up to before they go ahead with the marketing of their home,” says Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett.
To give sellers a better idea of what they might be in for, RE/MAX of Southern Africa shares the five main expenses that are involved in the sale of most properties:
1)Bond Cancellation Fees
Each financial institution will have their own rules and applicable charges for cancelling an existing bond, so sellers will have to enquire with their financial institution to discover what they can expect to pay. Most financial institutions require either a 60 or 90 day notice period, otherwise penalty fees will be charged. To avoid these costs, as soon as a seller puts a property on the market, a written letter should be sent to the bank to alert them of an intention to sell.
In order for the transfer to go ahead, the seller will need to acquire a rates and taxes clearance certificate from the local municipality. This fee is charged to make sure that rates and taxes on the property will still be paid while the registration process is underway. Consequently, the municipality usually asks for between two to six months upfront. The municipality will later refund you if the registration process is completed within a shorter timeframe than what was billed for.
Similarly, if you live in a sectional title estate, you could be charged roughly three months’ worth of levies upfront before the registration of the sale. Sellers should speak to their HOA or Body Corporate to find out about these costs.
Another expense which needs to be covered before the transfer can go ahead is that of the various compliance certificates (electric, plumbing, gas, beetle, electric fence) required during the home inspection process. Sellers will also have to cover the costs of addressing any issues that are pointed out in order for the certificate to be issued.
If you are renting the property to a tenant, keep in mind that you will need to repay their deposit with interest. You should also make room in your budget to pay for any possible repairs in case there are any damages to the property after they vacate.
“Selling a property is not a simple process but, with the right real estate professional by your side, it can be. Real estate agents deal with these kinds of transactions on a daily basis and will be able to guide you through the above mentioned processes so that you are never left confused or uncertain on how to proceed at any point in the deal,” Goslett concludes.
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