What are the costs involved in buying or selling a property?
Are you fully aware of all the costs involved when buying or selling a property?12th Jun 2017
We asked real estate partners at the Woodland Hills Wildlife Estate in Bloemfontein to share some expertise on the purchase costs – Apart from the purchase price of the property, buyers will also be responsible for the following costs:
- Transfer duty, calculated as a percentage of the purchase price.
- Transfer fee is payable to the Conveyancer who will transfer the property into the name of the buyer. The amount varies based on the purchase price of the property. The fee is recommended by the Law Society, but may differ slightly from one law firm to the other.
- Bond registration fee payable to the Attorney appointed to register the bond over the property. The amount varies based on the value of the bond. This fee is recommended by the Law Society, but may differ slightly from one law firm to the other.
- Moving costs.
- Occupational interest is payable if the buyer occupies the property before it is transferred into his/her name.
When deciding on the budget for the purchase of a new home, buyers are advised to calculate and budget for the cash deposit required by the banks, as well as the above-mentioned additional costs.
Further, the costs to sell your property include:
- Estate Agents fees – these can varying from 3% – 7% and now with online property portals, could also be as low as 1.5% of the total selling price. These commissions need to be negotiated in advance.
- The legal costs for the cancellation of an existing bond that is registered for that property. There can be an early cancellation fee if you cancel before a 2 year period.
- Rates and taxes that are due – often equivalent to about 4 months’ payments, to get rates and taxes and levy clearance certificates. This can be a large amount. If your property transfers earlier than anticipated you might get a refund.
- Costs associated to obtaining an electrical, gas and or plumbing compliance certificates.
- Any repairs relevant to the restoration to good standing order of the property.
- Capital gains tax if you sell your property at a profit.
Equip yourself with the knowledge of all costs before making any commitments, so that you are making informed decisions.